Friday August 05, 2016
Summer Series: Business As Unusual: The World of Business-To-Business Advertising
*Our Summer Series airs every Saturday at 1:30pm on CBC Radio One.*
This week, we explore the world of business-to-business advertising. It used to be the most boring advertising in the world - where green copywriters cut their teeth, and washed-up copywriters ended their careers. But all that changed when B2B companies dared advertise on the Super Bowl, and showed the marketing world that advertising industrial equipment could be as sexy as advertising a sports car.
Back in 1919, car maker Henry Ford invited Michigan real estate agent Edward J. Kingsford to go on a camping trip.
Kingsford wasn't the only guest on that outing.
Ford had also invited inventor Thomas Edison.
While it was an outdoor camping trip, they were hardly roughing it.
The group travelled in a convoy of six vehicles, complete with chauffeurs and a chef with a fully equipped kitchen truck.
According to the New York Times, Ford had invited the real estate agent along because he wanted to discuss a business deal with him.
The subject… was timber.
Specifically, the timber that grew in Michigan's Upper Peninsula.
See, at the time, Americans were buying more than one million Model T's a year.
Between the frame, wheel spokes, dash and running boards, each car contained about 100 board feet of hardwood.
And Henry Ford wanted to own a hardwood forest and produce his own wood.
Not long after, Edward Kingsford helped Ford buy 313,000 acres of timberland in upper Michigan, where a sawmill and parts plant were soon built.
The mill produced all the wood Ford needed, but it also produced a lot of waste in the form of stumps, branches and sawdust.
When Ford looked down, he saw money lying on the ground.
So he found a chemist who was able to create a pillow-shaped lump of fuel from sawdust and mill waste. He combined it with tar and held it all together with cornstarch.
He called the invention "charcoal briquettes."
Next, Ford contracted Edison's company to design a briquette factory next to the sawmill, and recruited Edward Kingsford to run it.
Soon, Ford was marketing "picnic kits" containing briquettes and portable grills at his dealerships, capitalizing on the link between motoring and outdoor adventure.
After WWII, with suburbia beginning to take hold, backyard barbecuing caught fire. That's when a group of businessmen bought the Ford Charcoal company in 1951, and renamed it after the man who had first run the briquette plant – and that's how Kingsford charcoal briquettes came to be.
Today, backyard barbecuing is one of the great joys of North American weekends.
And it was the result of one business – The Ford Motor Company – doing business with Edward Kingsford Real Estate – then hiring a chemist to create charcoal briquettes – then contracting Thomas Edison's company to build a briquette plant – then hiring Kingsford to run the Ford Charcoal Company – which later became the Kingsford Charcoal Briquette business.
It was a business-to-business-to-business-to-business-to-business success story.
When most people think of marketing, they think of a company advertising its products to the public.
But there exists another entire spectrum of selling the public rarely sees.
And that is the world of business-to-business advertising.
It's a different kind of marketing – because it's not aimed at the general public and it usually involves advertising industrial services and products.
It used to be the most boring advertising in the world.
Then everything changed…
When I started my career in the early '80s, business-to-business advertising was referred to as trade advertising, or industrial advertising.
It was usually where green copywriters cut their teeth, or washed up copywriters ended their careers.
Business-to-business advertising – or B2B advertising as it's now called was sober, serious marketing. It was created to sell business products to purchasing agents within companies. In most cases, the products being advertised were expensive and highly technical. Like industrial machinery, or inventory management systems.
The copy in B2B ads was usually a dry litany of components and specifications. Headlines delivered riveting messages like:
"New vertical sump pump delivers 3,000 gallons per minute!"
Unlike mainstream advertising, the buying cycles in the B2B world are long – meaning it could take a buyer months or years to make a decision.
Most B2B advertising was done in trade magazines, or took the form of brochures and detailed product reports.
A few agencies chose to specialize in B2B, but they were marginalized from the more exciting mainstream agencies. No ambitious ad person ever wanted to work for a B2B agency, and trade ads were even relegated to their own sparsely attended award shows.
B2B stood for boring-to-boring. Humour was seen as wholly inappropriate.
Sexy consumer advertising was never mixed with the brush-cut world of industrial advertising.
Until the day a cowboy met a cat…
Back in 1962, Ross Perot – the same Ross Perot who would run for President 30 years later – borrowed $1,000 from his wife to start a company.
He called that company Electronic Data Systems.
Perot's idea was to provide data management to big companies. By the 1980s, Electronic Data Systems, or EDS as it became known, had become a multi-billion dollar company, servicing contracts with major corporations and the U.S. military.
But when e-commerce exploded in the '90s, EDS began to lose its cache. Feisty new dotcoms were all the rage, and EDS was suddenly seen as a lumbering Old Economy company – anchored in the world of mainframes and single-task terminals.
Problem was this stodgy reputation was undeserved. EDS was still a leader in the industry, but due to its age and size, was perceived to be out of step with the new economy. EDS was no longer being short-listed for e-commerce contracts, and recruiting young tech workers was becoming impossible.
Clearly, EDS needed to rebrand itself. To do that, two things had to happen:
One, it needed press like the Wall Street Journal and New York Times to sit up and pay attention.
And, two, it needed technology decision makers to completely re-evaluate the company.
So in 1999, EDS did something B2B advertisers rarely did up to that time.
It decided to advertise on the Super Bowl.
It was a gutsy move. The number of technology decision makers at Fortune 500 companies probably totaled less than 2,000 people at that time.
The Super Bowl delivers about 100 million people.
So why pay over $3 million for a one-minute Super Bowl commercial when you're only trying to reach 2,000 people?
It appeared to be an outrageously inefficient marketing buy.
But EDS had a plan. It wanted to reach the tech decision makers who didn't watch much television as a rule – but they all watched the Super Bowl.
And more than anything, the company wanted to re-introduce itself to the world. So it bought time on the most epic broadcast of the year, and created an epic commercial.
It was titled, "Cat Herders."
In the technology world, "herding cats" was the perfect metaphor, because success was determined by bringing three unwieldy things together - information, ideas and technology.
The take-away: EDS thrives on defeating complexity.
An estimated $12 million in media mentions, as over 230 news organizations mentioned Cat Herders in their Super Bowl coverage – including the Wall Street Journal and the New York Times.
Super Bowl viewers raved about Cat Herders. Even President Bill Clinton mentioned it in a speech saying that China trying to crack down on the freedom of the Internet, was like the EDS ad where cowboys try to herd cats. "That's the best ad I saw on television last year" said the President.
But the most important thing was the fact EDS sales shot up 20% over the previous year, and new business rose by 40%.
The day after the Super Bowl, hits on the EDS website passed one million for the first time ever. A week later, it topped seven million.
Make no mistake, Cat Herders was a business-to-business commercial. It signaled a brand new day for EDS, and forced potential customers to completely re-evaluate the company.
And EDS did it by breaking the rules of trade advertising.
It wasn't boring or stiff.
It was just one of the best commercials on the Super Bowl.
When EDS surprised viewers with a powerful and creative Super Bowl commercial, it recalibrated the industry's view of what trade advertising could be.
It was a lesson not lost on other companies.
Pssst. Want to buy a $250,000 router?
When Cisco wanted to launch its new ASR9000 router, it devised an extensive business-to-business marketing campaign that included the usual reports, demonstrations and product specification sheets.
But it also included a video posted to YouTube.
It was an unusual video, because it suggested the quarter-million dollar ASR9000 router might make a nice… Valentine's Day gift:
As the marketing director for Cisco said, his company wanted to cut through the business clutter by making customers smile.
Cisco inherently knew that business-to-business purchase decisions are made emotionally, then rationalized with logic and facts.
That's why humour played a critical role in the company's marketing. Humour creates connections. Connections create confidence. Confidence creates trust.
Immediately after the video hit, people who exert sway over the purchase of business products started posting positive feedback about the Cisco video.
Trade publications blogged glowing reviews. The New York Times weighed in with a positive article.
And most importantly, customers started calling for meetings and demonstrations.
The campaign managed to humanize a piece of equipment that usually sits in a dark room at the back of an office, it turned launch day into a launch that lasted weeks by generating ongoing chatter, and it made Cisco feel hip and confident.
It was one of the top five launches in the company's history.
By breaking the B2B rules, the video did the seemingly impossible: It made the ASR9000 Aggregate Services Router… sexy.
Do you remember this moment on Jeopardy:
It was an astounding spectacle to watch. The two best Jeopardy champions ever competing – in real time – against Watson, the IBM supercomputer.
In the end, Watson became the Jeopardy champion of champions.
Ten million people tuned in to watch the show. But what most of those 10 million didn't realize was that Watson's appearance on Jeopardy was a major business-to-business marketing campaign.
IBM had been searching for a mainstream way to sell computers to Fortune 1000 companies.
Jeopardy was the perfect vehicle. It was a highly-rated television show with intelligent content.
Two weeks before the Jeopardy challenge, IBM began its campaign by rolling out 30 short videos on YouTube, explaining how Watson's technology could be applied to various industries. The PBS show Nova was enlisted to air a documentary about Watson the week before the program. IBM collaborated with a BusinessWeek editor on a book about the contest.
Due to Jeopardy's scheduling, there was a month between the taping and the actual airing, so IBM took full advantage of those 30 days to heavily promote the supercomputer – knowing full well Watson was the secret winner.
Once the show aired, IBM attracted enormous attention. The press wrote thousands of articles and young tech recruits inundated IBM with applications. But most importantly, the display of Watson's power inspired B2B clients to imagine how IBM's technology could be applied to their industries. One week after Jeopardy, IBM was swamped by inquiries from corporations, universities and government agencies.
The Jeopardy IBM Challenge may have been entertaining television, but it was one of the most successful B2B campaigns of the decade.
The campaign that most clearly signaled the changing tide in B2B advertising came from the most unlikely source:
The Swedish manufacturer had developed a new line of heavy-duty transport trucks with leading edge technology.
The company wanted to advertise that technology in an unconventional way. So Volvo hired a highly creative Swedish advertising agency.
Eventually, two important insights shaped the thinking: First, truck drivers have an emotional connection to the trucks they drive. Second, a volume of people influenced the buying decision, including families, colleagues and bosses.
Therefore, the advertising had to reach a wide swath of people. So Volvo and its agency planned a viral marketing strategy.
The idea was to create six short films to demonstrate a "live test" of each new truck feature. All were hits on social media.
But it was the last film that became a runaway success.
One of the features on the new Volvo trucks was its Dynamic Steering Technology. In other words, the steering capability was so precise, you could actually drive two Volvo trucks - with trailers attached – at high speed - side-by-side - and they would maintain a perfect two foot gap between them - without deviating a single inch.
To demonstrate that feat, the ad agency hired a celebrity to be in the video.
That celebrity… was Jean-Claude Van Damme.
The limber action hero would turn out to be an inspired choice. Van Damme was well-known around the world, but he wasn't an A-lister anymore. So he wasn't that expensive.
Then they filmed Van Damme doing the most astonishing thing…
It became one of the most watched ads of all time, with over 80 million views.
A staggering number for any commercial – let alone a business-to-business commercial.
The campaign generated over 20,000 news reports around the world – the equivalent of an estimated $170 million dollars of free airtime.
There is no doubt Epic Split got a lot of attention. But the real insight was this:
Volvo wanted experienced drivers – drivers who had seen it all - to be amazed by the precision of the demonstration.
It wanted to communicate intimately to drivers who know – firsthand - how difficult it is to control a tractor-trailer at high speeds.
While the rest of the world watched action star Van Damme doing the splits, truck drivers saw the real star – Volvo's revolutionary steering control.
Surveys done a short time later revealed that half of the truck drivers who watched the ad said they were now more likely to buy a Volvo next time they purchased a truck – and one third of those had already contacted a dealer.
As I've often said, creativity is a powerful business tool. Advertising Age Magazine reported that Volvo spent $3 million to make those films – but generated $175 million in revenue as a result.
It was an epic return on investment.
Business-to-business advertising has come a long, long way.
Back as recently as the 1980s, industrial advertising came in one variety: Industrial-strength boring.
Then all that changed – appropriately – in 1999.
As the centuries clicked over, one insight changed business-to-business advertising forever: B2B buyers are actually more emotionally attached to the brands they purchase than regular consumers are, because they have more to lose.
As the Chief Marketing Officer of General Electric recently said, it's not like buying a pair of pants you can return.
Buying expensive business equipment is a much bigger decision. There's more risk. Make a wrong choice, and a buyer might not just lose credibility, but possibly her job.
So when there is that much stress present in a purchase decision, it pays to frame that choice in human terms.
That means marketing to a person – not a building or a company.
A lesson the business-to-business world has learned from the business-to-consumer world.
It's a seismic shift in marketing. It wasn't long ago that you couldn't pay a young copywriter enough money to work at a B2B advertising agency.
And today, those same copywriters are jealous of an ASR9000 Aggregate Services Router commercial….
…when you're under the influence.