The rising cost of B2B marketing
Many CMOs tell me that they expect their marketing to get cheaper. The logic is that online advertising is cheaper, programmatic ads are cheaper, building websites is cheaper, many digital platforms are free! Marketing automation provides efficiency, and the availability of rich data informs better targeting and better product development. So why do their annual budgets keep going up?
There’s lots more to focus on, and tech is the root cause. The crux of B2B marketing rests in the targeting strategy, and as media channels are more fragmented, so is the targeting, which requires more number crunching, which in turn requires more heavily skilled people.
Marketing automation programmes are only as effective as the results and analysis that’s used to optimise the system. And this system needs to be planned, set up and micro-managed. More skills required here. Economies of scale for B2B brands are harder to find, as activity is fragmented across PR, social, experiential, right down to specialised tactical campaigns which in turn require a diverse skill base. It’s a bit like growing your fleet of cars, because lease cars are cheaper than ever, but then you realise you need more licensed drivers.
The upshot is good. Well skilled people are expensive, and their stock is on the rise. In fact today, the average company needs such a variety of specialist marketing skills, that once you’ve built your in-house team, you’ll probably find out you’re only utilising each person for around 30% of their time.
This is why so many CMOs have failed when scaling up in-house teams, with their sole intention to reduce their reliance (and spend) on outsourced capability. The so called in-housing model might look cheaper on a spreadsheet, but getting an intern to run your social media rarely pays off.
CMOs have never faced such a challenging time. Business goals haven’t changed but their requirements have. Accountability for marketing has never been higher. So here’s why your marketing budgets are on the up and what to do about it:
More data = more processing
Grappling with mountains of data, because it’s cheap and quick to acquire? Most don’t consider how expensive it can be to interrogate. Pumping in volumes of data is rarely useful, and data analysts are expensive. Get your data strategy sorted from the beginning, and get it done by a pro data strategist. Without getting it right, your KPI’s will be nothing but guesswork, and your ability to manage your stakeholders will be blown. So you can avoid an overly critical sales director with a Seth Godin book on marketing under one arm from the outset.
Mobile innovation changes everything
Looming mobile releases means constantly updating your technology and platforms, your customer journey, and your multi-channel user experiences. This digital debt is what you carry forward each year, and it doesn’t always appear on your P&L. The more you build, the more you have to fix, maintain and upgrade. CMO’s often fail to factor this in, which is why a rebuild takes place every three years. Not only is this wasteful, it’s also short-sighted and the cost of opportunity can be huge. It’s inflation without the pay rise. Take an informed and agile approach, keep building, keep moving forward and test before pressing the kill switch.
Tech software and platforms
Feature rich marketing automation platforms carry subscription costs, many of which are low at entry or hidden altogether. But when you start to grow, your reliance on these systems grows with it. That’s when they know they’ve got you. They often require your team to provide development support, marketing, creative, content and administrative support too. That means broader skill sets are required in your internal and agency teams, which layers on the labour.
So how do you get a grip?
1. Get organised
Set some rules. Know your brand, know your tone of voice and use this to inform absolutely everything everyone does for you. That includes your in-house teams and your agencies. The nature of marketing today means you’ll be producing much more ‘stuff’. So make an effort to get it organised. Consistency is key, and this should reduce rework as you move forward.
2. Join up your sales and marketing effort
Be clear where marketing ends and sales starts. Account based marketing has confused this for many people, but the lines of demarcation should be clear. The goal should always be to build relevance through a common understanding, and trust by demonstrating empathy. It’s as close to a relationship any marketer or salesperson can hope to get without meeting. The expanded features in SalesForce and other CRM systems have shown how this can sprout from your content strategy. So, to be efficient you need your marketing team to feed the machine, and really support your sales team when closing the circle.
3. Activate a social strategy
Growing your circle of influence through social is more accessible than ever. Accenture do this really well. With the right content strategy in place (adequately supported by your PR efforts) it means that activating your brand through networks like LinkedIn is more cost effective. And if you get the content right, your circle of influence will grow exponentially. We all know this works for consumer brands, and with a little paid ad budget, it’s enough to get good ideas to grow.
4. Ideas are always worth paying for
We recently underwent a tough round of negotiations pertaining to the time and fees associated with the creative retainer with one of our global clients. Yet the subscription fees for various tech platforms, reporting tools and media were signed off without question. You need to believe that creativity rules. Big brands are looking for automation and efficiency – but are ignoring the most important thing, that can make all the difference. Be different by being creative. Ideas are worth paying for. Marketing automation, media and tech platforms are the areas to squeeze down on price. But be quick, because it won’t be long before the big brand CMOs and procurement heads wise up.
5. Be agile
Finally, whenever possible, take an agile approach. Try new ideas, if they don’t work, fail them fast and try something new. Keep your investment low but be willing to spend more budget quickly when you find something that works because everything can change pretty fast. Use this as your checklist and you won’t go far wrong.