Business to business advertising reinforces a strange cognitive division made between professional and consumer advertising, where creativity is encouraged for one and discouraged for the other - this is wrong, argues Faris Yakob. Building strong brands to justify prices makes a lot more profit than growing volume. 

We play many different roles during the day, and one of the biggest divisions is between work and non-work modes. Despite the modern (and now much-questioned) vogue of bringing ‘one’s whole self to work’, people operate differently in the office. The confusion that this creates when we ‘work from home,’ and the different modes are forced to coexist, is surely obvious to everyone and their families this year. 

This cognitive division replicates itself in approaches to advertising to businesses. The standard tropes suggest that business decisions are made ‘more rationally,’ and thus we make advertising that is usually more corporate, and less about culture. Obviously, the people making decisions inside businesses are still… people, but the dynamics of those decisions are different. In the past, this has led business advertising towards conservative creative expression, extremely focused on lead generation, which is part of where the decision dynamics obviously differ. 

The Business2Business [B2B] Institute [Linkedin] released an expansive report on their 2030 long term trends and it comes with some familiar refrains. Perhaps the most important difference in the buying decision for corporates depends largely on size. The bigger the company, the larger the ‘buying network’ making the decisions inside it. It is also constantly changing, because 40% of people change jobs, company or industry every 4 years, per the report.

“New professionals are coming in and out of the network at random. People change jobs. People change companies. People change industries. That’s a very obvious insight with profound implications for B2B marketers.” 

With this in mind, the authors make a compelling case for brand-building activity and maximizing category reach, better creative, and measuring beyond cost per leads, to understand the contribution of marketing on other more diffuse metrics, like talent acquisition and, most importantly, price. 

Strong brands command price premiums, that’s the most important thing they deliver: price, inelasticity of demand. According to the report “Increasing pricing by just 1% can lift profitability by 10%. Increasing sales volume by 1%, on the other hand, delivers only a 3% lift in profitability.” 

Due to the distributed buying network, business buyers tend to be risk-averse, making decisions that can be defended when the annual review comes. Pricing power is especially important if you operate in hyper-competitive industries, like advertising, with low barriers to entry, and this is mostly a function of brand. Previously, marketers had responsibility for pricing but that now tends to be the role of finance, which means the inherent relationship between brand activity and pricing power isn’t usually appropriately recognized or measured. 

“Brands de-risk decisions by giving buyers safe choices that won’t invite any criticism. Hence that old cliché, ‘Nobody ever got fired for buying IBM.’” [ibid]

Brands create an economic moat, to use Warren Buffet’s language, because distinctive elements are protected by trademarks. However, the emergence of digital metrics and platforms focused many businesses at direct response lead generation at the lowest cost. 

“Every client we talk to has the same exact approach to lead generation: Put some forgettable product feature in an ad with a strong call to action, capture an email address, retarget that email list, push the leads to sales, close the deal...yadda, yadda, yadda. Activation effectiveness is driven by process, not creativity, and process is a very shallow moat.” [Ibid.]

Beyond the growth hacker hustle, B2B advertising has rarely been characterized by its creativity. This was always a strategic miss, but is especially so when we understand another key element of how marketing works inside organizations. Typically, the brand versus sales activation split of advertising is understood as nurturing future revenues of all potential buyers as opposed to harvesting those people who are currently in-market, which is only ever 5-10% [Ehrenberg-Bass]. However, at a larger organization, there is a separate function focused on short term sales - the sales team! 

The authors suggest making clean divisions of responsibility, so that marketers can focus on brand and let sales do their jobs, minimizing the possibility of internecine conflict. Sales activation advertising converts much better if the target has previously been exposed to brand work [Binet & Field & Karen Nelson-Field] and the most significant B2B brand work that springs to mind is in the form of giant posters with some kind of animal metaphor about the boardroom or IT security in airports, which we mostly haven’t and won’t be seeing for a while. 

However, there are exceptions. The report looks at Salesforce – one assumes it’s a big customer – known for splashy marketing events like Dreamforce. But it doesn’t take a global giant to do interesting brand work, as I discovered thanks to a reader, who suggested I look at Brown & Croupon, a law firm in St Louis, Missouri, that appears to have a sideline as a content factory. Many of their videos have between 500k and 2M views, and many of them are about sandwiches. Or utensils. The managing partner Ed Herman is both lawyer and Emmy Award winning host of a Youtube show, Ed vs… including recent episodes vs Cameo, Quarantine and vs more sandwiches. They even ran a Super Bowl commercial in 2019 calling out the owner of the LA Rams for local reasons, with the call to action, “subscribe to BCTV, you never know what we’re gonna do next”. 

Brown and Crouppen aren’t targeting businesses and the buying dynamics of personal injury lawyers work something like insurance - you don’t need it very often, so top of mind awareness is a significant driver of share. However, they highlight how a professional service business can effectively brand themselves with creativity without being staid, corporate and conservative. Hopefully this can inspire other professional service firms - perhaps even some advertising agencies.