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February 1, 2023

Why a Recession Could Save Marketing

How a Recession Could Resurrect a Profession That's Lost its Grip

Recessions happen because the economy needs a reset. Here at Notable, we think B2B marketing as a whole needs a reset too. In this post, we’ll break down: 

  1. Why Today’s Marketers are Lacking Basic Fundamentals 
  2. How Lead Generation is Killing the B2B Marketing Profession
  3. Why a Recession Could Help Rebalance B2B Marketing
  4. Conclusion: Where We Go from Here

Why Today’s Marketers Are Lacking Basic Fundamentals 

Over the last fifteen years following the birth of Facebook, marketing has gone hyper digital as a result of the sheer ability to do so. A new generation of marketers has emerged thanks to the evolution of tracking abilities and the wide-scale adoption of social media platforms that harvest user data and resell it to advertisers. 

The ability to see where customers have been, to target them using detailed consumer data that was never available before, and in effect to place ads with a much higher degree of precision than any traditional advertising format could offer, have all collectively contributed to a generation of marketers who understand the mechanics of performance marketing, while simultaneously lacking basic knowledge of how their customers buy, and what they care about. 

Prior to 2005, marketers were appraised based on:

  • Their understanding of the customer’s needs, and the ability to develop messaging that appeals to prospective buyers, in a voice that resembles the persona of the company 
  • Their ability to develop campaigns – often multichannel – whose results would point to broader metrics indicating awareness, market share, customer satisfaction, and referrals
  • Their creativity, and their ability to use it to execute out-of-the-box ideas that, while perhaps not trackable, were understood to be inherently valuable for the impression they left on a market, and the brand recognition this would garner for a company 
  • Their understanding of the correlative impact between all of the activities above, and their influence on the organization’s revenue, and their ability to discern between which activities would generate a return on investment, and which would not

In short, prior to 2005, marketing was largely seen as the epicenter for creativity and customer advocacy in an organization, the place where a brand came to life. The best marketers were the ones who offered the most unique thinking, who understood how to develop activities that would garner attention while adding value to customers, and who could intuitively trace activities that increased brand awareness back to a company’s revenue growth, albeit often intangibly. 

Bosses understood that not everything could be measured – because at the time, most activities literally could not be – and perhaps even more importantly, they recognized the inherent value of certain activities that made the need for measurement silly, perhaps even a waste of resources.

The entire discipline of marketing changed in 2007 with the launch of Facebook Ads, and the ability to track user behavior – often without their willingness. The ability to track movement on one channel – Facebook – created a false perception that would handcuff marketers for the next decade and a half: the notion that every activity could be measured and attributed to a sale.

2007 changed marketing forever. Since the launch of Facebook ads, marketers have been evaluated on:

  • Their ability to develop automated, mechanized lead generation campaigns designed to extract contact information for the cheapest possible cost, and often, with little to no regard for the propensity of a so-called Lead’s desire to make a purchase
  • The cost efficiency of producing creative assets as cheaply and quickly as possible, in order to rapidly split test them, and then “throw out” those ads which are “not working” – wherein “not working” simply means not immediately resulting in a click or a form fill (irregardless of whether the ad created awareness, or delighted a viewer, neither of which can be measured)
  • Their ability to reduce the expenditure of marketing in the organization overall, while simultaneously increasing the number of “Leads” generated by the department, with little focus on what happens to those “Leads” and how many yield actual revenue. 
  • In practice, driving the lowest Cost-Per-Lead (CPL) and Customer Acquisition Cost (CAC) possible, in order to create higher valuations for venture-backed businesses whose investors look to these key metrics when appraising them for a potential acquisition, with little regard to intangible, immeasurable aspects of marketing, like the strength of a brand. 

Since 2007, non-marketing leaders have taken the ability to track “Conversion Events” on one channel – Facebook – and extrapolated it to mean that every marketing activity, in order to have value, must be measurable and attributable to some direct movement in revenue.

To paint a picture, this fallacy has birthed a generation of companies that are more amenable to spending $1.2 million per year on paid ads to drive traffic to their websites, but are unwilling to spend $250k to redesign their website, because there is no way to objectively quantify the return on investment of converting a digital brick wall into an inviting, highly navigable entryway for customers. The former is seen as a growth driver, whereas the latter is seen as a “cost.”

Nowadays, it often seems like the “best marketers” are those who know how to use dashboards to overwhelm an executive with meaningless metrics, whereas the “worst marketers” are those who are getting burnt out trying to build a data case to sell leadership on common sense practices. It gets worse when marketers at VC-backed companies are left answering to investors and boards who lack even more marketing knowledge than executive leadership.

Why Lead Generation is Killing the B2B Marketing Profession

It is tempting to look at email addresses sourced through performance marketing channels, and to point to these as they get funneled over to sales reps, believing that marketing has done its job and that the department as a whole is functioning effectively.

For most leaders who do not come from a marketing background, the conversation ends at the number of generated leads. The lack of context into how those leads were sourced, and the level of intent they’ve demonstrated with regards to their buying appetite, is the arguably most important part of this picture that is consistently overlooked.

When we do peek behind the curtains, most marketers find smoke and mirrors and are walking on eggshells knowing that the very tactics that are being prescribed to them by their bosses are completely ineffective, despite the fact that manipulating an MQL report can make it seem otherwise.

There are three glaring issues with lead generation that every B2B marketer wishes their bosses would grasp:

1. Direct Response Marketing Doesn’t Work on B2B Buyers

When we say “Direct Response marketing,” we’re describing a type of marketing tactic in which the sole goal is to encourage an immediate response from consumers in order to quickly generate new leads. Most digital marketing strategies that optimize for lead generation fall under the category of Direct Response marketing, since the objective is to get users to either make a purchase, sign up for something, or give away their email address instantly upon seeing an advertisement.

The length and complexity of the B2B buyer’s journey is the very reason why lead generation as a practice is ineffective for B2B companies.  Because Direct Response marketing (which is what Lead Generation is) pairs with the B2B buying journey like oil and water. They’re incompatible. 

There is a commonly restated piece of “wisdom” that marketers like to espouse: 

“B2C or B2B. It’s all the same really, because it’s all B2H.” (Business to Human). 

That sounds nice, but it’s completely false. Let’s break down why.

The Netflix Analogy

To explain the critical differences between B2C and B2B buying processes, let’s look at an example most people will identify with: binge watching a show on Netflix.

Consider the way a single Netflix user decides to watch a season of a new show. 

Maybe they’ve been served a couple ads based on content they’ve already engaged with. Netflix also optimizes the home screen to show similar content. The user might scroll through the suggestions, decide to take a chance on something new, and click “play.” Done. 

And if they get 15 minutes in and they don’t like it, they close out and move on.

And so goes a consumer (B2C) sale:

  • One decision maker to manage/navigate
  • A low enough price point that not much consideration is required
  • Low stakes if the consumer isn’t happy or something goes wrong

Now let’s look at the way a five-person family chooses to watch something together on Netflix. 

First, they need to agree on a time slot that works for everyone. There is likely some negotiation around who sits where in the living room, and about who gets control of the remote. From that point, each person needs to agree about what exactly they’re going to watch together, despite the fact that unique personalities often have very different preferences for plots, character types, and genre. Since they’re committing to an entire season, the debate may be exhaustive, since they don’t want to decide on a show, only to not like it and have to repeat the whole process. And once they make the decision, they need to align schedules to commit to an ongoing time to be together as a family, week after week, to tackle the season in its entirety. 

In either case, the viewer(s) might be committing to an entire season of viewing, but for the lone viewer, this can be a spontaneous event. For a family of five, every aspect of the viewing involves some level of negotiation, from scheduling the time to agreeing about the volume level. 

And so goes the B2B sale:

  • A group of decision makers, with:
  • Diverse personalities 
  • Preferences that can be hard to understand or anticipate
  • Different levels of decision-making power
  • Multiple different schedules to coordinate
  • Higher stakes in the case that something goes wrong
  • More negotiation and diligence to avoid something going wrong

B2B sales parallels the family in the Netflix analogy. 

B2B marketers don’t need to penetrate the barrier of just one person, but rather an entire group. The procurement of a $100k SaaS contract or $250k consulting engagement system doesn’t happen on a whim the way that the decision to try a new shampoo can. And offering 10% has the exact opposite effect on a B2B buyer than it would a B2C buyer. Instead of exciting them, it makes them think the brand is less valuable, and perhaps even desperate for a sale – a red flag for a partner that you’ll be resting the success of a critical business outcome on.

2. Form Fills Don’t Equate to Purchase Intent (like, at all)

The False Parallel of the Linear “Purchase Funnel” of Consumer Brands

It’s important to understand that lead generation as we know it today came from consumer marketing. Facebook – a consumer application – gained notoriety with its ad platform, mainly from eCommerce brands and home services businesses (think window washers, landscapers, etc.) that could leverage Facebook’s data on user’s personal (demographic) information, to place ads in front of them.

The assumption was this:

Place an ad with an Offer (e.g. 10% off) → User Clicks → User Purchases → instant ROI

While slightly oversimplified, this generally describes the flow of lead generation campaigns for consumer/eCommerce brands. And the appeal is the fact that with a single campaign, you have straight-line visibility (thanks to integrations with online payment processors like WooCommerce or Shopify) into how much revenue your ad generated in proportion to the ad spend, instantly removing any question of subjectivity as to whether a paid ad campaign was working.

How B2B Marketers Started Adopting “Funnel Marketing”

Simply put, total clarity into campaign performance, and the ability to attribute campaigns instantly to top line revenue, is what has made lead generation so appealing to B2C brands.

It’s also this same appeal that led B2B marketers to try and adopt the same practices, so that the same level of visibility into marketing’s efficacy could also be achieved for the sale of managed services, software, consulting, and other B2B offerings. 

To do this, B2B marketers simply took the same “funnel” above, but modified it slightly:

Promote eBook/Webinar → User Clicks → Require Email to Access→ Send Email to Sales Rep 

By ripping off the same linear “funnel” strategy used by consumer brand marketers, B2B marketers were praised for being “growth hackers,” and developed incredibly cunning and effective ways to get users to fork over their email addresses, including tactics like:

  • Gating content/whitepaper/PDF downloads with a form
  • Requiring contact information to reveal pricing on a website
  • Making Webinars accessible only to those who register with their email

The Elephant in the Room: Completing a Form Doesn’t Equate to Intent

In fact, oftentimes, it’s the exact opposite. Gating content in lead generation campaigns is a notorious cause for flawed campaign data, due to the fact that users who want to – for example – access a piece of content, but have no interest in buying from you, will go as far as to put a fake email address in the form, just to get through the gate and be redirected to the content they’re looking for.

This highlights a much more important reality of the B2B buyer journey, which is the fact that B2B buyers do extensive self-guided research while looking for solutions. According to a study by Martech, B2B buyers consume an average of 13 content pieces – the majority of which come directly from the vendor on their website, social, or email – before deciding on a vendor.

The Bottom Line: Lead Generation Alone Can be Counterintuitive

In the case of Martech’s study, we can conclude that providing content to prospects directly influences the likelihood of a positive purchase decision. Yet, marketers who are assessed on the number of leads generated are incentivized to put forms in front of their content so they can measure how many emails are gathered. While this may make their bosses happier, it adds friction to the buying experience that repels the buyer, and likely pushes them to find the answer to their query elsewhere, from a competitor who is sharing that knowledge freely.

This is a prime example of the inadvertent damage that can come from forcing B2B marketers into lead generation tactics for no other purpose than ability to measure.

Paid Advertising is Becoming Increasingly Less Effective

In another blog, we talk about how cheap ads were what originally drew marketers to digital advertising and lead generation. What’s important to understand is that what drove digital advertising costs down – in addition to the absence of “hard costs” like magazine or billboard printing – was namely the accuracy and precision of the ad placements, which was a direct result of how much consumer data was being gathered by platforms like Facebook.

However, ever since the Cambridge Analytica scandal of 2018, the accuracy of paid advertising has been on a steady decline due to the emergence of legislation restricting data collection, and the consequent impact this has had on the precision of digital ad networks. 

Since 2018, a number of events have taken place indicating that data privacy is becoming increasingly more regulated:

The bottom line is that the ability to track users is becoming increasingly more difficult, which in time, will continue to have a negative impact on the performance of paid media channels that rely on the collection of consumer data to accurately place ads. While this may be several years out, the events above are just some of the many indicators that banking on paid lead generation campaigns as a sole tactic for customer acquisition is not a sustainable way to grow.

How Will A Recession Help B2B Marketing? 

Rebalancing Budgets = a Rebalancing of Performance & Brand Marketing

Shutting off paid ad spend will reveal how often it doesn’t work.

When marketing teams are slashing budgets, it usually goes something like this:

  1. Personnel → unfortunate, but necessary in bloated teams that are underutilized
  2. Martech → an easy way to cut gadgets that are not operationally necessary
  3. Ad Spend → companies can instantly save 6-7+ figures a year, with no layoffs needed

We anticipate that teams are going to be aggressive about #3, cutting paid ad spend (the force behind most lead generation campaigns), due to the fact that (a) paid ad campaigns are perpetual cash burners that build no equity and stop generating value as soon as you stop paying (unlike brand marketing investments like organic content), and that (b) they take personnel to manage and optimize on a daily basis, meanwhile teams are shrinking.

And our hypothesis is simple:

As soon as companies kill their paid lead generation campaigns, they’re going to quickly deduce that they were never working in the first place, because their volume of qualified opportunities is going to remain minimally affected if not totally unchanged. 

In fact, in the two months since posting this, we’ve already started to see companies validating this hypothesis after severely reducing or eliminating their paid ad spend:

Budget reallocation will open the door for tactical shifts that align to today’s B2B buyer.

Naturally, as paid media budgets are reduced, resources will begin to free up. To quantify this:

  • An early company spending $15k/mo on AdWords will recoup $180k/year
  • A growth-stage company spending $50k/mo on AdWords will recoup $600k/year
  • Enterprises spending on AdWords may free up resources in excess of $1M/year

These are not at all small sums, and for companies that have been fighting to get their leadership teams to approve a budget for brand marketing programs, now is the time to be thinking about what to introduce as an alternative come the inevitable moment in which leaders realize it’s not sustainable to reduce marketing investment forever, but that it also doesn’t make sense to be as aggressive with paid media anymore.

When this moment comes, this is the time to propose new alternatives like:

  • Series-based educational content on YouTube, that can also be turned into blogs
  • Zero-Click, short-form video content for LinkedIn and YouTube shorts
  • In-feed, paid social campaigns as a native, contextually-relevant way to boost content using ads
  • Zero-Click email newsletters that function like a periodical and offer a unique POV
  • Building a Content Hub to catalog your best content for prospects to find (Example)
  • Pitching for placement on other people’s podcasts, and repurposing the content
  • Developing educational collateral like industry guides and tactical How To’s

Overall, we’ve learned from Gartner, Forrester, and dozens of others that we’re observing a massive shift post-COVID from facilitating customer acquisition to enabling buyer discovery, and when budgets for traditional customer acquisition plays like lead generation are being cut, the time has never been more ripe for the introduction of new tactics that will enable buyers to find your solution in what we know is an increasingly democratized, self-guided research journey facilitate by buyers, not led by sales reps.

Real, Principled Marketers Will Rise to the Top

Marketers who can defend their craft and educate executives will elevate into leadership roles

Pitching leadership on content-led growth (CLG) and other brand-driven marketing initiatives – especially those that do not follow a logical train of attribution that many leaders have grown accustomed to demanding in the Facebook era – and expecting instant buy-in from leadership is not a realistic approach. Marketing leadership needs to be prepared to educate the C-Suite and investors.

“Content/brand is inherently valuable” not only will not fly, but it is not always true.

Brand marketing efforts like content development are ineffective without a robust understanding of:

  1. Distribution – how to actually ensure your content gets seen, and the value is realized
  2. Performance – what signals indicate movement in the buyer journey, in the absence of the MQL

A marketer who is prepared to lead the function will meet the objection of a C-Suite leader or investor with excitement to educate them on exactly what metrics indicate that content strategy is proving to be effective. They also need to be prepared to defend the timelines required for content and brand marketing initiatives to season, which generally takes a minimum of 6 months, and consistent activity over the course of that duration. 

The best marketers will not view objections from leadership as a nuisance, but rather an executive’s natural and responsible recoil in response to a time of economic turbulence. Rather than avoiding these conversations, this is a time to be actively preparing for the opportunity to educate leadership on the new frontier of B2B marketing in a post-COVID, knowledge-democratized world, and to do so in a way that contextualizes proposed marketing activities to the matters most important to leadership.

Budget constraints will set the most creative, resourceful marketers apart.

Budgets will not reappear overnight for most companies. 

This is a good thing. The time is well overdue to trim fat in the B2B marketing mix.

For the last ten years, as marketing has been rapidly disrupted by the emergence of new technology, arguably no other profession has been as prone to “shiny object syndrome” as ours. The combination of well-resourced marketers looking to try new things, and excited CEOs who want to dabble in every medium in existence, has led many marketers into a state of mass distraction, where time and energy has been committed to just about everything other than the things we know actually work.

From joining Clubhouse to starting podcasts we couldn’t keep up for more than four episodes, we’ve learned a few lessons again and again, and now has never been a greater time to adopt them:

  1. Less is more – you do not need to and should not be on every channel, even if your competitor is.
  1. Quality over Quantity – focus on owning 1-2 channels well, then expanding. Half-assing five channels dilutes your brand. If your boss measures you on the quantity of deliverables produced by marketing, use this time to correct expectations. Do you want to be Ford or Ferrari?
  1. Start with Why – if you don’t have a strategy for the channel, including a very clear idea of who is using it, then don’t start. Aimless creation has a degenerative effect on a brand’s equity.

If you are a resource-constrained marketing leader today, and you’ve just lost a combination of budget and headcount, rather than be overwhelmed, my suggestion is to trade overwhelm for focus, to cut things that aren’t clearly working, and to build an internal case study for what does, so that when your budget and headcount returns, you can add fuel to an already refined engine. 

Marketing generalists who understand strategy will see a rapid increase in appraisal.

For a long time, marketers have been pushed to specialize as the profession has grown more complex. 

However, I think we’re about to see a rapid inversion in appraisal from specialists to strategic generalists.

A specialist:

  • Excels at 1-2 very specific skill sets, such as writing blogs or running Google AdWords campaigns
  • Has knowledge that is largely platform or medium-dependent
  • Is subject to disruption in the case that their platform or medium changes, or becomes obsolete
  • Is at a higher risk now more than ever, for the above to occur, especially with generative AI

A strategic generalist:

  • Understands the business strategy first and foremost, and how to mold initiatives to it
  • Excels at designing workstreams to manage/integrate multiple processes to form a program
  • Is deeply familiar with and abreast to platform best-practices, but not a specialist
  • Is a highly effective manager of people and processes, able to align and develop the two 
  • Has an auditor mindset, knows how to ask the questions that executives will ask
  • Is agile, more of a systems thinker than a linear practitioner, and can quickly change gears

For the last decade, many generalists have been made to feel like they’re losing their edge – like a deep understanding of customer psychology and industry nuance have been losing relevance to one-off skill sets that are in-demand for a time. In the wake of generative AI and the everything-as-a-service economy, I see the true hero of the marketing organization becoming the one who understands the customer and the industry first and foremost, who is technically fluent, and can infuse deeply human insight into the multiple workflow and practitioners – some human, some not – that form an increasingly more mechanized and technology-enabled (for better or for worse) marketing aggregate.

Conclusion: Where We Go from Here

My Plea to Marketers

Embrace the changes ahead. 

Growth is going to be an imperative moving forward, and rather than looking at this like an obstacle, this could be the catalyst we’ve been waiting for to reveal the long term inefficacy of marketing initiatives designed solely to extract contact information, to automate customer interaction at the expense of their annoyance, and not to simply make the customer the champion of our companies’ existences. 

When paid ads and lead generation efforts start to sunset – a byproduct of reduced ad spend and heightening data privacy laws – what will emerge is the space to try new things, using the objective of customer education and value provision as your central litmus test for whether or not to invest.

Generative AI is happening, whether we like it or not. A lot of line level duties are going to be disrupted and automated, which, in my belief, is going to do two things, both of which could yield immense value for the marketing profession:

  1. First, the commoditization of low-level duties is going to place more value on marketing roles and responsibilities that are higher up the intellectual and emotional food pyramid than the type of work many marketing leaders have been burdened by over the past two decades. Humanity – your customer – is always changing, and the best-equipped navigator of a changing buyer is a fellow human that can relate to them. While marketing operations has seemed to take precedence over basic brand fundamentals over the last two decades, I believe we’re on the precipice of an overdue reversal, and this is a chance to lean into what customers want and need now more than ever, so we can leverage technology to modify our messaging, offerings, and programs more quickly. 
  1. As technology continues to evolve, the role of a senior marketer is going to be much less of a tactical manager than it is a program manager and creative R&D leader. The speed at which existing technology is changing and new technology is being released will demand a new level of agility, and the ability for a senior marketing leader to confidently be the least skilled tactician in the room, while simultaneously having the marketing team look to them as the senior most steward of the brand, and the Rosetta stone to customers’ most challenging needs and pain points. 

If you are threatened by change, this will be a very difficult transition, but if you’re willing to reframe your mind, to open it to the possibility of finding comfort in this constant evolution, than there is room for immense confidence and excitement to emerge and displace the burnout that has defined many B2B marketing professionals jobs as of late.

My Plea to Executives

Let marketers do their job, and give them the breathing room they need to do it effectively – and to fail.

If we continue to operate as we have for the last decade and a half – where everyone with a Facebook account assumes they know as much about marketing as those studying it 40 hours a week – during a time in which our profession is bracing for turbulence unseen on this scale before, I foresee marketing facing a similar exodus to that which we have seen with educators who left the profession during the pandemic.

If we continue to treat principled, strategic marketers as expendable, assume their efforts are not working and label them as a cost center (as opposed to acknowledging the fact that brand quite literally lives on the balance sheet vis-a-vis Goodwill, and is an appreciable asset), and attempt to conflate recent college graduates with masters of the marketing profession because they are neurologically addicted to six-second TikTok videos, and thus somehow capable of doing a seasoned marketer’s job, then we are going to witness a mass departure of the best marketing professionals in the world. 

Those who still possess a deep intuitive understanding of human psychology and what motivates people – the raw ingredients that used to define our profession’s most cherished talent – will likely pursue careers in clinical therapy or life coaching, so they can capitalize on one of the few remaining markets that values such a skillset still, offering it to those who are struggling to make sense of a world that seems to prioritize automation and efficiency over the essence of the human experience and creation, in every domain.

On the flip side of this are the CEOs and leaders who recognize the emerging monoculture of companies and brands, and who know deep down what the heart yearns for – humanity. For those leaders who double down on the thing that’s never failed us – our humanity – and who recognize the brand leaders who are deeply in touch with that aspect of themselves and others, in this insight they’ll find the key to building a brand that reflects the humanity and flavor of your organization externally, that ignites that spirit in others, and that attracts the talent and patrons who you feel excited to continue on this journey we call life, alongside of. 

We’re either on a rapid journey to monoculture, or at the beginning of a long road home to common sense. I like to believe it’s the latter, and in any case, that starts with the heart. So why not hedge your bets there?

About the author

Sam Malik

Sam is the Founder & CEO of Notable

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