The long, the short and the reality of B2B marketing: Part 1

This is the first blog post in a two-part series from the CMA B2B Council, diving into the topic of short-term conversion and long-term brand plays. Read on to learn more.

Just what is the ideal mix of long-term and short-term B2B marketing efforts? There happens to be one, and in the following post, we explore realistic ways to achieve it, from multiple points of view.

Ten long years ago, Les Binet and Peter Field came out with their ground-breaking book, “The Long and the Short of It: Balancing Short and Long-Term Marketing Strategies” (The Long and Short). A key finding from the research behind it is the 60:40 Rule, which is described below:

To maximize long-term brand profitability, the ideal investment proportion of long-term (brand/building) strategy and short-term (activation/performance) strategy is 60:40. In this context, long-term is more than three years, while short-term is up to one year.

The research behind the 60:40 Rule

The Long and Short is based on 30 years of detailed campaign submissions to the IPA Effectiveness Awards:

• 1000 UK and international campaigns
• 200 data fields for each submission
• Covers 700 brands in 80 categories

Learnings since The Long and Short

Over the last 10 years, the database upon which the 60:40 Rule is based has grown to show us the following:

• On average, the 60:40 Rule still holds up, though it can vary to some extent year-over-year. Also, there are slight variations in the 60:40 Rule based on business category.
• The 60:40 Rule holds true in both B2C and B2B marketing.
• If anything, follow-up research shows that B2B brand building spend should be even higher than 60% of the total budget.

Canadian research from 2022, modeled after research done by Binet and Field, indicates that on average, successful marketers are currently spending 30 to 40 per cent against brand building strategies, coming in at half of the ideal. We can assume that Canadian marketers outside of this group are spending even less on brand and more on activation or conversion. While presenting this research in April 2023, Peter Field stated that “Canadian marketers have more of a propensity for short-term marketing than colleagues in the UK and Australia.”

The ideal versus the reality

It is acknowledged that most Canadian CMOs working for international brands often do not have control over brand strategy or the spending against it in Canada. Even CMOs working for Canadian-based brands struggle to win over their CFOs and CEOs on the 60:40 Rule. It is also difficult for most agencies and marketing partners to have any influence over a brand’s marketing budget allocation.

Here are some thoughts and possible ways forward from multiple perspectives:

“Up your budget pitch” – recommended by Dave Burnett, CEO, AOK Marketing

As a performance marketing agency, we understand the importance of generating revenue and driving conversions for our clients. We also recognize the value of building a strong brand and establishing a lasting connection with consumers. The simple fact is that people have to know who you are in order to buy from you.

One way for Canadian B2B marketers to move closer to the ideal 60:40 long-term/short-term strategy mix is to track the right metrics – especially those that are closely linked to ROI. If you have the right numbers to back your argument for more money, the more likely it is you’ll get approval. Here are a few metrics to consider:

Brand measurement

Brand measurement metrics are essential for tracking the effectiveness of brand building efforts. These metrics include the number of actions taken by consumers, the percentage of actions taken, and conversations surrounding the brand. Amplification metrics track how much your brand is being shared and talked about on social media, while applause metrics track the level of engagement and positive sentiment surrounding your brand. Indexed brand awareness metrics track how recognizable your brand is in your industry, while the percentage of new visits and recency and frequency metrics track how often consumers are interacting with your brand.

Conversion measurement

Conversion measurement metrics are essential for tracking the effectiveness of conversion focused marketing efforts. Conversion rate metrics track the number of visitors to your website who complete a desired action, such as making a purchase or filling out a form. Visitor loyalty metrics track how often visitors return to your website, while checkout abandonment rate metrics track how many visitors leave your website before completing a purchase. Profit metrics track the revenue generated from sales after subtracting advertising costs and the cost of goods sold, while economic value metrics track the total value of a customer over their lifetime. Task completion rate metrics track how many visitors complete a desired task on your website, such as filling out a form or making a purchase.

By tracking the right metrics for both strategies, you can build a case for your CFO to allocate more funds towards marketing efforts or adjust the long-term/short-term mix. By using these metrics to measure the success of the marketing strategy, you can present a clear picture of the ROI and demonstrate how the two strategies are working together to drive revenue and build a strong brand.

“Marketing beyond marcom” – recommended by Jay Badiani, CMO, IBM Canada

Event marketing is an example of combining these strategies beyond marketing communications. Take for example IBM’s flagship conference, Think. IBM invites clients and partners to gather together and learn about the company’s latest announcements and industry use cases. This is a brand experience with senior IBM leaders, sharing a strategic technology roadmap including differentiating capabilities. In addition, with client consent, IBM also tracks the interests of visitors at specific talks and product demonstrations as demand-generation activity to create and nurture future leads. Event marketing is a way to bring balance to brand building and conversion.

Sponsorship marketing is another way to combine and balance branding activity with demand generation. IBM is the official cybersecurity and technology consulting partner of the Toronto Raptors, and there are signs around the Scotiabank Arena highlighting this partnership. IBM makes offers to clients to attend Raptors games with cybersecurity SMEs and consultants and to play basketball with colleagues at the IBM Court inside Scotiabank Arena. The combination of in-arena branding and face-to-face interaction around basketball drives ROI for the sponsorship.

This discussion will be continued in Part 2 of this blog series, coming soon. Stay tuned for more perspectives.


Authors:
Jay Badiani, CMO, IBM Canada
Dave Burnett, CEO, AOK Marketing
Steve Lendt, Director, Engagement and Analytics, Motum B2B
Tristan Retelsdorf, Director of Marketing, TELUS Business
Robert Wyatt, Business Services Director, Optima Communications International