How tech marketers can prove the ROI of brand investment
How to satisfy your colleagues in sales and finance that your brand marketing spend is building the bottom line
06 Minute Read
What’s the most effective way to increase your flow of leads if your buyers are difficult to identify, and reluctant to share their details? For B2B tech marketers grappling with the era of the anonymous buyer, there’s an obvious answer. Unfortunately, it’s not always that easy to act on it.
LinkedIn data shows that the most effective tech businesses for generating leads are those that put the greatest emphasis on brand marketing. They’re able to inspire anonymous buyers at scale, build momentum for their solutions within their target accounts, and start engaging and building familiarity before they reach out for contact details. As a B2B tech marketer, the business case for building brands has never been stronger.
The problem we face is that this business case isn’t easily translated into terms that tend to convince the CFO and the rest of the C-suite. There’s lots of evidence for how brand building drives sustainable, profitable growth for B2B businesses, and tech businesses specifically. Unfortunately though, general evidence for the principle of brand is one thing; evidence that your specific brand campaign is working is another. That’s what colleagues elsewhere in the business demand to see – and it can be tricky to provide in the timescale they expect.
The evidence for investing in brand as a tech marketer
First, let’s look at that general evidence – because it’s pretty compelling. In a recent study for LinkedIn’s B2B Institute, the researchers Les Binet and Peter Field analysed decades of IPA effectiveness data for B2B campaigns. They found that campaigns which deliver on brand metrics have 4x the impact on the business bottom line than those that don’t. They are also more than 50% more likely to move the needle on short term activation metrics like MQLs. In a separate study, we used LinkedIn data to analyse the composition of B2B tech marketing departments and how this correlates with success in generating leads. We found that the 20 businesses that are most effective at achieving lead generation objectives have 71% more of their roles given over to brand marketing.
This evidence is valuable – but by itself, it’s often not enough. The problem is that most digital marketing businesses also want immediate metrics that prove a campaign is working. And if they don’t get it, marketers come under rapid pressure to cut that campaign out of their budgets.
The ROI challenge in tech marketing
In a recent LinkedIn study, 46% of digital marketers revealed that they have budget allocation discussions every month. As a result, 77% of marketers attempt to prove the Return on Investment (ROI) of their marketing campaigns within a month of them running. This is a huge problem for any tech marketer interested in investing in brand – because there’s no way for a piece of brand marketing to deliver a return over that period.
The average B2B sales cycle is six months long, which means that even a highly targeted demand generation campaign is unlikely to deliver a positive impact on the bottom line in just a month. The nature of brand campaigns means that they are even less likely to deliver meaningful impact in that timeframe. As Binet and Field’s analysis of the IPA data shows, brand marketing does its work over the course of several years, and several sales cycles. Its effects accumulate as influential memories build up and a critical mass of potential future buyers are primed to see the brand as their best-bet solution for meeting their future needs. This makes all future demand generation campaigns far more efficient, far more effective, and far more profitable. But it doesn’t do it by the end of the month.
How to change the ROI conversation
If you’re a B2B marketing leader interested in investing in brand, you need to change the ROI conversation in a way that makes it possible for brand to be a part of it. This involves clarifying which metrics actually capture ROI and how to calculate them, then benchmarking the ROI your marketing delivers at the moment so that you can see the impact that brand investments have on it over time. By doing this, you’ll be able to set up meaningful comparisons and KPIs that give you a more immediate sense of brand value – and which you can use to satisfy your stakeholders’ demand for real-time numbers.
Clarifying what Marketing ROI means
Part of the brand ROI challenge comes from a misunderstanding of what ROI metrics look like. The most commonly used metrics for demonstrating ROI are click-through rate (CTR) and cost per click (CPC). These have the advantage of being readily available for those monthly budget discussions. The trouble is, they aren’t really measuring the return of your marketing investment – they’re just measuring the cost. They tell you nothing about whether the clicks that you generated were worth what you paid for them – they just tell you how much you paid.
The only real measure of marketing ROI is the financial return generated by your marketing efforts during the sales cycle, divided by the cost of your marketing investment during the sales cycle. That’s a far more valuable metric for the business to start basing its marketing decisions around. It’s also the type of bottom-line metric that a long-term brand investment will influence over time.
Measuring the impact of brand on ROI
Once you’ve defined what Marketing ROI is, you can then argue for a sensible timeframe over which to calculate it. If your sales cycle is six months then start by calculating ROI for the past six months. Work with sales to look at marketing-attributed bookings, closed-won deals, average deal size and improvements in win rate. If you work back over a few sales cycles, and average out the results, you’ll be able to calculate a meaningful benchmark for the ROI that your marketing delivers currently.
The value of a long-term brand investment comes from raising marketing ROI over the course of several sales cycles. Engaging a broad base of anonymous buyers with memorable brand advertising primes those buyers to respond in greater numbers when you reach out asking for details later. Aiming to provide value before you ask for contact details tends to increase the quality of leads, since buyers are already familiar with your business when they eventually talk to a sales team. These effects enable you to generate leads more cost-efficiently – and they increase the value of the leads that you generate in financial terms. And it’s this impact on ROI that you should be aiming to measure.
The Binet and Field study contains one example of a B2B tech brand doing exactly this. Over the course of a two-year brand campaign, BT Business recorded a significant increase in profitability so that campaign ROI reached 316%. It also recorded a 17% drop in cost per customer acquisition.
Real-time KPIs to reassure colleagues on brand effectiveness
Measuring ROI for brand marketing properly will take time. To buy yourself that time, it helps to be able to point to more immediate numbers that can reassure stakeholders that your brand investment is busy paying its way.
Some of these numbers can come from tracking studies that monitor brand sentiment and brand lift. Others can come from measuring the number of referrals or positive reviews that a business receives, or by using social media listening software to analyse word of mouth. However, the most powerful evidence comes from data that shows the direct impact your brand campaign has on the bottom line.
One option is to compare snapshots of ROI from moments in your marketing calendar that repeat year after year. If you invest in a stand at the same event, or if you always run a lead generation campaign around Black Friday, comparing the ROI that these activities generate to previous years helps to show if a long-term brand campaign is having an impact.
You can also point to KPIs that are influenced by the strength of your brand, but which also have a direct impact on the bottom line. This helps to demonstrate how your brand is increasing the efficiency of your marketing overall. Growth in the volume of branded search demonstrates that your brand is coming to buyers’ minds when they consider a purchase from your category. The proportion of inbound leads that you receive does the same. When you see cost per lead (CPL) and cost per acquisition (CPA) declining consistently over time, you’ve got evidence that brand salience is making the task of your demand generation campaigns a whole lot easier.
Metrics like these won’t give you the complete picture on brand ROI – but they will help to satisfy colleagues’ appetite for real-time numbers that demonstrate that ROI is being generated. They make it clear that a brand marketing strategy is accountable – and can be linked back to the bottom line. In fact, the more you focus on the bottom line, the stronger the case for tech businesses investing in brand becomes.
08 minute read
04 minute read
Explore our booklet: Revealing the Future of Tech Marketing
We reveal how to take the guesswork out of modern B2B tech marketing – and adjust your approach to thrive in the era of the Anonymous Buyer.