Dr. Andreas Bauer
Board member of the bvik
November: The month that 2020 enters its final phase and many are already preparing for 2021. But what about reflecting on the year that caused so much change? And what do all the experiences of 2020 mean for the future? When it comes to B2B marketing, the future doesn’t look so pessimistic. Almost one in two B2B marketers even assume that marketing budgets will not change. This is the result of the study “Digitalization Push 2020 in B2B Marketing” conducted by bvik – the industry leader for communication & marketing. But what does this mean? What insights can we take away from the Corona pandemic? We talked about this with Dr. Andreas Bauer, a member of the bvik board.
Dr. Bauer, how do you see the developments in B2B marketing throughout 2020?
Well, if you look at the year 2020 as a whole, the corona influence has varied. This year, we conducted two studies: “B2B Marketing Budgets 2020” in the spring (editor’s note March to May) and “Digitization Push 2020 in B2B Marketing” in the summer (editor’s note August/September). If we compare the trends from these studies, we can see that at the beginning of the pandemic, people were thinking much more positively. At that time, two thirds of those responsible for marketing still assumed that Corona would not have any negative effects. In the summer, this figure was just under 50%, but this should not be percieved as negative, as almost half are convinced that their marketing budgets will not change. So there is still a certain amount of optimism.
But a good 50% are not so optimistic. Can you give us figures on how marketing budgets will develop?
We always ask what percentage of the company’s turnover the marketing budget will make up. In 2019 it was still 1% of sales, but for 2020 it is now 0.6%.
And what does this mean for the marketing strategy?
90% of B2B marketers have said that the Corona pandemic has changed their marketing strategy. The online trend in particular will continue. In addition, 85 % of those surveyed have become acquainted with new digital technology as a result of the corona crisis, and they will now stick to using this technology. This applies above to digital communication platforms such as Microsoft Teams, Skype and/or Zoom. Through their use, webinars and digital live communication have been at the forefront, with online advertising, online lead generation and social media also experiencing strong expansion. However, many companies have already done this before with these measures. For them, it was not uncharted territory, but rather relocation of resources and the elimination of face-to-face events. So it is uncertain how this will change when face-to-face events become possible again.
Speaking of the subject. At the beginning of the year, those responsible were still planning a third of their marketing budget for trade fairs and events. What does it look like now?
After studying economics, the business graduate has been working for over 20 years almost exclusively in the field of marketing and corporate management in companies in the capital goods industry. His main focus has been on market research, branding, sales management, controlling and international marketing strategies and instruments. The marketing expert was responsible for marketing in well-known B2B companies such as KUKA AG and most recently as Vice President Marketing at Leistritz AG.
Dr. Andreas Bauer has been a member of the Executive Board of the Bundesverband Industrie Kommunikation e.V. (bvik) since the association was founded in April 2010. He was treasurer of the bvik from its foundation until May 2012.
First of all, I believe that within B2B, in person contact is still essential. Because as soon as the products need to be explained, it’s always via direct sales and that only works through a relationship of trust. Of course, this has also developed further as a result of the surge in digitization: Once the first contact has been made in person and trust has been established, further sales activities are more often transferred to the digital world.
But now back to the question: Trade shows and live events are naturally difficult to plan for the coming year – especially for large, international companies, because countries deal with them differently. But if we now take virtual trade fairs as a starting point, we see two effects: Virtual trade fairs as substitute events are viewed very critically. According to our study, only around a third of people find them good to very good, 17% find them bad. The reasons often read: boring, poorly implemented, cumbersome to operate, live elements are missing, poorly designed. In other words, the expectations are too high. However, if virtual trade fairs are seen as another virtual communication marketplace and not as a substitute event, they are better received. The situation is similar with hybrid events. They are seen to supplement live trade fairs, or rather as an extension of the event, and are very well received.
And what is the reason for the negative perception of virtual trade fairs?
In my opinion, people often try to transfer something analog with its strengths one to one into the digital world – combined with the same expectations. But that does not work! That is exactly the mistake. Because you have to take a different approach and focus on the strengths of the digital, virtual and augmented reality as well as social media. The solution would therefore not be a virtual trade fair, but a different communication offering to complement the live event. For trade fairs, this means that the trend towards digital areas will remain, but that people are currently dissatisfied with purely virtual trade fairs.
Back to planning 2021, can B2B marketers even plan for next year?
Planning is often annual planning, which is too long a horizon in the time we currently live in. Even in the case of companies that are subject to publication requirements and would have to make forecasts, such as stock corporations, these forecasts fail this year.
But plans have to be made because every company has to make sales plans or assumptions. Of course, industrial companies will take into account what we know today and have learned from this year. Running costs, such as personnel costs, are easy to plan, whereas revenues are harder to plan. This means that sales and marketing are planned, but difficultly. With planning next year we have to decouple two things: the marketing budget and the individual activities and measures. While the budget as a whole can be planned relatively well, the individual measures are definitely more difficult to plan, with the cancellation of trade fairs and events shows. Presence measures are currently difficult to plan, but digital activities are easier. Of course, before the pandemic, there were companies that increasingly used digital channels, but Corona shows an even clearer trend towards online marketing. Topics such as social selling, SEA, online campaigns and above all marketing automation are being pushed massively. This will also be the case for 2021!
Which probably brings us to your key facts from the two studies, right? Which learnings do you take forward with you?
Yes, definitely. Social selling, social media use and digital communication in general – both internal and external – have picked up a lot of momentum this year. But regardless of Corona, we can also see the trend for companies to continue to look at customer relationship management. We have already observed this in recent years, but it is now the case that many have established a CRM structure. Now companies have to make a decision: Do I have a CRM structure or do I still work with a customer database? Our experience is that many industrial companies have introduced a real customer relationship management structure in recent years. Therefore it is important to take the next step now: Implement marketing automation and link this with digital communication possibilities and platforms. Because then the marketing activities will all become highly efficient. In this way, marketing can better succeed in making its contribution to the company’s success in the long term and strengthen its position! This must be one of the goals of us B2B marketers.
Dr. Bauer, thank you very much for the interesting insights, explanations and tips for 2021!