Under the Influence with Terry O'Reilly - S5E15 - Business As Unusual: The World of B2B Advertising

Episode Date: April 15, 2016

In this show, we explore the world of business-to-business advertising. It used to be the most boring advertising in the world - where green copywriters cut their teeth, and washed-up copywriters ended their careers. But all that changed when B2B companies dared advertise on the Super Bowl, and showed the marketing world that advertising industrial equipment could be as sexy as advertising a sports car. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. From the Under the Influence digital box set, this episode is from Season 5, 2016. You're so king in it. Scores of it in an instant. Your teeth look whiter than noon, noon, noon. You're not you when you're hungry. You're in good hands with Austin.

You're under the influence with Terry O'Reilly. Back in 1919, carmaker Henry Ford invited Michigan real estate agent Edward J. Kingsford to go on a camping trip. Kingsford wasn't the only guest on that outing. Ford had also invited inventor Thomas Edison and tire mogul Harvey Firestone. While it was an outdoor camping trip, they were hardly roughing it. The group traveled in a convoy of six vehicles, complete with chauffeurs and a chef with a fully equipped kitchen truck. According to the New York Times, Ford had invited the real estate agent along because he wanted to discuss a business deal with him. The subject was timber.

Specifically, the timber that grew in Michigan's Upper Peninsula. See, at the time, Americans were buying more than one million Model Ts a year. Between the frame, wheel spokes, dash, and running boards, each car contained about 100 board feet of hardwood. And Henry Ford wanted to own a hardwood forest and produce his own wood. Not long after, Edward Kingsford helped Ford buy 313,000

acres of timberland in Upper Michigan, where a sawmill and parts plant were soon built. The mill produced all the wood Ford needed, but it also produced a lot of waste in the form of stumps, branches, and sawdust. When Ford looked down, he saw money lying on the ground.

So he found a chemist who was able to create a pillow-shaped lump of fuel from sawdust and mill waste. He combined it with tar and held it all together with cornstarch. He called the invention charcoal briquettes. Next, Ford contracted Edison's company to design a briquette factory next to the sawmill and recruited Edward Kingsford to run it. Soon, Ford was marketing picnic kits containing briquettes and portable grills at his dealerships, capitalizing on the link between motoring and outdoor adventure.

The Depression soon put a kink in the idea of barbecuing, but after World War II, with suburbia beginning to take hold, backyard barbecuing caught fire. That's when a group of businessmen bought the Ford Charcoal Company in 1951 and renamed it after the man who had first run the briquette plant. And that's how Kingsford Charcoal Briquettes came to be. Today, backyard barbecuing is one of the great joys of North American weekends. And it was the result of one business,

the Ford Motor Company, doing business with Edward Kingsford Real Estate, then hiring a chemist to create charcoal briquettes, then contracting Thomas Edison's company to build a briquette plant, then hiring Kingsford to run the Ford Charcoal Company, which later became the Kingsford Charcoal Briquette Business. It was a business-to-business-to-business-to-business-to-business success story. When most people think of marketing,

they think of a company advertising its products to the public. But there exists another entire spectrum of selling the public rarely sees. And that is the world of business-to-business advertising. Thousands of companies only exist to sell their products to other companies. It's a different kind of marketing because it's not aimed at the general public and it usually involves advertising industrial products, technical specifications or back-end data management. It used to be the most boring advertising in the world. Then everything changed. changed when I started my career in the early eighties business-to-business advertising was referred to as trade advertising or industrial advertising.

It was usually where green copywriters cut their teeth or washed-up copywriters ended their careers. Business-to-business advertising, or B2B advertising as it's now called, was regarded as one of the lower forms of marketing. It was sober, serious advertising. It was created to sell business products to purchasing agents within companies. In most cases, the products being advertised were expensive and highly technical, like industrial machinery or heavy-duty vehicles or inventory management systems. The copy in B2B ads was usually a dry litany of components and specifications. Headlines delivered riveting messages like, New vertical sump pump delivers 3,000 gallons per minute!

Exclamation mark. Unlike mainstream advertising, the buying cycles in the B2B world are long, meaning the decision time for a company to purchase industrial products or to switch suppliers could take months, if not years. So, it was a solemn, patient exercise in the pursuit of sales. Most B2B advertising was done in trade magazines, or took the form of brochures and detailed product reports.

A few agencies chose to specialize in B2B, but they were marginalized from the more exciting mainstream agencies. No ambitious ad person ever wanted to work for a B2B agency, and trade ads were even relegated to their own sparsely attended award shows. B2B stood for boring to boring. Humor was seen as toxic, damaging, and inappropriate. Sexy consumer advertising was never mixed

with the brush-cut world of industrial advertising. Until the day a cowboy met a cat. Back in 1962, Ross Perot, the same Ross Perot who would run for president 30 years later, borrowed $1,000 from his wife to start a company. He called that company Electronic Data Systems. Perot's idea was to provide data management to big companies. By the 1980s, Electronic Data Systems, or EDS as it became known, had become a multi-billion dollar company with 40,000 employees in 21 countries, servicing contracts with

major corporations and the U.S. military. But when e-commerce exploded in the 90s, EDS began to lose its cachet. Feisty new dot-coms were all the rage, and EDS was suddenly seen as a lumbering old economy company anchored in the world of mainframes and single-task terminals. None of which was cool. Problem was this stodgy reputation was undeserved. EDS was still a leader in the industry, but due to its age and size,

was perceived to be out of step with the new economy. EDS was no longer getting shortlisted for e-commerce contracts, and young tech workers were no longer applying to the company. Clearly, EDS needed to rebrand itself. To do that, three things had to happen. One, it needed press like the Wall Street Journal and New York Times to sit up and pay attention. Two, it needed technology decision makers to reconsider EDS for major tech contracts. And three, it needed its own employees to feel proud to work for the company.

So, in 1999, EDS did something B2B advertisers rarely did up to that time. It decided to advertise on the Super Bowl. It was a gutsy move. The number of technology decision makers at Fortune 500 companies probably totaled less than 2,000 people at that time. The Super Bowl delivers about 100 million people.

So why pay over $3 million for a one-minute Super Bowl commercial when you're only trying to reach 2,000 people? By typical marketing calculations, it seemed to be an outrageously inefficient

media buy. But EDS had a plan. It wanted to reach the tech decision makers who didn't watch much television as a rule, but they all watched the Super Bowl. EDS also wanted to wow the press. And more than anything, the company wanted to reintroduce itself to the world. So it bought time on the most epic broadcast of the year and created an epic commercial. It was titled, Cat Herders. This man right here is my great-grandfather. He was the first cat herder in our family.

The commercial showed cowboys riding the open plains. Herding cats. Don't let anybody tell you it's easy. Anybody can hurt cattle. Holding together 10,000 half-wild short hairs, that's another thing altogether. Being a cat herder is probably about the toughest thing I think I've ever done. It was shot like a magnificent western.

The rugged cowpokes riding their horses while herding, not cattle, but hundreds of cats over majestic prairies and flowing rivers. It ain't an easy job, but when you bring a herd into town and you ain't lost a one of them, ain't a feeling like it in the world. Even though it was played perfectly straight, there were some quick funny moments. One showed a cowboy using a lint roller on his vest.

Another showed a cowboy on his horse sneezing. One line in particular articulated the underlying idea of the commercial. I'm living a dream. Not everyone can do what we do. In the technology world, herding cats was the perfect metaphor. Because success was determined by bringing three unwieldy things together. Information, ideas, and technology. EDS, managing the complexities of the digital economy. The takeaway? EDS thrives on defeating complexity.

The result? An estimated $12 million in media mentions, as over 230 news organizations mentioned cat herders in their Super Bowl coverage, including the Wall Street Journal and the New York Times. Super Bowl viewers raved about cat herders. Even President Clinton mentioned it in a speech shortly after the game, saying that China trying to crack down on the freedom of the Internet was like the EDS ad where cowboys try to herd cats. That's the best ad I saw on television last year, said the president.

But the most important thing was the fact EDS sales shot up 20% over the previous year and new business rose by 40%. The day after the Super Bowl, hits on the EDS website passed 1 million for the first time ever. A week later, it topped 7 million. Make no mistake, Cat Herders was a business-to-business commercial. It signaled a brand new day for EDS and forced potential customers to completely re-evaluate the company. And EDS

did it by breaking the rules of trade advertising. It wasn't boring or stiff. It was just one of the best commercials on the Super Bowl. When EDS surprised viewers with a powerful and creative Super Bowl commercial, it recalibrated the industry's view of what trade advertising could be. It demonstrated that CEOs and IT officers didn't base their decisions solely on specifications documents and technical manuals, but on emotion too. It was a lesson not lost on other companies.

We'll be right back to our show. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe, Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it.

Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. Psst. You want to buy a $250,000 router? When Cisco wanted to launch its new ASR 9000 router, it devised an extensive business-to-business marketing campaign that included the usual reports, demonstrations, and product specification sheets.

But it also included a video posted to YouTube. It was an unusual video because it suggested the quarter-million-dollar ASR 9000 router might make a nice Valentine's Day gift. How many ways can a man tell his sweetheart, I love you?

Until now, the answer was three. He could buy her expensive diamonds. He could take her on a tropical vacation. Or he could carve his initials into a tree, then carve a heart, and then carve her initials. But now, he can give her the ultimate expression of his everlasting affection. The Cisco ASR 9000. Because nothing

says forever like up to 6.4 terabits per second. Nothing says commitment like up to 400 gbps per slot. And nothing says I love you like six times the mobile backhaul capacity. How many ways can a man say I love you? The answer is four. The Cisco ASR9000. As the marketing director for Cisco said, most B2B advertising is boring and dull. His company wanted to cut through that noise by making customers smile.

Cisco inherently knew that business-to-business purchase decisions are made emotionally, then rationalized with logic and facts. That's why humor played a critical role in the company's marketing. Humor creates connections. Connections create confidence. Confidence creates trust. And that's why Cisco created an element of its campaign that made their customers smile.

It wanted to project relaxed confidence to warm up the relationship. Almost immediately after the video hit, influencers, people who exert sway over the purchase of business products, started posting positive feedback about the Cisco video. Trade publications blogged glowing reviews. The New York Times weighed in with a positive article. And most importantly, customers started calling for meetings and demonstrations. The campaign achieved three interesting things.

It humanized a piece of equipment that usually sits in the dark room at the back of an office. It turned launch day into a launch that lasted weeks by generating ongoing chatter. And it made Cisco feel hip and confident. It was one of the top five launches in the company's history. By breaking the B2B rules, the video did the seemingly impossible.

It made the ASR 9000 aggregate services router sexy. Do you remember this moment on Jeopardy? From the T.J. Watson Research Center in Yorktown Heights, New York, this is Jeopardy! The IBM Challenge. It was an astounding spectacle to watch. The two best Jeopardy! champions ever competing, in real time,

against Watson, the IBM supercomputer. Music fans wax rhapsodic about this Hungarian's transcendental etudes. Watson. Who is Franz Liszt? You are right. Don't worry about it. For 1600. You're just a little stiff.

You don't have this painful mosquito-borne joint illness with a Swahili name. Watson. What is dengue fever? Dengue fever, correct. The three-day competition was fascinating, because while Watson took a commanding lead, it didn't get every answer correct. Watson.

What is Picasso? No, sorry. When the final Jeopardy question was asked, both human contestants guessed the correct answer, which was, who is Bram Stoker? So it all came down to Watson's final wager and answer. Now we come to Watson. We're looking for Bram Stoker.

And we find... Who is Bram Stoker and the wager? Hello, 17,973, 41,413, and a two-day total of 77,147. Watson was the Jeopardy! champion of champions. Ten million people tuned in to watch the show. But what most of those ten million didn't realize was that Watson's appearance on Jeopardy!

was a major business-to-business marketing campaign. IBM was not looking for consumer business. It was searching for a mainstream way to sell computers to Fortune 1000 companies. Jeopardy! was the perfect vehicle. It was a highly rated television show with intelligent content that appealed to a mass audience. Two weeks before the Jeopardy challenge, IBM began its campaign by rolling out 30 short videos on YouTube, explaining how Watson's technology could be applied to

customer service, finance, and healthcare sectors. The PBS program Nova was enlisted to air a documentary about Watson the week before the contest. IBM collaborated with a Businessweek editor on a book about the contest, the last chapter of which would be released after the finale. Due to Jeopardy's scheduling, there was a month between the taping of the IBM Challenge and the actual airing. So IBM took full advantage of those 30 days to heavily promote the supercomputer,

knowing full well Watson was the secret winner. Once the show aired, IBM attracted enormous attention. The press wrote thousands of articles, and young tech recruits inundated IBM with applications. But most importantly, B2B clients got an exciting glimpse of the future. And the display of Watson's power inspired those companies to imagine how IBM's technology could be applied to their industries. One week after Jeopardy, IBM was swamped by inquiries from corporations, universities, and government agencies. The Jeopardy IBM Challenge

may have been entertaining television, but it was one of the most successful B2B campaigns of the decade. New year, new me. Season is here, and honestly, we're already over it. Enter Felix, the healthcare company helping Canadians take a different approach to weight loss this year. Weight loss is more than just diet and exercise. It can be about tackling genetics, hormones, metabolism.

Felix gets it. They connect you with licensed healthcare practitioners online who'll create a personalized treatment plan that pairs your healthy lifestyle with a little help and a little extra support. Start your visit today at felix.ca. That's F-E-L-I-X dot C-A. Whether you're in your running era, Pilates era, or yoga era, dive into Peloton workouts that work with you. From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who you are.

So no matter your era, make it your best with Peloton. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. The campaign that most clearly signaled the changing tide in B2B advertising came from the most unlikely source. Volvo Trucks. The Swedish manufacturer had developed a new line of heavy-duty transport trucks with leading-edge technology.

The company wanted to advertise that technology in an unconventional way because it knew it couldn't outspend its competitors. So Volvo hired a highly creative Swedish advertising agency named Forsman and Bodenfors. Eventually, two important insights shaped the thinking. First, truck drivers have an emotional connection to the trucks they drive. Second, a volume of people influence the buying decision beyond the truck drivers, including their families, colleagues, and bosses. Therefore, the advertising had to reach a wide swath of people,

but the budget wouldn't allow for television. So Volvo and its agency planned a viral marketing strategy. The idea was to create a series of short films to demonstrate a live test of each new truck feature and post those films on social media. Six films were produced, highlighting aspects like the improved maneuverability, undercarriage clearance, and towing capacity.

All were viral hits. But it was the last film that became a runaway success. One of the features on the new Volvo trucks was its dynamic steering technology. In other words, the steering capability was so precise, you could actually drive two Volvo trucks with trailers attached, at high speed, side by side, and they would maintain a perfect two-foot gap between them without deviating a single inch.

To demonstrate that feat, the ad agency hired a celebrity to be in the video. That celebrity was Jean-Claude Van Damme. The limber action hero would turn out to be an inspired choice. Van Damme was well-known around the world, but he wasn't an A-lister anymore, so he wasn't that expensive. Next, the ad agency secured the rights to a calming Enya song. Then, they filmed Van Damme doing the most astonishing thing. I've had my ups and downs,

my fair share of bumpy roads and heavy winds. That's what made me what I am today. Now I stand here before you. What you see is a body crafted to perfection. A pair of legs engineered to defy the laws of physics. And a mindset to master the most epic of splits. As you hear Van Damme speak those words, he is straddling two side-by-side Volvo transport trucks, one foot on each truck's side mirror. But here is the amazing part.

The trucks are moving. Not forward, but in reverse, in perfect unison, about two feet apart, at high speed. And if that weren't enough, the trucks start to slowly pull apart. Who can say where the road goes, where the day flows, only time. Remarkably, and I mean remarkably, the trucks start to separate to the point where Van Damme is forced to do one of his famous epic leg splits. As the camera follows the speeding trucks and Van Damme straddles them both in a physics and age-defying flat-out leg split,

the precision and directional stability of Volvo's steering technology is put on jaw-dropping display. If you have not seen this commercial, you have to see this commercial. It's on our website. It's one of the most watched ads of all time. As of this writing, it has generated 82.7 million views, a staggering number for any commercial,

let alone a business-to-business commercial. The campaign generated over 20,000 news reports around the world, the equivalent of an estimated $170 million of free airtime. There is no doubt Epic Split got a lot of attention, but the real insight was this. Volvo wanted experienced drivers, drivers who had seen it all, to be amazed by the precision of the demonstration. Not just the spectacle of watching Jean-Claude Van Damme, but to communicate intimately to drivers who know, firsthand, how difficult it is to control a tractor-trailer at high speeds.

While the rest of the world watched action star Van Damme doing the splits, truck drivers saw the real star, Volvo's revolutionary steering control. Surveys done a short time later revealed that half of the truck drivers who watched the ad said they were now more likely to buy a Volvo next time they purchased a truck. And one-third of those had already contacted a dealer. As I've often said, creativity is a powerful business tool. Advertising Age magazine reported that Volvo spent $3 million to make those films, but generated $175 million in revenue as a result.

It was an epic return on investment. Business-to-business advertising has come a long, long way. Back as recently as the 1980s, industrial advertising came in one variety, industrial strength dull. Then smart marketers realized that B2B advertising didn't have to mean boring-to-boring. But here's the insight that changed business-to-business advertising forever. B2B buyers are actually more emotionally attached to the brands they purchase than regular consumers are because they have more to lose. As the chief marketing officer of General Electric recently said,

it's not like buying a pair of pants you can return. Buying expensive business equipment is a much bigger decision. There's more risk. Make a wrong decision, and a buyer might not just lose credibility, but possibly her job. So when there is that much stress present in a purchase decision, it pays to frame that choice in human terms. That means marketing to a person, not a building or

a company. A lesson the business-to-business world has learned from the business-to-consumer world. It's a seismic shift in marketing. It wasn't that long ago where you couldn't pay a young copywriter enough money to work at a B2B advertising agency.

And today, those same copywriters are jealous of an ASR 9000 aggregate services router commercial. When you're under the influence. I'm Terry O'Reilly. This episode brought to you by... Donald Trump, candidate for president. Rich, but never bitter. Under the Influence was recorded at Pirate Toronto. Series producer, Debbie O'Reilly. Sound engineer, Keith Ullman.

Theme music by Ari Posner and Ian Lefevre. Research, Tanya Moore-Yusuf Hey, I like your style. I'd like your style even more if you were wearing an Under the Influence t-shirt. Just saying. You'll find them on... BetMGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, BetMGM, authorized gaming partner of the NBA, has your back all season long.

From tip-off to the final buzzer, you're always taken care of with the sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM, a sportsbook worth a slam dunk, and authorized gaming partner of the NBA. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager Ontario only.

Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BitMGM operates pursuant to an operating agreement with iGaming Ontario. Our shop page at terryoreilly.ca slash shop. See you next week.