Three revolutions are converging but only good marketers will benefit
B2B brands built on the back of Ehrenberg-Bass’s principles, using AI to amplify their advantages, will dominate the market in the coming century.
It’s the year 1517.
You’re a spice merchant in Venice, chilling in your office near the Rialto Bridge, reading the latest pamphlet, hot off the printing press. There’s a lot of informazioni to digest.
Some swashbuckling Spaniards are about to set sail for the ‘New World’. Your childhood friend from Florence continues to rack up rave reviews for his fresco on the ceiling of the Sistine Chapel. And some troublemaker in Germany just nailed some contrarian thought leadership to the doors of a church.
It’s the dawn of a new age – the age of exploration, renaissance and reformation.
One revolution is rare enough, but three revolutions, converging all at once? Mamma mia! What will it mean for your spice business?
OK, now it’s 2024. You’re a B2B marketer in Milan, swivelling in your Herman Miller Aeron chair, scrolling through LinkedIn on your iPhone. You may not know it, but like your great-great-great grandfather, your job is about to be disrupted by three revolutions.
1. The B2B revolution
For the past 100 years, the marketing industry has focused primarily on B2C. Breakfast cereals, chocolate bars, dishwashers, SUVs, laptops. We grew these categories into mass markets by pairing commerce (physical availability) with creativity (mental availability).
Coca-Cola may be the finest expression of B2C marketing, having created everything from an iconic bottle to an iconic phrase (‘within arm’s reach of desire’), to an iconic character (Santa Claus). B2B has been the opposite of Coca-Cola. It’s the red-headed step-child of the industry, a ‘niche’ that happens to represent 50% of the global economy.
But not any more. Now the biggest growth opportunity is in B2B.
Cloud computing, CRM, HCM, cybersecurity software, digital workflow solutions – these are the categories of the present and the future. ServiceNow has a bigger market capitalisation than Ford and Ferrari combined. Same for Oracle. Same for Salesforce. Same for SAP.
Cloud computing is a $791bn (£604bn) business, with an expected 20.2% CAGR, according to Gartner. Soft drinks is a $434bn business, says Grand View Research, with an expected 4.7% CAGR. That’s right, the red-headed step-child is all grown up, and she remembers that you never invited her to Cannes or covered the launch of her new IT infrastructure product.
Clearly B2B is where you need to be. But what will B2B marketing look like in the 21st century? Well, that’s where the other two revolutions come into play.
2. The EBI revolution
If you don’t know what EBI stands for, then sadly you’ve been living under an intellectual rock. And to be clear, most marketers are living under that rock. Instead of reading How Brands Grow, we’ve gorged on bad advice from ‘digital gurus’, who have pushed an adtech and martech agenda that obsesses over capturing demand and gives little thought to creating demand.
Fortunately, the Ehrenberg-Bass Institute (EBI) has ushered in a counter-revolution – a reformation, if you will. Professors Byron Sharp, Jenni Romaniuk, Rachel Kennedy, John Dawes, Nicole Hartnett and their army of PhDs in Adelaide have discovered the ‘laws of growth’, grounded in empirical research and single-source data. EBI has codified the twin pillars of mental and physical availability – supported by trackable metrics – to explain the fundamental principles of marketing effectiveness. When you add in the contributions of luminaries like Mark Ritson, Les Binet and Peter Field, Grace Kite, and Karen Nelson-Field, you get a new B2B playbook for brand-led growth.
Elite B2C marketers have been putting this playbook to work for the past decade. If you reference the Ehrenberg-Bass Institute at elite FMCG firms like Mars and Diageo, you will get head nods. But at most companies, especially in America, you will get blank stares. You might as well reference the Snuffleupagus Institute.
But that’s starting to change.
Last year, the Wall Street Journal wrote about Rao’s, the pasta sauces originally served in a legendary New York City Italian restaurant. Rao’s applied the EBI playbook to grow revenue from $100m in revenue to $580m, and then sold to Campbell’s for a delicious $2.7bn. This was, maybe, the first ever reference to Ehrenberg-Bass thinking in mainstream American news (never mind that the WSJ mistakenly referred to it as “mental awareness”).
And now, the EBI revolution is spilling out of FMCG and into B2B, with more and more firms investing in broadly targeted, category entry point-led advertising that creates a memorable link between a B2B brand and a buying situation. But in the past, implementing Ehrenberg-Bass-style marketing required deep expertise and deep pockets. B2B companies traditionally do not have the buy-in, or the budget. It’s an expensive approach that’s mostly reserved for B2C brands, where the marketing is the business.
Enter the final revolution.
Read the full article on Marketing Week.
