The more I see social media conversations about brand versus demand or ideas like the 95-5 rule, the more I realize that a lack of good, objective data is at the center of these conversations. The conversations are typically spawned by someone or some company that wants marketers to increase their advertising investments or hire someone with expertise in “brand to demand” or some such concept. In other words, they can be seen as self-serving, so are their “findings” and arguments to be trusted?

I did some number crunching, and here’s what I found that can hopefully help B2B marketers objectively decide how to best invest in B2B brand and demand advertising.

The 95-5 Rule Is More Like The 85-15 Variable

To quote the original research, “The 95% figure is not meant to be a precise rule. We’re using it as a heuristic […] ”

Heuristics aside, how many B2B buyers are actually in market at any given time? It turns out that 5% is too low on average across all B2B purchases. For example, according to my findings, which I will limit to the B2B marketing technology categories we track at Forrester for the purposes of this blog:

  • Roughly 20% of B2B organizations, on average, are planning to change their primary B2B marketing technology provider.
  • Of the 20% planning to change, 78% are planning a change within the next 12 months, so that works out to around 15.6% in market each year.
  • There are variations across categories such as account-based marketing platforms (23%), B2B data providers (21%), and B2B customer data platforms (18%).
  • There are also material variations between specific incumbent vendors. For example, one B2B data provider has 15% of its customers planning to replace it while another has 30%.

Key takeaway: Don’t assume that only 5% of your potential buyer audience is in market! Research your market and survey your customers’ buying networks to find out what the actual ratio is (you can generally assume that it’s between 15–30% of your total audience if you’re a B2B marketing technology vendor).

Advertise To Every Target Audience All The Time (If You Can Afford To)

It may seem counterintuitive, but I can objectively recommend after much analysis of B2B advertising that B2B marketers should advertise to all audiences that matter all the time. The best approach is a steady stream of reputation-focused advertising flights mixed with a degree of extra emphasis on demand capture when detected signals indicate more proximity to a purchase for specific audiences.

To estimate your optimal advertising budget, use this formula. First, divide the number of impressions you think you need in each targeted audience by 1,000 and then multiply that by the average cost per mille (CPM) in your advertising mix. For example, if you want to serve 12 impressions per week for 52 weeks to 100,000 people, and your average CPM is expected to be $60 across all individually addressable channels, your estimated budget should be $3,744,000 (62,400,000 impressions divided by 1,000 times $60). And if you are shooting for a ratio of a 4:1 return on marketing investment, for example, you will need to show around $15,000,000 in revenue lift. That would be 150 closed/won sales at a $100,000 average selling price.

Key takeaway: You can advertise to all your audiences some of the time or some of your audiences all of the time. But you’ll be better off if you can advertise to all of your audiences all of the time.

If you are a Forrester client, reach out to schedule a guidance session. I’d love to hear what you think and help you drive engagement with your target audiences and better business outcomes from your brand and demand advertising budgets.