B2B digital advertising spend may end up being the one thing that hasn’t changed much for marketers this year.
Despite all the challenges of 2020, B2B digital advertising is doing great. New research from eMarketer shows that it’s up 22.6% this year.
This substantial increase in ad spend is good news for publishers and ad platforms. But it comes as no surprise for B2B marketers. COVID-19 has made it extremely difficult to hold almost any in-person events for 2020, so many B2B marketers have reallocated some or all of their in-person events budgets into digital channels.
Losing In-Person Events Has Reshaped Many Aspects of B2B Marketing
Not being able to offer in-person events has had many consequences. For one thing, it significantly reduces the face-to-face business interactions marketers used to rely on for relationship building.
The distance also makes it harder for marketers to keep up with industry changes. A study from the 614 Group found that not being able to get to in-person events has also made it difficult for 67.9% of marketers to learn about the latest developments in their industry.
Not having in-person events is even bad for lead generation. That same study found that not being able to attend in-person events has hampered the ability of 64.4% of marketers to meet new business prospects and to generate leads.
Advertising can’t replace all those opportunities for connection, but it can at least keep B2B companies top of mind.
The Effects of More People Staying at Home Has Shifted B2B Buyers’ Behavior
Buyers with more time on their hands can investigate additional marketing channels. That may be why we’re seeing an increased interest in new content formats and new advertising formats.
Instagram Stories, for example, are getting excellent engagement. New research shows they have an 87% completion rate. Visual content marketing formats in general are getting a lot of attention right now, too. It’s not too hard to understand why: Visual content is easier to remember.
B2B content consumption is up overall, across all content formats. New research from PathFactory shows that B2B buyers are increasingly becoming content “bingers.”
B2B Advertising is Doing Well in 2020, Though It’s Growing at About the Same Rate as 2019
While B2B advertising is doing well this year, it is important to take this performance into perspective. A 22.6% increase in ad spend is noteworthy compared to what’s going on in advertising as a whole in 2020, but it is almost the exact amount that B2B advertising grew in 2019. Last year B2B digital ad spend was up 21.6%. This year it’s up 22.6%. If anything, it seems B2B advertising is just holding steady.
What’s noteworthy about this 22.6% growth is how it compares to digital ad spend overall. Global digital ad spend is expected to increase by only 2.4% in 2020.
Even Google and Facebook have seen dramatic drops in growth. According to eMarketer, Google “will suffer a 3.3% loss in ad revenues this year (its first negative result since our tracking began), driven in part by a huge decline in travel-related search queries.” Merkle estimates Google’s year over year ad spend growth was down 11% in Q1 2020.
Facebook didn’t get hit as hard as Google. It is expected to come through 2020 with 5.9% growth.
The difference between Google and Facebook’s growth is reflected in the types of ad spend that have done well or poorly this year. eMarketer estimates that global search ad spend “will decline by 0.2% this year, whereas display spending will increase by 5.3%.” Why display advertising is somewhat outperforming search is not clear. Perhaps people are searching for things less often, but they’re still responding to good ads.
Expectations for B2B Digital Advertising Spend in 2021
Did you notice one other noteworthy thing about the chart at the opening of this article? It’s eMarketer’s prediction for 2021 B2B advertising spend. They say B2B digital ad spend will grow only 10.9% in 2021 – half of what it grew this year.
Why? eMarketer doesn’t address this specifically, but there are clues about why elsewhere. Consider a recent report from MediaRadar: They found that many B2B companies dramatically increased their advertising spend in the first few months of the pandemic, but then cut back on digital advertising during the summer.
According to MediaRadar’s report, B2B software companies increased their digital ad spend by more than 250% during the third week of March. Then they dropped spending back down to 2019 levels by mid-May.
It wasn’t just software companies that spent like this. Industrial companies also increased their digital advertising spend from March through to the end of June.
So perhaps B2B advertising experienced a big boost in ad spend when the pandemic hit, but over time, and into next year, ad budgets may get trimmed. This actually to be expected given that many marketing budgets have been cut or will get cut. Some of those cuts will inevitably come from advertising budgets.
B2B Marketing Isn’t Going to Go Back to What It Was Like in 2019
Here’s another wildcard to throw into all this change: B2B marketing may never go back to what it was in 2019. Many companies have made substantial investments and adjustments for remote work. According to another piece of research from Merkle, its “Customer Engagement Report,” marketers expect many of those changes to be permanent.
That study found “52% of marketers have increased their spending since the COVID-19 outbreak, and 74% have ultimately changed their approach to customer content.” A whopping 96% of respondents believe these new marketing and service innovations will be permanent.
B2B Marketers Have Been Adapting to a Post-COVID-19 World Quickly
Even if B2B advertising spend does drop in 2021, that could be good news for some advertisers. With less competition, innovative B2B marketers may find affordable, effective new ways to reach prospective buyers, whether that’s through advertising optimization, or by using a more multichannel, coordinated approach.
Merkle’s “Customer Engagement Report” backs this up. 50% of marketers in that report said they have tried new marketing technologies or features since the pandemic began. 45% have become more customer-centric in their marketing messaging. 39% have added a new marketing channel. Even B2B ecommerce has changed according to this study: 42% of marketers have developed a new transaction fulfillment capability.
Developments like interactive advertising, including LinkedIn’s conversation ads, have shown promise. B2B social media ads, too, are offering new capabilities all the time. And many account-based marketing programs are becoming sophisticated enough to show hyper-targeted ads precisely enough that only members of each company’s buying team see the ads. If advertising budgets shrink, it’s quite likely that hyper-targeted advertising will be used more often.
It’s also possible we may see not just new tactics, but entire new strategies for B2B advertising. For example, using ads more broadly as a way to better promote strategic content. This is because:
- The outlook for content marketing is quite strong. 78% of marketers saying they have a “strong” commitment to content marketing two years from now.
- One of the biggest problems content marketers have is with no one seeing their content. Advertising is the perfect tool for increasing content visibility.
B2B digital advertising spend may not have changed all that much since 2019, but almost everything else has. The good news is that B2B marketers and their strategies have changed, too. Marketers are proving to be remarkably agile in how they respond to the shifting conditions of 2020. Hopefully, all that agility with carry on into 2021.