Digital Advertising

Business-to-business (B2B) companies aren’t big spenders on digital ads. Only 4.6% of the total ad spend gets allocated to digital advertising.

To get a better understanding of the various challenges B2B companies face, several industry experts weighed in on eMarketer’s recent “US B2B Digital Advertising Trends” report. Below are their findings.

B2Bs Still Rely on Traditional Channels

For many B2Bs, traditional marketing methods like content marketing, email and personalized calls work.

In an August 2018 survey from Informa Engage, 78% of US B2B professionals said email marketing was one of the leading marketing tactics they used in 2018, followed by industry events (70%).

A similar survey conducted by Bop Design also found that personalized calls or emails were used by 79.7% of B2B marketers for lead nurturing, with email campaigns following closely behind at 64.4%. Just a quarter said they used pay-per-click ads to get leads.

Tactics Used by US B2B Marketers for Lead Nurturing, April 2018 (% of respondents)

Digital Transformation is Needed

Some B2Bs may not be comfortable using certain digital tactics because their company hasn’t undergone a digital transformation.

“B2Bs are comfortable buying direct from a digital publisher because that is the way their business is set up to purchase digital media,” said eMarketer analyst Jillian Ryan. “Whereas B2B firms that have gone through digital transformation generally have the right people and technology in place to execute more sophisticated digital ads with greater volume.”

Many B2Bs cite a lack of the necessary skills (marketing business intelligence and marketing operations) on existing teams as a challenge. Once those positions are in place, more B2B companies will be able to implement data-driven advertising.

Convincing stakeholders to allocate budget for unproven methods can be a challenge as well. B2Bs that want to increase spend on digital should first get a handle on what is happening in customer relationship management [CRM] and have an understanding of how people and accounts are moving through the funnel.

The Challenges of Programmatic

B2Bs looking to reach niche audiences are still facing several barriers. In many cases, programmatic ad tech providers—especially those that aren’t ABM-specific—are still designed for B2C [business-to-consumer] advertisers, which means there is a lack of scale if B2Bs are too specific with their audience segments.

With today’s fragmented attention across many channels, such as AI-driven discovery services, like search engines, maps, apps, directories, and voice assistants, are you doing what’s necessary to make sure customers find you when — and where — they search?

One of the biggest hurdles in getting B2Bs to go programmatic is the lack of scale. For example, many B2B companies want to target only a small audience segment, during a particular day-part. That doesn’t quite work — the ability to spend and hit the desired reach and frequency isn’t what it needs to be. So many marketers will continue spending on trades, magazines and events.

The high price tag that comes with programmatic is another hurdle B2Bs face, especially those without B2C arms and the sophisticated tech stacks that accompany them. When a client buys ads directly from from publishers, all of that investment goes to the media itself. With programmatic, that’s not the case. A typical supply chain for a programmatic buy results in less than 50% of the initial budget being spent on publisher inventory, with the rest being spent on middlemen and tech providers.

Data Challenges

Most B2Bs have a CRM system in place. According to September 2018 research from Dun & Bradstreet and Adweek Branded, 36% have a CRM with advanced functions, and 48% have basic functions. Still, many have a hard time combining their first-party data with their second- and third-party data.

A separate study from Dun & Bradstreet found that nearly a quarter of brands rated their organization’s ability to manage their first-party data as “above the competition,” and only 18% thought the same of their third-party sources. Again, B2Bs with B2C arms are much more advanced in how they piece together data sources.

Planning for Growth in 2019

Many industry experts emphasized that 2019 would be a year of growth for digital ad spend. In fact, estimates were increased by more than $500 million from the previous year (in line with larger digital ad spending estimates).

Even B2Bs in niche verticals that aren’t traditionally early adopters are starting to spend on digital. Tech, healthcare and financial services companies are doing a lot of experimentation.

The shift could be credited in part to the larger trend of better alignment between sales and marketing teams, along with a desire to understand how marketing functions help sales teams close deals.

A hesitancy to go programmatic is also slowly changing as more B2Bs double down on the wealth of new ABM platforms and people-based strategies.

As the market evolves and data pools and targeting capabilities become more advanced, it is likely that the shift to digital advertising will pick up.

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