Three revolutions are converging but only good marketers will benefit

It’s the year 1517.

You’re a spice merchant in Venice, chilling in your office near the Rialto Bridge, reading the latest pamphlet, hot off the printing press. There’s a lot of informazioni to digest.

Some swashbuckling Spaniards are about to set sail for the ‘New World’. Your childhood friend from Florence continues to rack up rave reviews for his fresco on the ceiling of the Sistine Chapel. And some troublemaker in Germany just nailed some contrarian thought leadership to the doors of a church.

It’s the dawn of a new age – the age of exploration, renaissance and reformation.

One revolution is rare enough, but three revolutions, converging all at once? Mamma mia! What will it mean for your spice business?

OK, now it’s 2024. You’re a B2B marketer in Milan, swivelling in your Herman Miller Aeron chair, scrolling through LinkedIn on your iPhone. You may not know it, but like your great-great-great grandfather, your job is about to be disrupted by three revolutions.

One B2B brand on adopting B2C tactics to drive awareness

1. The B2B revolution

For the past 100 years, the marketing industry has focused primarily on B2C. Breakfast cereals, chocolate bars, dishwashers, SUVs, laptops. We grew these categories into mass markets by pairing commerce (physical availability) with creativity (mental availability).

Coca-Cola may be the finest expression of B2C marketing, having created everything from an iconic bottle to an iconic phrase (‘within arm’s reach of desire’), to an iconic character (Santa Claus). B2B has been the opposite of Coca-Cola. It’s the red-headed step-child of the industry, a ‘niche’ that happens to represent 50% of the global economy.

But not any more. Now the biggest growth opportunity is in B2B.

Cloud computing, CRM, HCM, cybersecurity software, digital workflow solutions – these are the categories of the present and the future. ServiceNow has a bigger market capitalisation than Ford and Ferrari combined. Same for Oracle. Same for Salesforce. Same for SAP.

Cloud computing is a $791bn (£604bn) business, with an expected 20.2% CAGR, according to Gartner.  Soft drinks is a $434bn business, says Grand View Research, with an expected 4.7% CAGR. That’s right, the red-headed step-child is all grown up, and she remembers that you never invited her to Cannes or covered the launch of her new IT infrastructure product.

Clearly B2B is where you need to be. But what will B2B marketing look like in the 21st century? Well, that’s where the other two revolutions come into play.

‘Added complexity’: B2B marketers on drawing a ‘straight line’ between investment and outcome

2. The EBI revolution

If you don’t know what EBI stands for, then sadly you’ve been living under an intellectual rock. And to be clear, most marketers are living under that rock. Instead of reading How Brands Grow, we’ve gorged on bad advice from ‘digital gurus’, who have pushed an adtech and martech agenda that obsesses over capturing demand and gives little thought to creating demand.

Fortunately, the Ehrenberg-Bass Institute (EBI) has ushered in a counter-revolution – a reformation, if you will. Professors Byron Sharp, Jenni Romaniuk, Rachel Kennedy, John Dawes, Nicole Hartnett and their army of PhDs in Adelaide have discovered the ‘laws of growth’, grounded in empirical research and single-source data. EBI has codified the twin pillars of mental and physical availability – supported by trackable metrics – to explain the fundamental principles of marketing effectiveness. When you add in the contributions of luminaries like Mark Ritson, Les Binet and Peter Field, Grace Kite, and Karen Nelson-Field, you get a new B2B playbook for brand-led growth.

Elite B2C marketers have been putting this playbook to work for the past decade. If you reference the Ehrenberg-Bass Institute at elite FMCG firms like Mars and Diageo, you will get head nods. But at most companies, especially in America, you will get blank stares. You might as well reference the Snuffleupagus Institute.

But that’s starting to change.

Last year, the Wall Street Journal wrote about Rao’s, the pasta sauces originally served in a legendary New York City Italian restaurant. Rao’s applied the EBI playbook to grow revenue from $100m in revenue to $580m, and then sold to Campbell’s for a delicious $2.7bn. This was, maybe, the first ever reference to Ehrenberg-Bass thinking in mainstream American news (never mind that the WSJ mistakenly referred to it as “mental awareness”).

And now, the EBI revolution is spilling out of FMCG and into B2B, with more and more firms investing in broadly targeted, category entry point-led advertising that creates a memorable link between a B2B brand and a buying situation. But in the past, implementing Ehrenberg-Bass-style marketing required deep expertise and deep pockets. B2B companies traditionally do not have the buy-in, or the budget. It’s an expensive approach that’s mostly reserved for B2C brands, where the marketing is the business.

Enter the final revolution.

Almost half of B2B marketers find securing investment difficult  

3. The AI revolution

If the EBI revolution is an effectiveness revolution, then the AI revolution is an efficiency revolution. Marketing activities like segmentation, targeting and positioning – the cores of a marketing strategy – can now be done 50 times faster and twice as cheaply. This efficiency revolution is already affecting B2C marketing, but we believe the primary beneficiary will be in B2B.

In general, understanding and reaching the buyer is much more difficult and expensive in B2B. Ultimately, this leads to narrowly targeted marketing with limited reach, primarily focused on existing customers. The empirical evidence suggests this approach favours short-term efficiency and impairs long-term effectiveness.

Fortunately, advances in AI no longer require B2B marketers to choose the long or the short. Instead, AI allows B2B marketers to pair the effectiveness revolution of Ehrenberg-Bass with the efficiency revolution of generative AI. The marketers who are equally fluent in both LLMs (large language models) and NBD (negative binomial distribution, the statistical curve that approximates how many repeat purchases your customers make) will dominate their categories in the B2B Century.

Today, in the early innings of the AI revolution, marketers are focused on what AI can’t do. But as the technology matures, marketers will find out what AI can do. And the truth is that AI, as a general-purpose technology, will be able to do just about anything.

So the real question is not what AI can do – it’s what AI should do. And that’s where properly trained B2B marketers will have a major advantage.

Understanding AI ‘critical’ for B2B marketers to futureproof

Smart marketers vs bad marketers

Take diagnosis, as an example. Rule number one from Ritson is market orientation: put the customer at the centre of your market strategy. But in B2B, the customer is hard to find, and too busy to take surveys. With synthetic data, AI can impersonate any kind of category buyer – we call them ‘impersonas’ – giving B2B marketers access to the customer on demand.

Smart marketers are already starting to augment marketing plans with these ‘silicon samples’. But most marketers, unfortunately, are skipping ahead 10 steps to generate creative without a clear understanding of the customer’s needs.

Alternatively, think about segmentation. AI can divide the market into distinct, targetable segments, and build personas and ‘ideal customer profiles’ to inform B2B marketing and sales activities. But what kind of segmentation will you ask AI to build?

The future belongs to the smart marketers, the B2B marketers who are schooled in Ehrenberg-Bass and have a clear ‘way of marketing’.

Smart marketers will focus on similarities, and ask AI to aggregate different types of buyers together across verticals, markets and functions. Smart marketers know that big segments are worth more money than small segments, and that simplicity offers economies of scale.

Bad marketers will obsess over differences and divide the market into a dozen hyper-niche segments. Bad marketers think complexity is a feature, not a bug, and will end up increasing costs instead of value.

Then there’s positioning. AI can evaluate the relative strengths of a brand against the competition and find ‘demand spaces’ for the brand to grow. Bad marketers will ask AI to triangulate their brand purpose and define their brand personality. Smart marketers know that the purpose of a brand is to increase sales, and that brands compete on mental availability, not perceptual attributes. Smart marketers will ask AI to identify and prioritise the most valuable category entry points, and generate creative briefs grounded in customer needs. Bad marketers, of course, don’t even have creative briefs.

The benefits will continue to compound all the way down the marketing supply chain. Great marketers will use AI to generate finance-friendly marketing plans, flawlessly executed with AI-informed research, AI-generated creative, AI-optimised media, and AI-measured impact. Bad marketers will use AI to build fluffy plans and boring creative, optimised for meaningless clicks.

AI is just a tool, and it’s only as good as the marketer. The AI revolution will be good for everyone – even the bad marketers. If you’re going to do dumb shit, you might as well do it 50 times faster and twice as cheaply. But the future belongs to the smart marketers, the B2B marketers who are schooled in Ehrenberg-Bass and have a clear ‘way of marketing’. Those marketers will implement an ‘AI way of marketing’ that will allow their employers to generate much more revenue at much lower costs and much greater speeds.

B2B. EBI. AI. Eight letters that represent the future of marketing.

Peter Weinberg and Jon Lombardo are the co-founders of Evidenza, an AI company that uses synthetic data to generate finance-friendly marketing plans.