What Has (and Hasn't) Changed in B2B Marketing

"What has been will be again, what has been done will be done again, there is nothing new under the sun."

Ecclesiastes 1:9 (New International Version)

"Don't throw the past away
You might need it some rainy day
Dreams can come true again
When everything old is new again."

"Everything Old Is New Again," Peter Allen and Carole Sager, 1974

In my last post, I argued that many of the criticisms of the 4Ps model of the marketing mix are unfounded because they are based on a flawed understanding of the model. To support my argument, I used several quotations from E. Jerome McCarthy's 1960 textbook, Basic Marketing:  A Managerial Approach (Richard D. Irwin, Inc., 1960). 

McCarthy was the developer of the 4Ps model, and he introduced it in his 1960 textbook.

As I read McCarthy's book, I was struck by how relevant the core principles discussed in the book are today. Certainly, some portions of the textbook - particularly some of the case studies and examples -are outdated. But the central elements of McCarthy's model and his broader view of marketing's role in a business are as relevant today as they were in 1960.

Perceptions of Change

If we surveyed a representative sample of B2B marketers, an overwhelming majority of our survey respondents would probably say that the last two decades have been a period of unprecedented change in B2B marketing. In some ways, this view is completely accurate.

Over the past twenty years, we have witnessed the proliferation of marketing channels, the explosive growth of marketing technologies, and the appearance of several new marketing techniques, including content marketing, social media marketing, and account-based marketing.

During the same period, several major consulting firms introduced an array of concepts and models describing the B2B buying process and exploring the role that marketing can, should, or does play in revenue growth at B2B companies.

Most of these developments have felt new, and many have been presented as new. But in fact, many of these "new" models of B2B marketing and buying aren't new at all. They have antecedents that go back several decades.

Wisdom From the Past

This phenomenon is evident in Frederick E. Webster, Jr. and Yoram Wind's 1972 book, Organizational Buying Behavior (Prentice-Hall, Inc., 1972). Here's how Webster and Wind described the six distinctive attributes of "organizational" (a/k/a B2B) buying:

    1.    "First, and perhaps most important, organizational buying decisions are made more complex by the fact that more people usually are involved in them and different people are likely to play different buying roles."

    2.    "Second, organizational buying decisions often involve major technical complexities relating to the product or service being purchased."

    3.    "Third, organizational buying decisions typically take longer to make than consumer (individual) decisions."

    4.    "Fourth, the greater time required for organizational buying decisions means that there are significant lags between the application of marketing effort and obtaining a buying response."

    5.    "Fifth, each buying organization is likely to be significantly different from every other buying organization in the potential market in ways that may require viewing each organization as a separate market segment."

    6.    "Finally, the organizational members participating in the buying function are neither purely 'economic men' nor are their motives purely emotional and irrational. Rather they are human beings whose decisions and behavior are being influenced by both task- and nontask-related variables."

If I change a few words here and there, it would be easy to believe these six attributes were written this year instead of more than 50 years ago. For example, the first attribute captures the essence of what we now call a B2B buying group, and the fifth attribute is remarkably similar to the original concept of account-based marketing.

Organizational Buying Behavior also presents a thoroughly modern view of marketing's ultimate purpose and mission:

    "In a nutshell, the marketing concept as it exists today is a business philosophy that sees the fundamental purpose of the business as the creation of satisfied customers . . . The responsibility of marketing management, according to this philosophy, is to interpret conditions in the marketplace and to coordinate and influence the direction of company operations so as to ensure that the company's offerings of products and services have the highest probability of satisfying customer needs."

Again, with just a few word changes, this statement could have been written this year.

All this may seem like the ramblings of someone who has too much time to read old books, but this is just one example of a larger and more important truth.

The pace of change in some aspects of B2B marketing has been so rapid over the past twenty years that it's far too easy to lose sight of the fact that many of the core principles of marketing and buyer behavior have changed very little. The tools and techniques we use are certainly different, but the thoughts and emotions we need to evoke in customers and prospects are essentially the same today as they were decades ago.  

Long Live the 4Ps!

Source:  Shutterstock

The latest salvo of criticism aimed at the venerable 4Ps of marketing was fired by Joanne Seddon, the CEO of the Marketing Accountability Standards Board, in an article published last month at WARC. 

Ms. Seddon pulled no punches in her criticism. She wrote that the 4Ps are "hopelessly out of date," don't "truly reflect the basic principles of marketing," and are "wrong. Or, at the very least, dangerously incomplete." Therefore, she argued, the attempt by some to revive the use of the 4Ps, while "well meant," is "misguided."

Beyond these broad condemnations, Ms. Seddon offered five specific criticisms of the 4Ps in her article. In my view, these criticisms are largely unfounded because they are based on an inaccurate understanding of the 4Ps model.

The 4Ps model of the marketing mix was developed by E. Jerome McCarthy, a marketing professor at Notre Dame. McCarthy introduced the model in his 1960 marketing textbook, Basic Marketing:  A Managerial Approach (Richard D. Irwin, Inc., 1960) ("Basic Marketing").

As the developer of the 4Ps model, McCarthy is the authoritative source of information about what the 4Ps encompass and how they should be applied, and his textbook provides a detailed description of the model as he originally designed it. So, in the balance of this post, I'll address Ms. Seddon's specific criticisms of the 4Ps using material drawn from Basic Marketing.

"The 4Ps Are Tactical, Not Strategic"

In reality, the 4Ps model is more strategic than tactical. McCarthy's extensive discussion of product, place, promotion, and price (Sections C - F in Basic Marketing) highlights the many strategic business issues that marketing managers must address when developing a marketing mix.

The following passage illustrates McCarthy's view of marketing's role in strategic decision-making:

"Are the activities of product development, product design, packaging, credits and collections, transportation, warehousing, and price setting included in 'marketing?' There is little doubt that personal selling and advertising are marketing activities, but many business executives would have marketing stop there. . . We must reject this view of marketing.

". . . Marketing should start with the customer, not with the plant. Thus, marketing should determine what products are to be produced . . . what prices to charge . . . and where they are to be available . . . - as well as selling and advertising." (Basic Marketing, p. 34)

The 4Ps Are "Purely Product-Focused" and "Miss Out" the Customer

McCarthy clearly states that marketing starts with the customer numerous times in Basic Marketing. It's noteworthy that he devoted 171 pages in his textbook to explaining the importance of choosing a target market and understanding the needs, preferences, and buying behaviors of potential customers before he began his detailed discussion of the 4Ps.

McCarthy's view of the centrality of the customer is evidenced by the following diagram, which appears on page 45 of Basic Marketing.

The "C" in the center of the above diagram stands for "consumer," and the diagram illustrates that all decisions regarding the 4Ps are centered on the customer.

The 4Ps Assume a "Static, Unchanging Marketplace"

This criticism is also unfounded. Near the end of Basic Marketing, McCarthy directly addressed the issue of changing conditions. He wrote:

"A 'best' solution can hardly remain 'best' for long . . . We are dealing, too, with a great range of ever-changing variables, and the movement of any one may change the final result. That makes our 'best' solution obsolete immediately. The marketing manager, then, must . . . make appropriate changes in his marketing mix. And this is a continuing process. He is continually analyzing, measuring, evaluating, and changing. (Basic Marketing, p. 671)

The 4Ps Don't "Touch on the Purpose of Marketing, Which Is to Drive Revenue, Profit, and Financial Value"

This criticism is accurate in the sense that McCarthy doesn't specifically address the measurement of marketing performance as a distinct topic. This shouldn't be surprising given how he sees the role of marketing in a business.

McCarthy defines marketing as follows:

"Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or user in order to satisfy consumers and accomplish the firm's objectives." (Basic Marketing, p. 33)

In McCarthy's view, marketing plays a leading role in most aspects of a company's business operations. Therefore, the effectiveness of the marketing strategy will be reflected in the overall company performance.

"The 4Ps Miss Out Brand!"

Ms. Seddon's final criticism is that the 4Ps model omits brand. In fact, McCarthy discusses branding in both the "Product" and the "Promotion" sections of his textbook.

It is fair to say that McCarthy's treatment of brand focuses on fundamentals, what we might expect to see in an introductory brand management textbook.

It's also fair to say that McCarthy, unlike today's brand marketing advocates, doesn't discuss the shortcomings of performance marketing, the pitfalls of "short-termism" in marketing, or how a strong brand affects the psychological aspects of buyer decision-making.

But, it's simply wrong to say the 4Ps omit brand.

Are the 4Ps Outdated?

Like any textbook, Basic Marketing reflects the state of knowledge about its topic that existed when it was written. So, there are aspects of Basic Marketing that are now outdated. To address this issue, popular textbooks are typically updated regularly, and Basic Marketing is no exception. The book is now in its 19th edition.

The 4Ps model itself is not outdated if it is properly understood and used, and most criticisms of the model are simply way overdone.

[Book Review] A Playbook for Leading Marketing in a VUCA (Volatile-Uncertain-Complex-Ambiguous) World

Source:  Greenleaf Book Group

Human beings are hard-wired to crave predictability and detest uncertainty. We all want to know that our decisions and actions will produce predictable outcomes or results.

The desire for predictability is equally strong among business executives, and for many years, business leaders have used management methods and processes designed to reduce uncertainty.

It shouldn't be surprising, therefore, that many CEOs and CFOs think that marketing should be reasonably predictable and become frustrated when marketing leaders can't answer what they see as straightforward questions.

Nor should it be surprising that many CMOs manage the marketing function in ways that are intended to reduce uncertainty, or that they lean into marketing methods and tactics that produce more predictable results.

These are the major issues that Kathleen Schaub addresses in her new book, Marketing in the (Great, Big, Messy) Real World:  Rewire Your Marketing Organization to Navigate Anything (River Grove Books, 2025) ("Marketing in the Real World").

In this important book, Schaub explains why the outcomes of most marketing activities are largely unpredictable, and explores what that inherent uncertainty means for managing the marketing function.

Kathleen Schaub is an author, speaker, and strategist on the future of marketing management. She led IDC's CMO Advisory practice for nine years, and she previously held senior marketing positions at several technology companies, including Sybase, Cadence Design Systems, and Vanstar. Schaub's extensive marketing leadership experience enables her to speak authoritatively about the intrinsic nature of marketing and the principles of effective marketing management.

What's In the Book

Marketing in the Real World contains a brief Introduction and three major sections.

In the Introduction, Kathleen Schaub argues that markets are what scientists call complex systems, and these systems have several characteristics that make them inherently unpredictable or, at best, only semi-predictable.

However, many CEOs, CFOs, and other senior leaders cling to the belief that the outcomes of marketing activities should be predictable. This view causes many senior leaders - including many marketing leaders - to attempt to bring marketing's uncertainty under greater control, something Schaub argues is essentially impossible.

Schaub contends that marketing leaders need to adopt new mindsets and management methods that embrace marketing's complexity and uncertainty and thus better enable marketing to succeed in the real-world environment. The rest of the book lays out Schaub's "playbook" for the necessary changes.

Part I of Marketing in the Real World (Chapters 1 and 2) sets the stage for the material in the balance of the book. Chapter 1 discusses the rapid rise of Taylor's "scientific management" methods in the early years of the twentieth century and explains why those methods don't work well when applied to today's marketing.

Chapter 2 introduces the new mindsets and operational shifts that Schaub argues are needed to enable marketing to thrive in a complex and uncertain environment.

In Part II of the book (Chapters 3-6), Schaub discusses the four mindset shifts that marketers and business leaders need to make to manage marketing effectively in the real world.

• Think Like an Investor (Chapter 3) - View marketing expenditures as investments that put funds at risk today with the objective of reaping significant gains in the future.

• Think Like a Navigator (Chapter 4) - View the market environment as constantly evolving, which means that marketing plans and the interpretation of marketing performance must be frequently adapted.

• Think Like a Statistician (Chapter 5) - Recognize that all future outcomes of marketing activities can only be described as probabilities.

• Think Like an Ecologist (Chapter 6) - Recognize that the performance of individuals on the marketing team is greatly influenced by the social, cultural, and economic context in which they work, and focus on developing an ecosystem that will facilitate high performance.

In Part III of the book, Schaub covers four operational processes or capabilities that have a significant impact on marketing success in a volatile and uncertain environment. She discusses the importance of leveraging both human intelligence and technological capabilities, the role of agile work processes, the use of integrated teams, and the importance of leveraging the attribute of complex systems known as emergence.

My Take

Marketing in the Real World will be a worthwhile read for anyone involved in leading or managing marketing in today's economic and competitive environment. The material in the book is insightful and well-organized, and Kathleen Schaub's writing is clear and engaging.

Schaub's book is particularly valuable in light of recent developments in B2B marketing. It's no secret that B2B brand marketing is experiencing a renaissance. A growing number of B2B marketers are recognizing the importance of having a strong brand, and several recent research studies have confirmed that importance.

Despite the increased attention, however, many B2B marketers continue to report that it is challenging to win support from their CEO and CFO for increased investment in brand marketing. This resistance usually stems from the difficulties involved in predicting and measuring the financial impact of brand marketing activities. In Marketing in the Real World, Kathleen Schaub provides perspectives marketing leaders will find useful in planning discussions with their CEO and CFO.

Six Key Steps to Winning CFO (and CEO) Support for Increased Investment in Brand Marketing

After languishing in the shadow of performance marketing for more than two decades, B2B brand marketing is experiencing a renaissance. The number of blog articles, LinkedIn posts, and other forms of content highlighting the importance of having a strong B2B brand has increased dramatically over the past couple of years.

This growing interest in B2B brand building can be attributed to several factors. For one thing, many B2B marketers are finding that demand generation/performance marketing tactics that worked well only a few years ago have become less and less effective.

In addition, recent research studies by The B2B Institute, Bain & Company, Google, 6sense, and others have provided insights about the B2B buying process that make the value of a strong B2B brand abundantly clear.

Despite the increased attention on B2B brand building, many marketers are reporting that it's still difficult to win support from their CFO and CEO for increased investments in brand marketing programs.

In response to this challenge, several marketing pundits have published articles or guides advising marketing leaders on how to "sell" brand marketing to senior company leaders, particularly the CFO.

One of the better resources I've seen recently is "Selling brand marketing budgets to the CFO:  proof, not promises" by Wynter, a provider of B2B brand tracking and research software. This article describes five steps B2B marketing leaders should take to make their proposed brand marketing spending more likely to win support from their CFO.

Here are Wynter's five steps:

• Link brand investments to improved financial outcomes such as increased revenue, market share, and profit margin.

• Incorporate specific, quantifiable KPIs and targets in the budget proposal.

• Include competitive benchmarks whenever possible. What are your primary competitors spending on brand marketing? How does the health of your brand compare to that of your competitors?

• Make the risks of under-investing in brand explicit.

• Spell out when the proposed brand investments will produce results. In other words, provide a realistic ROI timeline that's supported by credible evidence.

I agree with these specific recommendations, but I have a couple of concerns about the section of the Wynter article that discusses "modeling brand ROI."

First, the article makes developing a credible, evidence-based quantitative model that shows the financial benefits of brand marketing appear to be simpler than it actually is.

And second, this portion of the article uses the term "brand ROI" in an overly broad way, which can make it more difficult for marketing leaders to win the support of their CFO for greater investment in brand marketing.

When You Say ROI . . . Mean ROI (The Sixth Step)

For years, many marketers have used "ROI" as a catch-all term to describe the value of a wide range of benefits produced by marketing activities, including brand marketing activities. Unfortunately, this practice has been perpetuated by marketing pundits and other industry participants who should know better.

Advocates of brand marketing forcefully argue that a strong brand produces several valuable benefits, including:

• Increased share of branded search (an indicator of brand awareness and possible purchase interest)

• Increased response and conversion rates from "performance marketing" programs

• Increased presence in "day-one consideration sets"

• Lower customer acquisition costs

• Increased market share

• Increased revenue (total revenue, not gross margin)

When some or all of these benefits are supported by credible evidence, marketing leaders should include them when discussing increased investment in brand marketing with their CFO. However, none of these benefits constitutes ROI.

Return on investment is a specific financial metric that has a well-established meaning among management and financial professionals. It's a ratio that compares the incremental financial gain from an investment (the "return") to the amount of the investment.

When marketing leaders use "ROI" to describe anything else, they can quickly lose credibility with their CFO, and probably with their CEO as well. If a marketing leader displays a fundamental misunderstanding of this basic financial metric, why should a CFO rely on any other financial estimates or projections the marketing leader provides?

The lesson here is clear:  If you're a marketing leader, you need to be careful to calculate and use financial metrics in ways that trained financial professionals (like CFOs) will see as proper. This will enhance your personal credibility with your CFO and make it more likely that he or she will support your proposed marketing plans.

Image courtesy of Limelight Leads via Flickr (CC).

Thought Leadership or Brand - Which Matters More to "Hidden Buyers"?

Edelman and LinkedIn recently published their 2025 B2B Thought Leadership Impact Report, which was based on a survey of 1,934 management-level business professionals from a wide range of industries and company sizes. The survey was conducted March 17 - April 3, 2025.

The primary focus of this year's study was "hidden buyers" - people in the buying organization who influence a purchase decision even though they are not a primary user of the product or service being considered.

The 2025 report includes several survey findings for "hidden buyers" and "target buyers," defined as follows:

• Hidden Buyers - "People who . . . are a final decision-maker in group purchasing decisions and are primarily involved as a representative of a function that does not require in-depth knowledge of the specific product or service. These functions might include finance, operations, legal, compliance, procurement, and others."

• Target Buyers - "People who . . . are both a final decision-maker and are primarily involved as an expert in the service or product being offered."

Here are some of the major findings from the Edelman/LinkedIn report.

Consumption and Use of Thought Leadership

 Hidden buyers consume as much thought leadership content as target buyers. Sixty-three percent (63%) of the hidden buyer survey respondents said they spend an hour per week (on average) consuming thought leadership, compared to 64% of target buyer respondents.

Fifty-five percent (55%) of the hidden buyer survey respondents reported using thought leadership content to evaluate potential vendors, compared to 56% of target buyer respondents.

Impact on Marketing/Sales Interactions

Seventy-one percent (71%) of the hidden buyer survey respondents reported having little or no interaction with vendor sales reps. However, 95% said that strong thought leadership content made them more receptive to marketing and sales outreach from companies producing such content.

Attributes of Strong Thought Leadership

Ninety-one percent (91%) of the hidden buyer survey respondents said that a key attribute of high-quality thought leadership content is that it helps them uncover challenges, needs, or opportunities that they hadn't previously recognized.

Two Controversial Findings

The Edelman/LinkedIn report contains two somewhat controversial findings. In this study, the researchers asked participants to rate the importance of several considerations when selecting a vendor.

The following table shows the percentages of hidden buyer respondents who rated each consideration as very important or moderately important.

As this table shows, hidden buyer survey respondents rated "Vendor is the 'safest choice'" as less important than five other considerations.

The second controversial finding relates to the importance of brand. The researchers asked study participants how much they agreed or disagreed with this statement:  "In vetting vendors, if an organization produces high-quality thought leadership, it matters much less to me how well known they are." Fifty-three percent (53%) of both hidden buyer and target buyer survey respondents somewhat or strongly agreed with this statement.

The Alternative View

These two findings differ significantly from the results of other recent research. One example of this research is a recent study by The B2B Institute, Bain & Company, and NewtonX (the "B2B Institute Study").

(Note:  This study is described in a 2024 LinkedIn article written by Mimi Turner and Jann Schwarz, both with The B2B Institute. I understand The B2B Institute is planning to publish  a report or paper discussing this research later this year.)

The B2B Institute Study examined the attitudes and behaviors of hidden buyers and target buyers using definitions of those terms similar to those used in the Edelman/LinkedIn study. The study found that making a "safe" purchase decision is a primary driver for hidden buyers.

• Hidden buyers care more than target buyers about factors such as brand reliability and "peace of mind." (See the graphic accompanying "Finding #2" in the LinkedIn article.)

• About two-thirds of hidden buyers and target buyers said they would prefer products or services that "provide peace of mind without career advancement" over products or services that offer "business growth that involves potential career uncertainty."

The B2B Institute Study also found that a strong, well-known brand is important to both hidden buyers and target buyers, but is more influential with hidden buyers.

• Eighty-one percent (81%) of the study participants said the brand they ultimately bought was known to everyone or almost everyone in the buying group at the start of the purchase process.

• Hidden buyers are 31% more likely to reject brands they don't know and 70% more likely to reject brands that aren't well-known to other members of the buying group.

My Take

These two studies present starkly different perspectives regarding the tendency of B2B hidden buyers to make "safe" purchase decisions and the influence that brand has with hidden buyers.

I suggest that most of these differences can be attributed to differences in the focus and design of the underlying surveys. The B2B Institute Study focused on high-consideration, high-value technology purchases by large enterprises. Sixty-four percent (64%) of the survey respondents in this study were with companies having more than 10,000 employees.

The survey used in the Edelman/LinkedIn thought leadership study had very different survey demographics. In fact, 48% of those survey respondents were with companies having 200 or fewer employees.

Several other recent studies have highlighted the preference of most B2B buyers for safe purchase decisions and the important role that brand plays in B2B buying decisions.

Under these circumstances, I think the findings of the B2B Institute Study provide a more accurate picture of real-world B2B buying.

Top image courtesy of Hans Splinter via Flickr (CC).

[Research Round-Up] The Latest Edition of "The CMO Survey" and a New Survey by EMARKETER

 (This month's Research Round-Up features the Spring 2025 edition of "The CMO Survey" and a new survey of senior B2B marketers by EMARKETER, in association with StackAdapt.)

Spring 2025 Edition of "The CMO Survey"

Source:  "The CMO Survey"

• A survey of 281 marketing leaders at U.S. for-profit companies
  
• 99% of the respondents were VP-level or above
• 58.4% of the respondents were with B2B companies
• The survey was in the field January 21 - February 12, 2025

"The CMO Survey" has been conducted semi-annually since 2008. It's directed by Dr. Christine Moorman and sponsored by Deloitte, Duke University's Fuqua School of Business, and the American Marketing Association.

For several years, each edition of the survey has asked participants about overall economic conditions, current marketing spending patterns, and future spending expectations. Here are some of the findings on those topics from the Spring 2025 survey.

Economic Outlook

The Spring 2025 survey found that marketing leaders were less optimistic about the economy than a year earlier. The survey asked participants to rate their optimism regarding the overall U.S. economy on a 100-point scale, with "0" being the least optimistic, and "100" being the most optimistic. The mean rating given by respondents was 62.2, down from 67.0 in the Spring 2024 survey.

The survey also asked if participants were more or less optimistic about the U.S. economy compared to the previous quarter, and only 31.2% of the respondents reported being more optimistic. That was down significantly from 43.7% in the Spring 2024 survey.

Meanwhile, 48.2% of the respondents in the Spring 2025 survey said they were less optimistic about the U.S. economy compared to the previous quarter. That was up from only 25.3% in the Spring 2024 survey.

Marketing Spending

In the Spring 2025 survey, respondents reported that marketing spending represented 9.4% of total company revenue, which was up from 7.7% in the Spring 2024 survey. Respondents also said that overall marketing spending increased 3.3% over the 12 months preceding the survey, and they expected spending to increase 8.9% over the 12 months following the survey.

The relative change in spending on digital marketing vs. traditional advertising remains significant. In the Spring 2025 survey, respondents reported that spending on digital marketing grew 7.3% over the prior 12 months. In contrast, respondents said they expect spending on traditional advertising to decrease by 0.3% over the 12 months following the survey.

Marketing's Role in the Organization Has Grown . . .

The Spring 2025 survey asked participants how marketing's role in their organization had changed over the previous five years. The survey asked participants to rate the amount and direction of change using a numerical scale ranging from -7 (significantly narrowed) to +7 (significantly broadened). The mean value given by respondents was 3.2, which indicates that marketing's role has expanded substantially.

But So Has the Pressure to Prove the Value of Marketing

Sixty-one percent (61%) of the respondents in the Spring 2025 survey said they felt pressure from their CEO to prove the value of marketing. That was up from 51% in the Fall 2023 edition of the survey. Sixty-three percent (63%) of the Spring 2025 respondents reported feeling the same kind of pressure from their CFO, and that was up from 52% in the Fall 2023 edition of the survey.

*****

As always, "The CMO Survey" contains a wealth of valuable insights, and I encourage you to review the full report.

"B2B Marketing Makes Room for Brand in Budgets and Strategies" by EMARKETER in
partnership with StackAdapt 

Source:  EMARKETER

• Based on a survey of 110 B2B enterprise executive marketing professionals in North America
• 6.4% of respondents were CEOs, presidents, or founders, 14.5% were C-level executives, and 79.1% were executive vice presidents, senior vice presidents, or vice presidents
• The survey was conducted during March 2025

The primary objective of this research was to better understand how B2B marketers are allocating budgets between performance and brand marketing, where they plan to invest next, and what barriers exist to additional brand investment.

Here are some of the major findings from the survey.

Brand and Performance Marketing

Over half of the survey respondents (58.2%) said they devote at least half of their marketing budget to lead generation, with paid search and paid social being the top two lead generation channels.

However, 40% of the respondents said they expect to increase their brand-building budgets in the 12 months following the survey. In addition, 45.5% said that if budget weren't a constraint, they would allocate more than half their marketing spend to brand initiatives.

The Measurement Challenge

Sixty-three percent (63%) of the respondents agreed that brand is a critical long-term play, but they struggle to quantify its impact. When survey participants were asked what challenges were preventing them from increasing investment in brand marketing, "proving ROI" was the top barrier identified. 

In addition, over a third of the survey respondents (35.5%) said they expect to face greater pressure to demonstrate ROI in real time over the 12 months following the survey.

How to Make Sustainability Marketing Effective Marketing

(This is the third of three posts discussing the use of environmental claims in marketing. The first two posts in the series can be found here and here. This post describes how marketers can make environmental claims more compelling for potential buyers and thus more effective at driving revenue growth.)

Many marketers at companies offering sustainable products or services have been featuring environmental messages prominently in their marketing campaigns, and this shouldn't be surprising. After all, numerous surveys have found that most people are concerned about the environment and support actions aimed at improving environmental sustainability.

But many surveys have also revealed a substantial and persistent disconnect between the views people express about sustainability in surveys and their actual buying behaviors. This say-do gap can be attributed to several factors, including:

• The impact of the social desirability bias on survey findings

• The failure of some surveys to capture how important sustainability is to survey respondents compared to other factors that influence their purchase decisions 

• The higher cost of many sustainable products

• How convenient it is to purchase sustainable products (compared to "non-sustainable" alternatives)

While all these factors have contributed to the say-do gap in specific instances, marketers also bear some of the responsibility for the gap because we haven't consistently communicated the benefits of sustainability in ways that produce changes in buying behaviors.

Recent Research Provides Important Insights

Making sustainability an effective marketing tool has been a tough challenge because there hasn't been much research on what kinds of sustainability claims are most appealing to potential customers. However, two recent studies have provided several important data points on this issue.

The Public Inc. Survey

The first study is a 2024 survey conducted by Ipsos on behalf of Public Inc. (the "Public Inc. Survey"). This survey was conducted July 11-24, 2024 with a nationally representative sample of 1,510 US adults and 1,508 Canadian adults.

The NYU-Edelman Study

The second study is a 2023 research initiative conducted by the NYU Stern Center for Sustainable Business and Edelman (the "NYU-Edelman Study").

For this research, NYU and Edelman partnered with nine consumer brands from various industries. The researchers conducted a survey with a sample of the US general population and asked respondents for each brand to rate the appeal of 30-35 marketing claims, which included a mix of conventional product claims and environmental claims.

The researchers used two robust survey techniques to obtain an appeal score for each claim and to identify the combination of claims that produced the maximum overall appeal.

The Formula for Effective Sustainability Marketing

Collectively, the Public Inc. Survey and the NYU-Edelman Study provide robust evidence about the attributes that make sustainability claims appealing to potential customers. They also identify two steps that you must take if you want to be successful at using sustainability claims in your marketing efforts.

Focus on the Right Goal

First, you must always remember that your primary objective is to drive increased sales of a sustainable product or products, not to evangelize the cause of sustainability.

This distinction is critical because it largely determines which sustainability claims you will use and how you will frame those claims.

The focus on increasing sales is not solely a matter of economic self-interest. The surest way to advance sustainability is to increase sales of sustainable products. As the authors of the NYU-Edelman Study report wrote:  ". . . consumer demand will be a key driver for companies to scale investments at the pace necessary to combat climate change and other urgent issues."

Recognize the Diversity of Your Target Audience

The target market for your sustainable products - and therefore the target audience for your marketing campaigns - will consist of potential buyers with substantially different levels of interest in, and commitment to, sustainability. So, your sustainability claims must take this diversity into account.

The Public Inc. Survey identified five consumer segments based on the percentage of their purchases that are conscious, i.e., purchases of "products or services made with consideration for social, ethical, or environmental factors."

The researchers found that only 9% of the surveyed consumers made conscious purchases at least 75% of the time. Forty-five percent (45%) of the surveyed consumers made conscious purchases less than 50% of the time.

Three Ways to Make Sustainability More Appealing

Based on the findings of the Public Inc. Survey and the NYU-Edelman Study, there are three steps you can take to make sustainability claims more compelling for potential buyers.

Step 1 - Link sustainability claims to "conventional" product performance claims

• The NYU-Edelman Study evaluated the appeal of sustainability claims and conventional product performance claims (which the study report calls "category claims").

• In this study, product performance claims were found to be "paramount and non-negotiable" and were more compelling than stand-alone sustainability claims.

• However, the researchers also found that claims that combined sustainability and product performance elements extended brand reach and were the most compelling claims tested.

Step 2 - Make sustainability personal

• Both the Public Inc. Survey and the NYU-Edelman Study found that sustainability claims were more appealing when they expressed how sustainability provides tangible benefits to the buyer or to the people or things the buyer cares most about.

• Specifically, the NYU-Edelman Study found that the surveyed consumers cared most about themselves and their families (health, well-being, etc.), saving money, local farms and farmers, their children and future generations, and sustainable sourcing.

• Conversely, both studies found that science-oriented claims like "carbon neutral," "net zero," and "bio-degradable" did not perform well with consumers. The NYU-Edelman Study did find that the performance of science-oriented claims is improved when they are tied to a personal "reason to care."

Step 3 - Emphasize the aspects of sustainability that deliver present-day benefits

• The Public Inc. Survey found that consumers are more likely to respond to sustainability claims that focus on immediate or short-term benefits.

• As the report's authors put it:  "They [consumers] want to know how their purchase makes their life better or easier now, not in some distant future."

A Final Point

Marketers who include environmental claims in their marketing communications must ensure that they have adequate scientific evidence to support those claims. And the same is true for environmental claims used on product packaging.

Without such supporting evidence, you run the risk that your company can be accused of greenwashing, which refers to making false or misleading claims about the environmental impacts of a product or company to make it look more environmentally beneficial than it actually is.

In the United States, the Federal Trade Commission is the federal agency primarily responsible for regulating environmental marketing claims, and all 50 U.S. states and the District of Columbia have laws prohibiting false or deceptive advertising that can be used to combat greenwashing.

Equally important, the number of private class-action lawsuits involving allegations of greenwashing is increasing, and some have resulted in the award of substantial financial judgments against companies found to have engaged in greenwashing.

The important lesson for marketers is:  Only make an environmental claim if you have the evidence to back it up.

The top image is a version of the universal recycling symbol and is in the public domain. Accessed via Wikimedia Commons.