The ‘Flippening’ will usher in a Golden Age of B2B marketing

Brand marketing creates more financial value than short-term performance marketing – the sooner B2B marketers flip their perspective and start allocating budgets accordingly, the better it will be for everyone in B2B.

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Should you be optimistic about the future of B2B marketing?

We are optimists, believe it or not. We believe B2B marketing is on the cusp of a Golden Age, a glorious revolution that shall be ushered in by a momentous event.

And we call this event…the Flippening.

To understand the Flippening, first you must understand the three numbers that explain everything that’s wrong with the B2B marketing industry.

80%, 95% and 8%.

First, 80%. If you talk to a financial analyst, they’ll tell you something like 80% of your share price is based on cash flows that are 10 years out into the future. Contrary to conventional wisdom, Wall Street is not short term. The market values businesses on their future cash flows.

Second, 95%. According to our research with the Ehrenberg-Bass Institute, something like 95% of buyers are not ‘in-market’ to buy your products right now. That means effective marketing works primarily by reaching the 95% of customers who are not yet in-market, increasing the odds your brand gets remembered when those customers do enter the market in some future period.

Contrary to conventional wisdom, delivering short-term sales isn’t the most important job for B2B marketers, because only 5% of customers are ready to buy today. The most important job is influencing the 95% of future buyers who generate future cash flows.

Ehrenberg-Bass: 95% of B2B buyers are not in the market for your products

And finally, 8%. According to LinkedIn data, B2B marketers spend around 8% of their budgets on brand awareness objectives. Something like 92% of B2B budgets are dedicated to short term, bottom funnel objectives like lead generation.

This so-called performance marketing may capture sales from in-market buyers, but it has little to no effect on future buyers. Brand marketing is much better at building the lasting memory structures that determine future sales.

85%. 95%. 8%.

One of these numbers makes 0% sense. If 80% of your stock price is based on future cash flows and 95% of your buyers are future buyers, why would you spend only 8% of your budget on brand marketing, which increases future sales from future buyers? Why would you spend 92% of your money chasing after 5% of your customers? Isn’t that a massive misallocation of capital?


But don’t worry, the correction is coming.

Brace yourself for the Flippening.

The Flippening: When 8% brand becomes 51% brand

So what the flip is the Flippening?

The Flippening is that magical moment when B2B businesses realise that brand marketing creates more financial value than short term performance marketing, and B2B CMOs begin to allocate at least 51% of their budgets to brand marketing.

The Flippening will spark a positive chain reaction, which will be good for everyone in B2B.

The shift to brand will benefit businesses, since brand 1) increases long- and short-term sales, 2) improves pricing power, 3) reduces talent acquisition and retention costs, 4) unlocks growth in new categories, and much more.

Sales does not share power. The bottom of the funnel is the land of Mordor, where sales torments marketing for all eternity.

By creating more commercial value, marketing will enhance its status within B2B organisations. Instead of sitting in the basement, colouring in our whitepapers and sales collateral, marketing will get back to the boardroom with the decision makers.

Moving up the funnel will also make the job of B2B marketing a million times more enjoyable. The problem with the bottom of the funnel is that marketing has to ‘share’ its success with sales. And as Gandalf once said to us: “There is only one Lord of the Rings, and he does not share power.”

There is only one department that will ever get credit for delivering short-term sales, and it’s the sales department. Sales does not share power. The bottom of the funnel is the land of Mordor, where sales torments marketing for all eternity. The top of the funnel is the Shire, where marketers can frolic like happy little hobbits. Marketing has a monopoly at the top of the funnel. Only we can influence future buyers at scale through brand advertising.

The Flippening will even benefit performance marketers, both by lowering their precious cost-per-leads and by increasing their budgets. That’s right – we don’t believe brands’ growth will come at the expense of lead generation. It’s incremental. Businesses need to both influence ‘out-market’ buyers and capture in-market buyers. The Flippening will grow the overall marketing budget. Performance marketing will receive a smaller slice of a much bigger pie.


Why B2B marketers need to bet big on ‘The Big Long’

Performance branding is the path to prosperity

There’s only one thing standing in the way of the Flippening – us brand marketers.

For the dream to become a reality, B2B brand marketing needs to rise to the occasion and position itself differently. There’s a reason brand only gets 8% of the budget today – much of what gets called ‘brand’ is not particularly effective or compelling.

For example, many brand marketers say their goal is to increase ‘brand love’. Every time a CMO uses the phrase brand love a marketing effectiveness angel bursts into flames, finance shaves a few zeroes off the brand budget and sales orders another lobster dinner.

News flash: humans don’t love brands here on planet Earth. Here on planet Earth, humans choose brands out of pure laziness, buying whichever brands comes to mind most easily in a buying situation. And what’s love got to do with that? Absolutely nothing. CFOs don’t take brand love seriously, and rightfully so – it’s not a serious idea.

If brand marketers want to grow our budgets, we’ll need to distance ourselves from the brand love and brand purpose fanatics. Celebrity CMOs have managed to make brand marketing sound like an arts and crafts project for aspiring astrologers. You need an MBA from Hogwarts just to understand what most brand marketers are saying, let alone how their work contributes to the bottom line. Thanks to these folks, brand has a serious brand problem.

Every time a CMO uses the phrase ‘brand love’ a marketing effectiveness angel bursts into flames, finance shaves a few zeroes off the brand budget and sales orders another lobster dinner.

Instead, we need to embrace what we call ‘performance branding’. Performance branding is brand building that’s designed to maximise profits, not love. It’s grounded in the empirical research of experts like Professor Jenni Romaniuk, framed in financial language, and measured with market-based metrics like share of voice, cost per reach, and category entry points, which measure the odds of your brand coming to mind in a buying situation. Performance branding reaches every buyer in the category with well-branded creative that captures attention and links the brand to buying situations. Its brand purpose is to generate future cash flows.

There is a new generation of B2B brand marketers putting these ideas into practice. Serious marketers, like Colin Fleming at Salesforce, Jennifer Chase at SAS, Lisa Joy Rosner at Oracle, Brent Reinhard at Chase, Jim Lesser at ServiceNow, Sumit Virmani at Infosys, Richard Maclachlan at Workhuman, Antonia Barton at BT, and many more. We hope to write about their work in future columns, but for now, let’s just say these marketers are the reason we’re optimistic about the future of B2B. The industry needs more examples of great B2B brand building, and these marketers are setting a new and higher standard.

The future of B2B is bright, and the future of B2B is brand.

The Flippening draws nigh.

Peter Weinberg and Jon Lombardo are the heads of research & development at the B2B Institute, a think tank at LinkedIn that studies the laws of growth in B2B. You can follow Peter and Jon on LinkedIn.

Mimi Turner, who is head of EMEA and Latin America at The B2B Institute at LinkedIn, will be talking on a panel about how B2B marketers can deliver greater impact and gain more influence at the Festival of Marketing: Transform. The event takes place on 23 to 25 March at The QEII Centre in London and online, and there are a number of ticket options. Visit the website for more details and to book your place.

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