Finding the right marketing investment mix—one that meets both short- and long-term goals—is a balancing act that’s not easy to get right.
One of the (many) dimensions to consider is the allocation of dollars towards brand building vs. demand marketing investments. On the one hand, brand investment focuses on building awareness and reputation, while demand investments generate leads and drive sales.
In our work with B2B enterprises, we typically see marketing budgets heavily weighted to demand. This is not surprising given the omnipresent pressure from the C-suite and sales for qualified leads and pipeline generation. Couple this expectation with the reality that it can be difficult to measure the effect and ROI of brand-focused investments, and demand marketing will win the budget bounty every time.
Despite these realities, what our marketing clients keenly understand—and a concept other organizational stakeholders need to grasp—is the unassailable continuum of brand TO demand. It is not brand OR demand, nor brand AND demand: It is that brand-focused investments and activities lead directly to the returns of demand-focused efforts.
How can marketers help convince the powers that be of the value of brand investments? By helping B2B leadership and sales better understand how their buyers buy. Consider this…
6sense recently surveyed 2,509 B2B buyers to analyze how and when purchase decisions are made and found:
- Buyers enter their purchase journey with a ‘day 1 shortlist.’ It turns out that this shortlist contains four out of the five vendors that will ultimately be evaluated.
- 95% of the time, buyers have prior experience with at least one of the vendors they’ll evaluate.
- Being on the day 1 shortlist matters with buyers ultimately choosing one of the first four vendors from the day 1 shortlist 85% of the time. (Or as Kerry Cunningham from 6sense puts it, “The truth is, all is not lost if you’re not on the day one short list… but 85% of all is lost!”)
- Buyers reach out late in their journeys. B2B buyers are nearly 70% through their purchasing process before connecting with sales.
- Buyers choose a winner early. In 81% of cases, buyers have chosen a preferred vendor before talking to sellers.
In addition, LinkedIn B2B Institute’s highly referenced statistic—that only 5% of your target market will be in an active purchase stage (or ‘in-market’) at any one point in time—all builds the case for marketing and, in particular, brand-building to ensure you’re on buyers’ ‘day 1 shortlists.’
Each of these stats underscores the critical importance of establishing your brand with buyers BEFORE targeting them with any demand marketing. Further, this data supports the fact that brand marketing is the direct on-ramp to successful demand generation.
What’s the ideal brand-to-demand budget balance?
While what constitutes ‘ideal’ does vary based on your organization’s unique situation, new ANA research previewed at a recent B2B event in NYC revealed most B2B leaders (75%) feel the ‘ideal’ Brand:Demand spend is an equal split, 50:50. Despite that, only 1 in 4 (23%) of marketers balance their budget in that way, with most (45%) running budgets that skew mostly towards demand.
While B2B marketers may still be challenged to put 50% of their budgets towards brand activities, how can they ensure their brand budgets work as hard as possible for them? Here are a few tips:
- Brand doesn’t have to equal broad: Think ICP, not TAM, and employ targeted media to minimize waste.
- Focus on creating brand affinity, not just awareness: This means your brand must connect with the buyers’ hearts and minds, a connection that starts with meaningful buyer insight.
- A head-snapping creative concept with a smaller media budget will deliver more brand ROI than a wah-wah concept with a larger media budget. (For tips on how to elevate your B2B creative, read this post by Executive Creative Director Michael Palmer.)
- Establish and nurture relationships with industry influencers to amplify your reach to relevant audiences. (For more on why influencing the influencers is particularly important for Millennial & Gen Z B2B buyers, read this post by SVP, Brand Strategy, Frances Ranger.)
- Punch above your weight by pursuing and promoting industry award wins and earned media coverage.
Bottom line: Brand investments really are demand investments. Don’t limit marketing’s success by underinvesting in the all-important front end of the brand-to-demand continuum.