$137.8B U.S. ad spend for top 200 advertisers
BtoB asked Segal and two other prominent b-to-b ad agency executives—Gary Slack, chairman of Slack & Co., and Tom Stein, president of Stein Rogan+Partners—to discuss the changes occurring in how businesspeople consume information and what those changes mean for marketers. Below is an edited transcript.
BtoB: Rick, you have argued that b-to-b marketing is obsolete. Can you give us the context of this statement and what you meant by it?
Rick Segal: As someone who spent the last 11,000 days of his life focused in the category, it's a comment that I do not make with the purpose of being an agent provocateur. I really, very sincerely believe that a paradigm has shifted, that b-to-b marketing is not only obsolete but it may well be very much dead.
Now, what that has to do with is the events of the last 17 years and two technological innovations—TDMA, which in 1993 made the mass distribution of mobile handheld technology feasible, and the other in 1993 would've been Mosaic, which put an Internet browser in the hands of us all. Those two things essentially transformed telecommunications in a way that puts telecommunications onto the bodies of individual people. And it has caused what were the barriers between work life and personal life to fall down and collapse.
To hear the full, unedited conversation, click play:
Agency Roundtable by btobmagazine
(This) has changed the way we talk to business decision-makers. Being at work is no longer a place; it is a state of mind, a kind of continuing oscillation that people are making between their work life and their personal life. I think probably all three of us along the way for years have been saying at the end of the day business-to-business is person-to-person. But I think what's happened is a much more profound change, and that is we no longer contact places of business, we contact individual people. I think it is just fundamentally changing the idea of b-to-b marketing.
BtoB: Gary, what is your reaction to Rick's statement?
Gary Slack: The way I look at it is b-to-b marketers in the past and in the future simply want to be present, noticeable and engaged where their buyers are. That was true 40 to 30 to 20 to 10 years ago. It's true today, and it'll be true 10, 20, 30, 40 years into the future.
So as our clients invest more in the new places where b-to-b buyers are congregating and spending their time these days—the Web, e-mail, search engines, LinkedIn, YouTube, social media, online communities, virtual trade shows and mobile—we're really not doing anything fundamentally different than what we and our predecessors have been doing for decades.
But just because we want to be where (buyers) are doesn't mean buyers want us to be everywhere they may choose to be. So I would say that while Rick may be right that individual people are now communications network nodes in and of themselves, that doesn't mean that bugging businesspeople to death on their mobile devices makes every other push or pull tactic that we've ever used to influence and engage buyers obsolete.
BtoB: Tom, what is your reaction to this?
Tom Stein: There's a lot of great thinking in what Rick has communicated, and I certainly think the notion of work-life balance being less and less demarcated is the case. That said, I don't think that anything actually has suddenly become obsolete. There's been a gradual change that has given rise to accelerated change. And the other thing that I would want to make a case for is that the people that we're communicating with—whether they're “prosumers,” or whether they're small-business people or the decision-makers in larger enterprises or in government or in education or in healthcare—all of these different kinds of people are not a uniform cohort. They are all distinct; they all consume media differently.
BtoB: Rick, with the growth of smartphones as a central part of your thesis, to what degree has your agency found ways to communicate to people through these devices?
Segal: I think that (the smartphone) is the icon of this paradigm shift when you come right down to it. I told the story in Berlin of a young person here when we did a session with a group on work-life balance, and I kind of came to that conversation as the stodgy old curmudgeon who said people have been talking to me about work-life balance all my career. The agency business is tough; we work long hours. Do you want a job or do you want a career? There's nothing new about work-life balance. And one of the young ladies reached into her jeans pocket and put her iPhone on the table and said, “Oh, yeah. It is different. It's attached to me. I can't get away from it. Work goes with me wherever I go.”
So it's clear that just as the desktop became a breakthrough for us in marketing to business decision-makers, the communications device now held in the hand or on the body of this person who is a business decision-maker or influencer is the new screen to which we have to be focused. So we're doing a whole host of things, from applications to social media work to optimizing what were once large corporate sites to things that can more easily be interpreted in a handheld device. That's the new game space of marketing communications.
BtoB: Tom, how are you approaching marketing to people on their mobile devices?
Stein: The tablets and the smartphones have become the devices of choice in a lot of cases; and, that being said, if they're the devices of choice, then our need to communicate to them, whether it's through ways and means as simple and as expected as advertising and in other ways entirely, I think it's a green field and it's something that's going to occupy our time and attention.
But I also think that it's going to take us into new avenues. And we, together with clients, are going to be able to create new opportunities that really cross the line from marketing to actual value delivery to customers, where it becomes an extension of a brand value proposition and service delivery to a client.
Now, I'll give you an example of that. We're actually working with a large retailer and we're working with them on a tablet application that's intended to drive interaction with employees. There's training interaction; there's access to benefits and things of that nature. Tablets are going to be made available to them at the stores in which they work. So is that an example of traditional marketing? No, it's not. But it's very much part of the marketing landscape that's being driven via mobile pervasiveness.
BtoB: Gary, any thoughts to add?
Slack: Like Rick's firm and Tom's firm, we're getting a lot more interest from clients in developing apps of all kinds. Last spring we started to see many of our clients' mobile website traffic metrics start to exhibit the classic hockey-stick upturn. We attribute that shift—and we're not involved with every single client in this space—to increased network speeds, certainly better mobile devices and capabilities and, of course, the b-to-b professional's need to always be in the know.
As our clients deploy mobile to even a greater degree in 2011, I think the key will be compelling content—especially, I would say, content in bite-size portions that are appropriate to both the second and third screens. It also means formatting Web content to be easily consumed on a mobile device and moving into online video that is mobile-consumable, not Flash-based.
Segal: If you'd have told me three years ago that USG Corp., a manufacturer of drywall, was going to come to us requesting the development of an Apple-approved iPhone application through which they could roll out a new product, I would've told you you were crazy. We just completed that last year as part of the rollout of their new lightweight product, and that was not a matter of them trying to do some marketing eye candy for the conference circuit. It was very much related to what it was going to take to move their product and communicating to the people they need to communicate to. And so we got probably a dozen such projects under way right now.
BtoB: Custom content is getting a lot of buzz. It's something agencies have always created, and I'm wondering—let's start with you, Gary—are you doing more of this?
Slack: I would say it's more. I did a little research on the question and learned that content marketing, we estimate, now accounts for up to 25% of our clients' total marketing budget. Now that's “up to”; the average is probably less. So if content is not king, it's certainly the crown prince. We are not necessarily involved with every client in content marketing, but we are involved where we're helping them move from just piecemeal to siloed content generation to integrated content planning, strategy and development.
Exceptional content marketing that works across all channels, across each phase of a b-to-b buyer's buy cycle, requires a pretty disparate set of skills for a marketer or agency. (It requires) traditional research, buyer insights to integrate with insights from Web analytics to keyword research. You need the message positioning skills of a branding expert to integrate and work with information architecture; and you need the editorial journalism skills of a skilled writer to integrate with the creative “concepting” ability of the creative team; and you need the skills of the direct response marketer to integrate with the modern planning inbound marketing and unique marketing strategists to really understand how to break down walls with sales, define leads and create overlapping nurture programs.
BtoB: Rick, do you have any thoughts about the importance of custom content?
Segal: For years, we've actually been driven to increasingly larger amounts of custom content delivery. But I think it's always been a part. On the new frontier, where I suppose we'll get to in our conversation, is what I'll refer to as “real-time custom content,” where we are right in social media discussion streams, creating content in real time, which is about as custom as you can get.
BtoB: Tom, I'd be very interested in hearing your take on how important this is going forward.
Stein: Content's always been part of an integrated marketing approach from our agency and it's long been part of our business. But I think there's been an absolute sea change over the last couple of years, and I think there are several specific reasons why. I think this is immensely important in the business-to-business space. Two years ago, Stein-Rogan launched a content marketing practice within the agency called Kilter, and we staffed it with domain experts: journalists—to match Gary's point—information architects and strategists, editors, real content professionals.
We're seeing a tremendous amount of interest around aggregated and curated content platforms, around video content platforms and multiformat content that's broadly syndicated across digital channels. The advent of marketing automation and lead-nurturing systems and platforms in b-to-b that, in turn, hook into CRM structures—these kinds of systems are extremely reliant on quality content in order to maintain conversations with prospects and to get (them) to a point of interest that they become sales-ready.
BtoB: I wanted to talk more specifically about social networking: Facebook, LinkedIn, Twitter. I'm wondering—Rick, let's start with you—to what degree do you think these three things have transformed marketing?
Segal: If you start in a b-to-b context, I've been advocating for a while now that in many respects what we refer to as b-to-b marketing has always been social network marketing. It has just simply been conducted without the assistance of the wider range of tools and applications that are apparent every new day.
Business decisions are largely made by teams of people who are communicating with each other in the vetting, and consideration and approval process. Now, they're doing it on steroids to the degree that they're going to communicate this way. If we're going to be successful in igniting business decisions, we've got to be able to play in that space.
BtoB: Right. So, Tom, how about your thoughts on the power of social networking going forward?
Stein: I think it's extremely important. Something that's interesting—I just pulled the data out today for this conversation because I was curious—in 2009 we did a brand demand survey of b-to-b marketers. One of the things that we had looked at is what are the kinds of approaches that are being used most frequently in order to build brand and drive demand. And what was interesting to me is that social media has become one of the top three or four. Whether that's aspirational thinking by the respondents and they feel they have to respond that way, I don't know. But I just think it's noteworthy that there's been a very, very significant increase from '09 to 2010-2011; and I think that's going to continue to be the case.
BtoB: Gary, anything to add on social networking?
Slack: Our surveys say the same thing. We did a survey of about 40 senior b-to-b marketers about a year ago and asked them if they were planning to invest a lot more, a little more, a lot less or a little less in 23 different kinds of marketing investments. The first seven (marketing investments that were larger) all were either digital or social media in nature.
Building upon a comment Rick made earlier, I've often looked at everything we do in marketing communications as to create word-of-mouth. It's just in the past we had different tools. These days we have public tools that help us maybe accomplish things faster. But there's no question in my mind that social networking (platforms)—which includes blogging, video sharing, online communities, review sites, LinkedIn, Twitter—are really coming into their own as b-to-b marketing tools to help build awareness and understanding, and generate consideration, purchase interest and sales.
And don't forget mobile, as I'm told 46% of Twitter's 50 million tweets come from mobile devices. And review sites are coming to b-to-b, and Groupon-like sites for b-to-b sales I think are just around the corner. After all, what is Groupon but an aggregated online buying group, a buying co-op where buyers are participants not owners? And finally online communities, especially those that incorporate many of the previously mentioned social media tools, may ultimately be the No. 1 b-to-b social media killer app. Then there is LinkedIn, whose multifaceted potential for b-to-b marketers—at least in my opinion, and they are an agency client—has been barely scratched.