In the silver linings department, we have an unlikely development: B2B digital ad spend is leading the charge. The disappearance of in-person events, and a pause in the use of traditional tactics, has led to significant digital growth – especially in the healthcare, tech and financial services categories.
Business-to-business marketers, oft-criticized for being laggards, have sprinted ahead when it comes to digital ad spend, according to new eMarketer findings exclusive to The Drum.
B2B digital ad spend will hit $8.14bn, up 22.6% from 2019. Comparatively, US digital ad spend, as a whole, will only rise 1.7% this year, to $134.66bn.
Long reliant on events and traditional channels, “the conditions of Covid-19 are really forcing B2B marketers to realize that they need to accelerate their transformation into digital,” says Jillian Ryan, eMarketer principal analyst covering B2B and marketing transformation at Insider Intelligence.
Search, virtual event sponsorships, podcasts and spending on LinkedIn are replacing TV, print, out-of-home and in-person events, says Ryan. In fact, LinkedIn will secure a fifth of all B2B ad dollars in 2020. “They are the supreme social network in terms of share.”
However, the surge in these digital platforms and tactics can’t prevent overall US B2B ad spending from plummeting 9.6% to $21.42bn. Nevertheless, eMarketer is bullish for 2021, calling for a 20.4% increase to $25.79bn in B2B ad spending. Digital ad spend is pegged to rise to $9.03bn. “The assumption is that when the world starts to normalize, B2B budgets will start to normalize as well,” says Ryan.
B2B digital healthcare spending in the best shape
Which categories are the heaviest spenders? The healthcare segment is way up (+41.2%) and, well, travel is a different story (-44.5%).
Healthcare will make up 10.4% of all B2B digital ad spending in 2020. “It's interesting to see that the industry that has been so hard hit and impacted by the pandemic, has been the most active. Advertisers have realized that they need to rely on digital channels to get medical supplies and personal protection equipment in front of their buyers,” says Ryan. Other spending bright spots include pharmaceutical, biotech supply chain operations and hospital service companies.
The leader of the B2B spending pack is tech products and services. It makes up 29.6% of all B2B digital ad spend. Up 37.2%, the category will account for $2.41bn in digital ad spend. “They’re really upping their spend, because their products and services are enabling a lot of the digital transformation that we're talking about.”
Financial services are the third largest category, making up 27% of all B2B digital spend. Financial services spend will increase 28% to the tune of $2.2bn.
The only category that truly plummeted is travel. It will fall 44.5% to $304.9m. “Businesses just aren’t going to have their people travel. There’s less reason to advertise. That’s why we are down to nearly 2016 ad spend levels.”
The laptop, not mobile, becomes the hot spot
If you had placed a bet at the beginning of the year on desktop ad spending growing faster than mobile ads – what would the odds have been? A million-to-one? But that’s the case as we are all rooted in our home offices navigating myriad Zoom calls. Year-over-year as of April, there has been a 5.3% uptick in desktop/laptop time spent.
“B2B has always been dependent on desktop, but mobile had been slowly been eroding the share,” says Ryan “This is the first year that mobile is losing share.” Desktop, which includes OTT advertising, will hit $4.92m. Mobile is $3.22bn.
Within this context, what are some of the tactics that are working? Here’s what eMarketer has uncovered:
Search: “As many B2B deals dried up, search has become a really good place to put dollars because it captures intent. You know that you're going to have an active buyer or someone who’s actively looking to educate themselves.”
LinkedIn: “Obviously social media is a big piece of this too. Like search, it was tried and true before the pandemic, but B2Bs are putting a lot more money there. We estimate, roughly, that LinkedIn will secure, roughly, a fifth of all US B2B digital ad dollars in 2020.”
B2B publishers: “They’ve really upped their game to make sure that they’re able to offer bespoke webinars and these virtual paid executions.”
Podcasts: “There was definitely a drop in that at the start of the pandemic, but we’re seeing that listenership starting to normalize.”
What isn’t working as well? The darling of B2B marketers: account-based marketing. “How do you target those people when reverse IP address detection doesn’t work as well as it did when we were all in office? And as you know, cookies are going away. To prepare for this, B2B advertisers should be focused on growing their first-party data set.”
As we head into 2021, B2B marketers will be better equipped for what’s next, says Ryan. Their digital chops will be finely honed to go along with their traditional marketing expertise. “The laggards are diving in and the marketers that were investing are spending more and learning more. It’s all accelerating in a positive way.”
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