Does anyone remember the story of the pin factory? Want to know how it applies to your ABM-informed advertising campaigns?
If you’ve ever studied Economics 101 you’ll probably remember Adam Smith’s analogy of how many inputs and different skill sets went into the optimal production of a simple 18th-century pin.
The basic takeaway was this – in order to most effectively manage processes and outcomes, we need to embrace specialization. Everyone can’t be an expert in every task, at some point, we need to trust that our colleagues or business partners know more about a key aspect of our business than we do. That’s why businesses partner with agencies, vendors, consultants, etc. We focus on our core business that differentiates us and collaborate with others to manage the bits that are important to us, but we know they can do better.
B2B advertising is no different.
First, let’s consider the evolution of digital media spend. In the 1990’s brands started with direct buys on specific sites – the first banner ad was bought by AT&T on HotWired.com in October 1994. This quickly grew into broader buys on sites that catered to obvious themes and contexts. By the early 2000’s we were moving into the ad network world, later that decade saw the dawn of real-time bidding and programmatic. By the 2010’s we were starting to see the concept of account-based advertising take shape that led us to the current evolution of identifying and targeting buying committees.
As the capabilities of programmatic advertising have evolved, there’s been a fork in the road of sorts – B2C targeting (especially with the current growth of direct to consumer brands like Away, Wayfair, Blue Apron, etc) has tended towards direct response and widespread use of third-party segments to amplify and extend a brand’s first-party data. The KPIs are reach and clicks and, for the savvier buyers, downstream post-click behavior that differentiates the value of one user or profile versus others.
B2B advertising on the other hand, and particularly ABM-enabled campaigns, focus on surrounding key decision-makers from very specific accounts with the most appropriate messaging for where they are in the buying cycle, and heavily leveraging the context of what they’re reading for insights on that stage in the funnel. There is no dependence on hit-or-miss third-party segments, we know we are only delivering ads to users from our target accounts based on their IP address and other tag- and cookie-based identifiers. Nor are we optimizing to those consumer outcomes like clicks, likes, etc. We focus on the measurable but gradual insights such as lift and engagement at the account level that validate our campaign strategies in moving our target audiences closer to the desired outcome.
At Demandbase we work with our clients to analyze their account-focused efforts (as distinct from brand spend) across all channels and not surprisingly, the effectiveness of spend using typical B2C approaches such as SEM, agency trading desks and consumer-focused DSPs is much lower than when media spend is completely aligned with the rest of the ABM strategy and data.
The main reasons we see for this performance gap are:
So what is the key takeaway here? We consistently explain to our clients and partners that making the decision to invest in ABM as a key component of your B2B marketing means committing to it end-to-end. From the key building blocks like account identification and selection, content personalization, identifying the business roles and personas in the market for your services to the actual communication of your message programmatically via a DSP built from the ground up to deliver ABM outcomes.
You wouldn’t train six months for a marathon and then run it in stilettoes or dress shoes, so why treat the critical last mile of your ABM investment differently? Trust in specialization and expertise and see it through. Remember the pin factory.