Marketing as a business function has undergone profound change over the past decade, with ever-more sophisticated technologies, platforms, data analytics, and content options creating a powerful opportunity set for firms and the marketing agencies that support them.
Much of this focus – and growth – has been in the B2C space, with businesses using hi-tech, highly developed processes to engage with key consumer audiences, even at the one-to-one level. Agencies that have been able to pivot their proposition to reflect these trends have themselves seen strong growth, increased revenues and soaring valuations.
Many of Livingbridge’s own B2C portfolio companies have benefitted from such agency support and technical know-how. We have first-hand experience of the influence and results these firms can deliver.
In contrast, B2B marketing has, historically, been more challenging due to a traditional relationship focus, longer sales cycles and more complex decision making.
Traditional B2B marketing strategies – such as face-to-face meetings, trade shows and straight cold-calling– are notoriously inefficient, particularly since Covid-19 impacted travel and social interactions. In the wake of GDPR, these challenges are exacerbated further due to increasing complexity in digital marketing through strengthened privacy laws, the removal of cookies and restrictions in mobile tracking.
In fact, the pandemic acted as a bit of a catalyst: stakeholders were forced to adopt more digital processes and lead generation techniques to reach key audiences. And what they found is that, done correctly, it could deliver a stronger return on investment vs traditional methods.
Agencies are taking note of these trend. We have seen a rush as both established players and new entrants strive to build the most compelling B2B service propositions.
Indeed, the UK has become a world leader in this fast-growing sector, with a highly attractive B2B marcomms industry with world-leading capabilities. It has become a dynamic, fast-evolving and even aggressive sector, in which the leading firms with the right products, ideas and critical mass are attracting more and more clients.
Livingbridge is a highly active investor in the marketing services sector – and we are keen to talk to founders and CEOs of agencies looking to find a partner who can bring valuable experience and expertise to the table. We have a dedicated, differentiated approach, helping firms to expand internationally, benefit from M&A, or add new service and product cross-selling capabilities onto their core propositions.
Brainlabs is a good example of our approach in the space. We bought a minority stake in Brainlabs in 2019. Since then, the firm has tripled in size, partly through acquisition, going from about 200 to over 800 people. Most of Brainlabs’ revenue is now split roughly equally between its UK home market and the US, with APAC being its fastest-growing region.
We are actively looking to invest in B2B marketing businesses given the strong and highly attractive fundamentals driving the sector. We are interested in talking to founders and CEOs share our view of the market and want to take their business to the next level – whether that’s expanding into new markets or making strategic acquisitions.
In particular, we love businesses that have a ‘full funnel’ strategy and are seeing to build an end-to-end proposition in the space. Full funnel visibility allows agencies to better understand which campaigns are working and why – allowing marketing strategies to be iterated to optimise return on ad spend.
The challenge for some firms is the speed at which the market is evolving. Many well-run businesses could miss out on growth and new client opportunities as rivals seize the initiative – we are seeing an acceleration of buy and build strategies in the space. Many CEOs are also worried about spending and return on investment, hiring the wrong senior talent or the innate difficulties – and costs – of expanding into markets such as the US, with a natural fear of getting things wrong.
We are very well positioned to help firms evaluate the environment and capitalise on what has become a really exciting industry.