wiljr.org

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I write about B2B communications, business models and technology behaviors. Thank you for being here. Read more about me here. Register for this site here.

Introduction

I’m not against all digital advertising.

However, when it comes to long-term business-to-business success, our focus should be on building and strengthening relationships.

Spending resources developing and managing relationships will:

• Ensure a closer and faster path to closing deals
• Introduce our teams to qualified prospects
• Build a bigger moat for our organization

Relationships are handshakes. Face-to-face meetings. Dinners. Coffees. Cocktails.

It’s caring and yet not too personal.

Digital advertising is transactional. Cold. Heartless. Demanding.

Berkshire Hathaway

A terrific example of this focus is Berkshire Hathaway.

While we’re out here redesigning websites and building landing pages and implementing advertising “strategies”, here’s what Berkshire Hathaway is doing…

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Yep. That’s it.

In fact, if you go back 20 years and look at their website, not much has changed.

That same Geico message is still sitting there.

What can we learn

If I’m a business selling to other businesses, maybe start with looking at what your digital advertising spend was over the last 12-18 months.

Does that feel right?

Now, maybe break it up into two buckets:

• Corporate (or brand) advertising
• Performance (or lead gen) advertising

We’ll get into the corporate advertising via digital in another article. For now, does the Performance bucket spend seem right?

Just gut-check. Too little? Too much?

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If there’s a conversion stat (of any kind) available, how does that make you feel?

Are any of the digital advertising tactics leading directly to revenue?

If you were to redeploy some/all of those digital advertising funds, what else would you be able to do?

If you’re unable to break out advertising specifically, maybe look at your overall SG&A as a % of total revenue and compare it with other industries.

For example, Berkshire’s SG&A % is 6.5%. If we look at the Financial sector as a benchmark:

The historical median of SG&A expense as a percentage of sales for the finance indusry is 39.71%.

If we compare the top advertising spenders by indusry, we see finance (in 2018) as the fourth most spender.

(My guess is if we were to look at revenue per employee, we’d see even a starker contrast between Berkshire and everyone else.)

Closing

There is a place for digital advertising, however I do not believe it is on the Performance side of the house. For Corporate advertising, our hope is to generate awareness and visibility, two goals that do not directly lead to opportunities or revenue.

Especially those B2B firms with tight marketing/advertising/communications budgets.

Stop squandering money, time and resources on communicating to random onlookers with vague and often irrelevant outcomes.

Build relationships with your current clients and partners. If you’re looking for net-new logos, leverage your relationships to build a referral program.

And tie all those activities back to opportunities generated and downstream revenue.

Thank you

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Sources

• https://www.berkshirehathaway.com
• https://web.archive.org/web/20030211024306/http://berkshirehathaway.com/
• https://www.sec.gov/ix?doc=/Archives/edgar/data/1067983/000095017023004451/brka-20221231.htm
• https://saibooks.com/sga-benchmarks/
• https://www.statista.com/statistics/275506/top-advertising-categories-in-the-us/