A $US89bn brand you’ve never heard of is bigger than Ford, Ferrari combined: The ad industry, obsessed with old world cool, has failed to follow the money – LinkedIn CEO
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The ad industry is missing the biggest opportunity in front of its nose. B2B brands are quickly outgrowing mature consumer brands, with the likes of ServiceNow way bigger than the likes of Ford and Ferrari combined. LinkedIn CEO Ryan Roslansky told Cannes agency types to start learning how to sell to businesses instead of households. In five years time creative directors will be begging to work on process automation, accounting software and fintech accounts, he suggested, and those currently uncool mega brands need agency smarts. “It’s where the money is going to be.”
What you need to know:
- LinkedIn CEO Ryan Roslansky shared proprietary data from people changing their LinkedIn profile that shows top global talent is flowing into B2B tech companies.
- He told Cannes this is a surefire indicator of where the next wave of growth will come: “Follow the talent”.
- But Roslansky warned the ad industry is failing to also fallow the money – and is in danger of missing huge growth opportunities because it has focused on consumer brands.
- He pointed out that four B2B brands – ServiceNow, Salesforce, Block and Nvidia – are larger by market cap than Nike, Coca-Cola, Adidas and GM combined.
- To tap the growth, ad agencies must first learn how B2B sales and marketing cycles differ from consumer marketing.
- It’s where the big money is headed, said Roslansky, betting that creative directors in five years time will be “begging” to work on B2B brands many today might consider second prize.
If I was going to start an ad agency today, B2B is exactly where I'd go. This is where the creative challenge and the economic opportunity lies. It's where the money is going to be.
Follow the money
At US$89bn ServiceNow has a bigger market cap than Ford and Ferrari combined, yet most people have never heard of it. The ten biggest tech IPOs of last year (Monday.com, Confluent, DigitalOcean, HashiCorp, AppLovin, Roblox, Samsara, Global Foundries, Informatica and SentinelOne) were all B2B pure-plays bar one. Advertising is failing to follow the money and recognise where its future lies, according to LinkedIn CEO Ryan Roslansky. The big growth is not in consumer brands.
Speaking at Cannes, Roslansky, singled out four B2B brands – ServiceNow, Salesforce, Block and Nvidia – that have quickly eclipsed some of the world’s biggest advertisers by value.
“None of these businesses are household names. But these four businesses have a market cap that is greater than Nike, Coca-Cola, Adidas and GM combined. For the advertising industry, these new B2B categories and the businesses like them, that is where the growth is going to come from,” said Roslansky.
In five years time, he suggested, advertising creatives will eschew sexy consumer brands, instead “begging” to work on cloud, fintech and process automation accounts as B2B firms focus on CX and service design – and ramp up brand spend.
Follow the talent
Picking winners among the next breed of tech scale-ups is notoriously hard. But Roslansky said there is one surefire indicator. “Follow the talent.”
He highlighted the top 100 brands by talent inflow on LinkedIn – where its data shows people are taking jobs. “Most of them are privately held B2B businesses. They’re attracting the most desirable and highly valued talent across today's global economy,” said Roslansky.
“Most of them are founded by extremely brilliant tech people who do not [yet] understand the power of creativity or the power of storytelling … So I believe there is huge growth for the advertising industry.”
Re-tool or bust
To unlock that growth, advertising and the media supply chain must learn how B2B sales and marketing cycles operate. It’s much longer term and requires advertisers to convince a far greater number of decision-makers.
“To capture the next generation of 10x growth [companies]… is not going to be easy,” said Roslansky. “Some of the biggest assumptions and ways of working today in the ad industry, you're going to have to adapt. The buying groups you have to get familiar with, develop empathy with and learn to reach and understand … They're not the same people that you sell to right now.”
While the financial markets are piling into B2B companies, “the advertising industry has not yet done a great job of embracing that,” Roslansky added.
Solve limiting factors
The LinkedIn boss thinks the reasons the ad industry is missing the growth opportunity are twofold.
“First, reaching the people who count is much harder. The people who buy a CRM system or HR automation platforms make up a much smaller proportion of the population than people that buy breakfast cereal or car insurance. Traditional mass media channels don't reach them alone efficiently,” he said.
“Also, a lot of people are involved in a B2B buying decision. The brand has to resonate with a whole buying group – and the time profile of buying is way different in B2B, so brands need to build relationships that last over time.”
But Roslansky said there is good news for ad agencies that recognise where the money is headed.
“The options to build these relationships, they're increasing every day. The context of formats and data sets are all getting better, so are the tools and the opportunities.”
The second limiting factor, per Roslansky, is empathy for a different type of buyer.
“The ad industry understands so well how households buy washing powder and breakfast cereal. But you need to learn to understand how IT managers buy CRM software or cyber security systems, understand the issues facing business managers and leaders the way you understand the issues facing households.”
Roslansky said that piece of learning “is going to be big” for the ad industry.
“But it’s worth solving because B2B buyers have massive economic buying power and they make decisions that affect hundreds of millions of people on a single day.”
The LinkedIn chief has a back-up plan if leading the world’s largest social business network doesn’t pan out.
“If I was going to start an ad agency today, B2B is exactly where I'd go," said Roslansky. "This is where the creative challenge and the economic opportunity lies. It's where the money is going to be.”