Ending the Cold War Between Brand and Demand

 

In 2018, Samuel Scott wrote a column for The Drum in which he contended that the marketing industry has split into two distinct camps that advocate two very different approaches to the practice of marketing. Samuel described this divide as a "Cold War" between "online B2B marketers" and "offline B2C marketers."

A similar Cold War now exists within B2B marketing. The divide is between marketers (and agencies and consultants) who advocate the importance of long-term brand marketing, and those who focus exclusively - or almost exclusively - on shorter-term demand generation marketing. 

To use Samuel's words, B2B brand and demand generation marketers ". . . have different practices, read different publications, attend different conferences, follow different thought leaders, and view the other as outdated or uneducated." 

At present, the proponents of short-term demand generation marketing appear to be winning the "war." Several research studies have confirmed the tilt toward short-term tactics among B2B marketers. For example, in a 2020 survey of over 450 B2B marketers by The Marketing Practice and Marketing Week:

• Only 18% of the respondents said they run campaigns for more than six months.
• Only 20% said they report on a campaign's impact beyond six months.
• Only 33% said they allocate more than 40% of their resources to long-term marketing goals (more than six months).

The bias for short-term marketing is due to several factors, but two stand out in importance. First, the tenure of CMOs is one of the shortest in the C-suite, and therefore marketing leaders are under intense pressure to produce quick results. A 2019 study by Korn Ferry (a global organizational consulting firm) found that the average tenure of CMOs at the 1,000 largest U.S. companies (by revenue) was 3.5 years, the lowest of all C-suite titles.

The second major factor driving the preference for short-term demand generation marketing is that the performance of those programs is relatively easy to measure. The objective of most demand generation programs is to elicit a behavioral response from potential buyers, and those behaviors are easy to track with today's marketing technologies.

In contrast, the objective of most brand marketing programs is to evoke a change in the minds of potential buyers. For example, brand marketing programs are often designed to raise awareness and increase brand salience and mental availability.* Marketing experts have long recognized that these objectives are vital to driving growth, but they are extremely difficult to measure because they don't usually involve observable behaviors.

These factors have combined to cause many B2B marketing leaders to put too little emphasis on brand marketing. Jann Schwarz, the Global Head of The B2B Institute (a think tank funded by LinkedIn), described the situation in stark terms:  "The biggest problem in B2B marketing is pervasive under-investment in brand marketing, which is hurting companies' growth prospects."

The Cold War between B2B brand and demand marketers is particularly unfortunate because there is compelling evidence that companies will maximize their growth potential by balancing their use of long-term brand marketing and short-term demand generation. I discussed some of this evidence in an earlier post, so I won't repeat all of that discussion here.

The most important point is that multiple research studies have shown that consistent brand marketing (when well done, of course)  will improve the effectiveness and efficiency of demand generation marketing programs. A strong brand will substantially increase demand generation conversion rates and ultimately result in lower customer acquisition costs. There is also evidence that a strong brand can reduce the price sensitivity of some prospective buyers and thus improve gross profit margins.

The bottom line is, both effective brand marketing and effective demand generation marketing are needed to maximize growth. So it's time we ended the Cold War.

*Brand salience and mental availability both refer to the propensity of a brand (company/product/service) to be thought of or noticed when a potential customer is in a buying situation.