B2B brands build extra marketing muscle

Business powerbrands flex marketing muscle: heavyweight marketing activity is paying off for the biggest players in the business-to-business sector after 14 claimed a place in the BrandZ list of the top 100 most valuable global brands.

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They may not be household names in the consumer market, but the power of business-to-business brands should not be underestimated. Despite a depressed global economy, the world’s top business brands are worth a combined $360bn (£222bn), according to insight firm Millward Brown.

Fourteen business-to-business brands are included on the annual BrandZ list of the top 100 most valuable global brands, revealed exclusively in Marketing Week in May. These include Goldman Sachs, SAP and PetroChina (see below).

The top two B2B brands, technology giants IBM and GE, are members of the overall global top 10 list in their own right. While IBM tops the B2B list, with its $100.8bn (£61.84bn) brand value jumping 17% from last year, it also ranks third on the global list (see Method, below).

Millward Brown’s BrandZ director Peter Walshe says that these business-to-business stars have risen in value by more than 12% year-on-year. They are overcoming poor economic growth predictions by using fun, eye-catching communications, which are often seen as the domain of their consumer-facing counterparts.

Logistics giant UPS, which is in third place on the B2B list, has gained heightened brand awareness thanks to its reworking of the Dean Martin song That’s Amore in its TV campaign, which gives it a catchiness akin to Go Compare’s tenor character, Gio Compario.

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Meanwhile, this year’s Marketing Week Engage Awards saw the work of B2B winner Veolia Environmental Services hailed for its creativity (see Repositioning rubbish: How a B2B brand won a Marketing Week award, below).

And IBM UK brand leader Kate Pennell says the company has made changes in its communications strategy this year, looking for relevant case studies of how it aids businesses and pushing its charitable agenda (see Case Study, below).

“IBM is the most valuable B2B brand, growing by 179% over five years,” says Millward Brown’s Walshe. “It is a phenomenal story about a brand reinventing itself and creating fantastic communications that give a rationale for how it helps its users.”

IBM’s core business is in B2B technology solutions, systems and software. But this is not widely recognised by consumers, who largely believe the company still relies on the PC business it sold to Lenovo in 2005.

This might be one of its marketing challenges, but Walshe adds that the BrandZ survey’s business respondents rate IBM as one of the top 10 brands worldwide in areas of leadership and responsibility, showing that it is recognised as being at the technology forefront.

Viewpoint
By Joe Fernandez.

B2B brands are those that have best noticed the recent shifts in spending power and modified their marketing efforts accordingly. Recent ad campaigns have become more personable and investment has been ploughed into sponsorship to enhance their global exposure at high profile spectator events.

IBM’s prestige in the advertising industry is unquestionable. Armed with a $500m (£310m) global advertising budget, it has worked closely with agency Ogilvy & Mather Worldwide to position its brand in a way that resonates with its entire customer base. It is using its Smarter Planet initiative to show how its systems are helping people work in a more efficient way.

Fergus O’Hare, associate creative director at Ogilvy Paris, explains: “Smarter Planet works well because it tells complex stories in a simple way that everyone from the man on the-street to the corporate chief executive will understand. It shows smart things happening around the world in a simple but graphic way.”

Such strategies can be seen with other brands on the list. The agency also worked on the We Love Logistics global campaign for UPS.

O’Hare notes that the “light, playful tone with the complex global message is a good evolution for UPS.”

For these firms, B2B may be their biggest revenue driver, but the need to please the average consumer will continue to fuel their advertising in future.

GE follows IBM on the list. Its operations in technology, healthcare, finance and media give the company a brand value of $50.3bn (£30.9bn), up 12% on last year.

GE has embarked on a push to showcase its contribution to and sponsorship of the London 2012 Olympics, while it also uses its sponsorship of the Lotus Formula One team to increase awareness of its engineering divisions in emerging markets.

GE head of sponsorship and Olympic marketing Chris Katsuleres told Marketing Week last month the brand would be stepping up its communication of the tangible benefits of its services, such as energy generation systems and healthcare technology.

“GE is a brand that stands clearly for what it is – a long-established, innovative leader,” says Walshe. “It is not a brand that shouts from the rooftops, but one that quietly and efficiently gets on with providing great products and service.”

Another London 2012 tier-one sponsor, UPS, which ranked third in B2B and 17th globally, embarked on its biggest marketing campaign in September last year, using the We Love Logistics strapline (see Q&A, below). UPS chairman Scott Davis said at the time: “Package delivery will always be the foundation of our business but today UPS can do much more for customers. No-one is better positioned to help companies tap into the power of logistics.”

Perhaps its new attention-grabbing approach, which included sponsorship of emerging designer Jena Theo during London Fashion Week in February, helped the company’s brand value to rise 35% year-on-year to $35.7bn (£22bn).

“Customers strongly endorse the service they get from UPS,” notes Walshe. “It is among the global top 10 brands in our trust metric.”
The brand’s main competitor, FedEx, may lie nine places below UPS in 12th spot but its brand value of $11.8bn (£7.3bn) has risen by an impressive 25% on last year.

Case study: IBM

While IBM provides software solutions to businesses, elevating its profile among the public seems to be paying off. IBM tops BrandZ’s B2B list with an increase of 17% from last year.

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Smart Planet strategy: Shows how IBM’s technology is helping the environment

IBM’s UK brand leader, Kate Pennell, says highlighting how it is present in day-to-day functions and escalating the company’s corporate social responsibility agenda is helping it to earn a place in the hearts of consumers, which in turn gives it greater kudos with business customers.

Pennell says: “We are very much in the fabric of society. We run the backbone of the ATM network and we are behind the systems that enable you to order your driving licence online. That’s all IBM technology.

“It’s important that our clients understand that we are at the heart of innovation, even though people can’t necessarily see our logo.”

IBM’s Smarter Planet strategy, Pennell adds, is about showing how IBM chip technology helps the environment as well as users.
“You could put a chip into the lid of a bottle bank so that, rather than the council collecting the contents every week regardless of whether it’s full or not, they can pick up the contents when the bank is full. This is a simple example but you can see the impact when you multiply that.”

IBM has embarked on a global volunteering initiative to coincide with its centenary, which includes encouraging all employees to do a day’s volunteering and deploying IBM staff to help businesses in developing countries.

Pennell says that this has the additional benefit of helping to attract and retain staff, which can often be a challenge for B2B brands.

“This has all had a positive impact, both internally from a morale perspective and externally in terms of our visibility,” Pennell says. “There is still some way to go because the challenge that some people think we still make PCs isn’t going to go away overnight.”

Just behind UPS in the B2B list are technology giants Oracle, in fourth place, and SAP in fifth. Both leaders in business management solutions and software, they each have a brand value of around $26bn (£16bn) and have increased by a similar amount in the past year. They rank highly in the BrandZ table for being ’assertive’, ’in control’ and ’creative’.

“A common factor across many strong brands is the personality of the chief executive when it is closely linked to the company and brand. These brand characteristics might well be describing Oracle chief executive Larry Ellison,” says Walshe.

SAP’s vice-president of brand experience, Costanza Castelnuovo-Tedesco, says the company’s ranking is a result of having a clear brand promise in its campaigns of helping businesses to run better. “A powerful way to demonstrate our brand promise is to talk about the personal affinity people have for their favourite brands. For our campaign, we spoke to the customers of our customers to expand the awareness of SAP among a broader audience,” she says.

Communications hardware and services provider Cisco comes in at seventh in the B2B list with a brand value of $16.3bn (£10bn). It is a tier-two London 2012 Olympics sponsor, and Walshe says this is a “great opportunity” to showcase its brand values.

Similarly, Siemens, operating across energy, healthcare and telecommunications, is a sponsor of the Great Britain rowing team, with a special focus on offering “adaptive solutions” for rowers with a disability. Siemens is another of BrandZ’s B2B high-fliers, with a brand value 29% higher than last year at $12bn (£7.4bn).

Q&A: Nick Basford vice-president of marketing, UPS Europe

Marketing Week (MW): BrandZ values UPS at nearly $36bn (£22.2bn). What has made the brand so valuable?

Nick Basford (NB): There are fundamental principles that have never gone away, from the reliability of our service to the appearance and standards of cleanliness for our trucks and drivers. We move at least 15 million packages and documents a day in more than 220 markets. Since becoming a publicly traded company in 1999, UPS has acquired more than 40 companies, and in each case we have integrated other businesses by having them adopt our standards to maintain the integrity of our brand.

MW: Why has UPS run such high profile marketing campaigns in the past year?

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Loving logistics: UPS is now delivering high-profile campaigns

NB: Through the acquisition of various companies, including industry leaders in trucking and air freight, customs brokerage, finance and international trade services, our business capabilities have expanded. We wanted a brand platform that reflected that. We wanted to move away from promoting our brand in a market-specific way to a single platform that resonated around the world.

The That’s Logistics campaign was designed to appeal to a wider audience but is fundamentally still there to attach more detailed and practical messaging behind the brand. The media mix is still widening – That’s Logistics launched in September and we have only run the full above-the-line campaign in 120 of our 220 markets.

MW: What are the main challenges of marketing a B2B brand compared with a consumer brand?

NB: In some instances, perfect B2B marketing is “invisible” because B2B brands offer something that can potentially dilute the impact of another brand. But we have become a part of that customer experience – we’re visible by the nature of our business.
A 30-second TV spot doesn’t necessarily reflect the complexity of the added value we offer to our customers, so we have to be creative and efficient in our messaging.

It is extremely important that we still appeal to end consumers, as the reputation of our customers with their clients is at stake. If the end consumer feels that service at the point of delivery is compromised, they will form a judgement on our customer’s product.

MW: How much should a B2B brand engage with end users?

NB: Our delivery drivers are key to our rapport with end users. They are the ambassadors of our customers’ business. One of the key selling points of a B2B brand is to be highly regarded at the point of execution. This is an important avenue for the growth of our own business because many of our leads come from businesses to which we deliver.

This is one of the most important roles in the company. There are many years of support, investment, training and experience that go into our drivers, as well as making sure our vehicles are as modern as they can be with the technology we put into them.

MW: How do you manage the media you use to spread your brand message between consumer and B2B channels?

NB: For B2B marketing, we try to use media where dwell time is longer. In the past, print has served well, but we’re increasingly taking advantage of digital media, which allows us to add to the complexity of our messaging.

One example is UPS’s sponsorship of the London Olympics. The brand exposure opportunity is massive – 40 million items will go in and out of London in about six weeks.

Software brand Intel, best known for the four-note audio signature in its television ads, has the highest buzz – or talkability – ranking of all the technology brands in the BrandZ top 100, which may have something to do with the appointment of Will.i.am, the frontman of US band Black Eyed Peas, as brand ambassador in January. Intel said the collaboration was part of a “transformation strategy” for brand communications to focus more on the consumer experience, rather than simply talking about technology.

In marketing terms, Accenture is probably best known for its sponsorship of Tiger Woods after the management and technology consultancy severed ties with the US golfer in late 2009, following his public fall from grace. With a brand value of $15.4bn (£9.5bn) – up 5% from last year – Accenture ranks eighth in the B2B list.

The B2B BrandZ list is not without its surprises, with oil companies occupying three of the spots. ExxonMobil in sixth, Petrobras in 10th and PetroChina is ranked 13th.

“Like many of the big oil and gas company brands, ExxonMobil is not greatly loved and indeed is felt to be quite arrogant,” comments Walshe. “But the essential nature of its exploration capabilities is acknowledged, particularly by analysts, government decision makers and regulators.”

In 14th place is banking firm Goldman Sachs. However, the public’s lack of faith in financial brands has contributed to a 9% cut in its brand value from last year, down to $8.4bn (£5.2bn).

“Goldman Sachs does rate as one of the most successful brands of our time, even if it is not much loved,” Walshe claims.

While many of BrandZ’s high performers are heading in the same direction in terms of readdressing their communications to become more interesting to the wider public, Walshe says there is a communal theme across all the companies on BrandZ’s global list.

“Adapting to circumstances in a way that’s unique to your brand, while accounting for consumers and how they relate to you, is a survival lesson and one of the ways to grow your brand.”

Repositioning rubbish: How a B2B brand won a Marketing Week award

The challenges of building the profile of business brands were highlighted at the 2011 Marketing Week Engage Awards.

The Business to Business category showcased the efforts of brands that met that challenge head-on. For its “beautiful execution” that helped change the perceptions of waste management, judges named Veolia Environmental Services as the winner.

Veolia and agency IAS B2B Marketing aimed to redefine the brand and the concept of waste management with a campaign featuring wildlife images to illustrate Veolia’s approach to corporate social responsibility. It also wanted to show how it helps local authorities and consumers re-use and recycle more effectively.

Judges commented: “This tremendous example of brand repositioning showed how the unpromising subject of waste management can transform itself. In a category not known for its creativity, it transformed awareness of all stakeholders.”

The images were then linked to Veolia’s sponsorship of the Wildlife Photographer of the Year competition, also devised to regenerate interest in the brand.

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Beautiful execution: Part of Veolia’s award-winning entry

Veolia Environmental Services marketing manager Wayne Foy explains the brand drew on an increasing awareness of recycling to give the campaign more resonance across a wider audience. “We had to address the challenge of having a marketing campaign which would give us a harmonious but flexible message across numerous important groups – local authorities, businesses, employees and the public,” he says.

Foy adds: “How the public views our service affects our client relationship and vice-versa, not least because many of the procurement team responsible for tendering processes may actually be the end-users of our service.”

While B2B and consumer marketing both aim to convince a target audience to buy a brand’s goods and services, Foy notes that B2B marketing challenges come from different purchasing drivers.

“You are more often than not dealing with professionals who are as knowledgeable about the service or product they are buying as the seller. They aren’t spending their own money, can’t always make an autonomous decision and are often rewarded for achieving the best possible deal,” he explains. “Combined with an often protracted purchasing cycle and the need to build strong relationships, all these factors make the buying decision and marketing challenges quite different.”

Perhaps the biggest difference is around rational decision-making and the customer looking to fill a need rather than a want, so emotions play a lesser role than in consumer marketing. However, as Veolia has shown, producing a more rationally focused campaign need not be dull or have a narrow angle, but can be lively, informative and entertaining.

Method

Millward Brown creates the BrandZ top 100 global brands list by using insights from more than 1.5 million consumers and professionals in 31 countries to compare 50,000 brands. Business-to-business brands are classed as those that attract the majority of their revenues from business customers.

Of the top 100 global brands, Millward Brown classes 14 as B2B brands.

Calculations include intangible earnings based on company and analyst reports allocated to each brand by country. Kantar Worldpanel and Bloomberg data is also used.

Millward Brown then looks at market valuations, growth potential and customer loyalty, and combines all this data for its brand valuations.

See MWlinks.co.uk/BrandZ for our cover feature on the 100 most valuable global brands.

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