B2B Brand Leaders Are Optimistic for a 2021 Pandemic Recovery

THE PANDEMIC has exacted a heavy toll on all our lives, personally and professionally, but if B2B brand and communications leaders are to be believed, there’s some cause for optimism. To butcher Winston Churchill’s quote, we may not be at the end, but we may be approaching the beginning of the end. This is good news for customers.

In February we conducted Forrester Research’s 2021 B2B brand and communications survey, asking brand and marketing leaders a range of questions about their marketing strategies, plans, and activities; we also specifically asked about the impact of the COVID-19 pandemic and resulting economic slowdown. We received more than 200 responses. The results show the pandemic’s significant global impact while also suggesting that the effects varied by company and industry.

Let’s begin with the good news: a majority (55 percent) of B2B brand and marketing leaders expect a return to pre-pandemic business activity before the end of the year. This optimism is also reflected in many other results from the survey and especially in the budget and head count plans for the coming year. For example, a majority of survey respondents expect to increase budgets across digital marketing/website, content marketing, and social media, and there are substantial gains expected in the other budget sectors we track (see figure). A similar increase is projected for head counts. Granted, this data comes from a low base, with most B2B organizations slashing budgets over the last year, but it’s nevertheless clear that continued contractions are unlikely.

This modest but clear optimism translates to much-needed good news for the agency world. Most agency sectors have been battered over the past year, especially advertising. Our data projects that B2B companies will begin reinvesting in their agency partners, especially across digital marketing, content marketing, social media, and advertising. Indeed, the budget and head count increases described earlier are mirrored in the agency investment strategies of many B2B companies, with a clear emphasis on digital-centric activities. This digital focus is not especially new, but the long-standing move to digital has clearly been accelerated by the pandemic.

Another effect that seems to have played out over the past year, and might continue into next year, is what one CMO described to us as the need to “create influence at a distance.” The inability to do in-person events and activities has inevitably shifted marketing priorities to programs and tactics that can effectively and efficiently connect with remote audiences, placing an emphasis on programs like social media or content marketing.

Indeed, the one marketing area that does not seem to be recovering is events. Events are mainstays of many B2B marketing programs and substantial parts of many B2B sales and marketing budgets. In our survey, only a minority of respondents (39 percent) expect to resume in-person events by the end of 2021. In addition, “events” was the only budget category we tracked that showed continued declines in spending, with only 24 percent of respondents anticipating a recovery from last year’s near shutdown of all events.

It’s too early to know if this signals a permanent change to the marketing program mix for B2B companies, or if this is simply a recognition that even with a pandemic recovery, buyers might be slow to regain confidence in attending public events (the survey was conducted in February, just as vaccines were becoming widely available in some countries). As one brand leader at a large technology company commented, the pandemic has resulted in “enforced A/B testing” of a lot of marketing programs, but especially events. The near complete absence of in-person events in 2020 has given marketing leaders the chance to assess if these resource-intensive activities result in any measurable changes in outcomes for businesses, and may encourage a rethinking of priorities going forward.

We know that the effects of the COVID-19 pandemic were not felt evenly across all industries. In our survey, about a third of respondents reported that 2020 revenue had fallen, by up to 25 percent, and that they were adapting by substantially cutting budgets and focusing on immediate revenue opportunities and customer retention. Another 4 percent reported precipitous revenue declines of more than 25 percent. Yet about 60 percent reported revenue growth through 2020 (these were mostly software, technology, and some professional services companies, which were heavily represented in the survey).

Let’s conclude on another optimistic note. During any crisis, the organization’s brand will be tested: Are the values and mission of the company up to the challenge? Will the company’s brand be a guiding North Star through difficult times? Fully 84 percent of the companies we surveyed believe their COVID-19 pandemic response was guided by the brand’s values and purpose, and a remarkable 92 percent are proud of how they responded to the pandemic. In a lot of ways 2020 has awakened organizations to the significance of culture and brand building, and this insight will likely endure. 

Ian Bruce is a research analyst at Forrester Research, where he covers brand and communications strategies for B2B companies.