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Warc Briefing: B2B
Warc Exclusive
November 2010

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Warc Briefing: B2B
Definition: B2B comprises campaigns designed to encourage commercial bodies to buy goods or services.
Quick facts
l Print is considered a prime B2B medium as decision makers feel press advertising is less intrusive than other formats.
l Tech B2B marketing has been slated as "erratic, inconsistent and depressingly tactical".
l Only half of B2B marketers have formal metrics to measure return on investment.
History and future outlook
Selling products and services to businesses rather than consumers is hardly new.
The US-based National Industrial Advertising Association (now the Business Marketing Association or BMA) was founded in
1922, and an estimated $30bn will be spent on B2B in the US, the world's largest advertising market, during 2010.
But the concept of using sophisticated marketing techniques to target decision-makers within businesses is a more recent
phenomenon.
As sectors such as telecommunications, IT, finance and consulting matured, so marketing expenditure in these categories
grew. Accordingly since the 1970s, there has been a steady rise in dedicated B2B-related research and case studies, though
this area remains less documented than consumer marketing.
Broadly, a number of characteristics have been identified as distinguishing B2B. These include:
l More complex products and buyer decision making.
l Longer decision cycles.
l Multiple, senior audiences to sell to (eg a CEO, CIO and CFO in large organisations) with different information needs.
l Greater interest in relationship marketing – including renewals and upgrades – rather than one-off transactions.
l A greater focus on personal relationships.
l Reliance on particular, short-term, response channels such as direct mail, directories, trade events as well as word of
mouth.
Potentially, B2B markets also tend to have less complex segmentation: B2B International, the market research group,
estimates the average B2B survey identifies three or four needs based segments, compared to a dozen or so in a FMCG
study.
Title: Warc Briefing: B2B
Source: Warc Exclusive
Issue: November 2010
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3. Typically, these segments would include a price focused group, a quality and brand-focused contingent, a service-focused
segment and a partnership focused cohort. However, this situation can vary and in recent years brands such as KPN, Sprint
and Adobe have benefited from more psychographic type segmentation.
Cutting across these broad generalisations is the question of the size of business involved: SMEs and large enterprises
should be treated as a group with discrete characteristics and marketing challenges.
However, some trends apply to both business and consumer sectors. Notably, an increasing deployment of CRM-driven
campaigns, search, targeted messaging and interactivity has been a feature of both consumer and business oriented
suppliers.
While face to face, events, direct mail and trade press channels remain important, mobile, email and social media have made
inroads.
Indeed, the rise of social media – along with the need for marketing functions to be closely aligned with sales teams – have
been characteristic themes of debate in B2B circles.
There is also plenty of room for future development of B2B metrics. Although there is general agreement on which metrics to
focus on (lead generation, website conversion, closed sale and cost per enquiry are the top choices), only 50% of US
marketers said they formally measured ROI.
Key challenges for B2B marketers
How important is branding?:
Less obviously than in consumer markets, business branding matters. Millward Brown has distinguished between current
customers (for whom experience of the brand is key) and non-users, from whom brand communications is more important.
There are frequently also disparities between large businesses, for whom functionality and price are often paramount, and
smaller customers who may often be more won over by brand reputation, communicated via specific brand marketing
campaigns.
In larger enterprises, the decision maker and the user are also less likely to be the same person, leading to varieties of
satisfaction with the same product or service.
In this context, branding can increase awareness and consideration, even if it rarely compensate for deficiencies in product,
pricing or service levels experienced at the coalface.
Drivers of B2B sales:
An academic study of relationship marketing in the financial services sector found that multiple surveys had identified 23
different dimensions of business relationships. Of these, the most frequently cited were: trust, commitment, satisfaction and
communication.
Of this list, satisfaction has been a particular focus of debate. An examination of business users of BT, the UK
telecommunications operator, found that satisfaction, rather than for instance, loyalty, was the single biggest predictor of the
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4. BT unit's revenues. However, Millward Brown has found little direct correlation between levels of satisfaction and first choice
consideration. However, it is little surprise then groups such as IBM, Accenture, Marriott and airlines generally have chosen to
market themselves around customer service.
Social Media:
In the February 2010 edition of the UK-based B2B Barometer, 60% of client marketers believed that social media was relevant
to business to business markets. However, two thirds said they did not have a social media strategy in place, and most
identified time constraints, lack of resources, shortages of understanding and poor metrics as barriers to employing social
media. Although there has been a great deal written about the influence of social media on brand reputation, only 11% of
respondents said they had techniques in place to measure the impact of social media content on their business reputation
online.
Alignment of sales and marketing:
For much of the last decade, the need to align sales and marketing in B2B markets has been widely recognised. At it simplest,
this can mean: is sales following up marketing-generated leads, and is marketing generating the right sales leads and so forth.
This is one area in which CRM systems, with their promise to deliver integrated, holistic pictures of the customer, have
attracted significant investment from B2B marketers.
However, a more thematic approach urges B2B marketers to
l Focus on the customer needs analysis
l Build the case for the product/service
l Help the customer understand the value of their product/services
l Offer proof points
l Ensure that the buyer sees and understands that your products and services provide the most efficient and effective
solution to their problems.
The key is understanding when and how to use these techniques within the corporate environment. However, B2B marketing
has in the past been hindered by relatively rudimentary segmentation, based on information such as a person's job title,
product line, industry, company size and other 'firmographics' (organisation characteristics). A MarketingNPV paper from 2007
found that certain organisations were getting results from a more sophisticated approach. For example, Avaya had used
cluster analysis to group its clients and potential clients into groups depending on their level of technology adoption.
For now, however, engraining more sophisticated approaches to the targeting of business decision-makers remains a long-
term job.
Related topics
CRM; relationship marketing; marketing to business owners;
Further reading
Cases on Warc:
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5. IBM Corporation – Woodland Creatures
New York American Marketing Association, Silver, North America Effies 2010
IBM Corporation – Let's Build a Smarter Planet
New York American Marketing Association, Gold, Global Effies 2010
Swinton Taxi Division – Swinton Mystery Tipper Campaign
Adrian Rowe, Helen Lawson, Katharine Allen, Amy Estcourt, David Savage and Rhian Thomas, Institute of Practitioners in
Advertising, Silver, Best Small Budget, IPA Effectiveness Awards 2009
Kern
Direct Marketing Association – UK, Gold award, 2009
Royal Mail
Direct Marketing Association – UK, Gold award, 2008
Cisco Systems – Welcome to the Human Network
New York American Marketing Association, Silver, Corporate Reputation/Image/Identity, Effie Awards 2008
UPS – Whiteboard
New York American Marketing Association, Gold, Delivery Products and Services, Effie Awards 2008
BT Telecommunications
Direct Marketing Association – UK, Silver award, 2008
iShares "Ask the Right Questions"
Canadian Congress of Advertising, Silver, Canadian Advertising Success Stories, 2009
Articles on Warc:
The B2B segmentation dilemma: insights stuck at marcom
Marketing NPV, Volume 4, Issue 4, 2007
B2B marketing: an undervalued sector?
Stephanie Brookes and Oliver Chesher, Admap, May 2007, Issue 483, pp.47–49
Emerging from the shadow of consumer panels – B2B challenges and best practice
Marek Vaygelt, ESOMAR, Panel Research, Barcelona, November 2006
Marketing investment planning – B2B catches up
Alexander Baldock, Market Leader, Issue 28, Spring 2005, pp.18–20
External links:
http://www.marketing.org/i4a/pages/index.cfm?pageid=1
http://www.b2binternational.com/library/whitepapers/whitepapers04.php
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6. http://www.mrmworldwide.com.hk/award/2008/intel/SC/index.html
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