The Actual History of B2B Marketing (no, it didn’t start with Gutenberg)
History frequently provides a profound look into the future. What we’ve done in the past often give surprising insight in a world where everyone tries to stay ahead of the curve.
I assume this is the reason most folks Google the “history of B2B marketing.” In my case, I was looking for its origins, and if any forgotten bits of early marketing theory were applicable today.
I was immediately disappointed.
If you read the following three bullet points, you won’t learn anything new from Google’s B2B marketing historians:
- Marketing in the middle ages was person-to-person (there was no system to distribute information);
- Gutenberg revolutionized marketing with the printing press;
- The internet revolutionized marketing again.
Not to knock the infographics that are doing great SEO, but these are the sorts of insights you could get from the average American middle schooler.
After a month of research — and a trip to the University of Utah archives — I honestly can’t blame them.
The history of B2B marketing (or “industrial marketing”, as it was called pre-1990s) is hard to come by. The first academic journal dedicated to industrial marketing was published in 1971, more than 50 years after the advertising boom of the 1920s. There’s a 50+ year dead zone in the literature.
Unfortunately, we can’t start the B2B Marketing timeline hundreds of years back, for two big reasons:
- Marketing didn’t exist. With few exceptions, marketing — insofar as it is a discipline dedicated to researching and reaching a number of potential buyers at scale — basically didn’t exist until the 1910s. “Person-to-person marketing” has another name that should be pretty obvious: “Sales.”
- Business didn’t exist. The modern business is largely a product of the Industrial Revolution. Before the modern business, there were joint-stock corporations (think: the Massachusetts Bay Colony, which settled Plymouth), and before that there were guilds (skilled artisans who grouped together to earn better prices on their services), but none of these organizations were really marketing to each other.
So how did the first true B2B marketers really market their products? Heck, what did they even do?
That’s what I set out going to explore.
Where Was Marketing Before 1910?
Without historical context, the absence of marketing prior to 100 years ago might seem surprising.
There are two big reasons marketing didn’t really develop until around 1910:
- 10,000 BC — 1870 CE: Hyper-local communities and long transportation times made targeting buyers at scale both unproductive and untenable.
- 1870 CE — 1910 CE: Industry was dominated by monopolies.
The whole point of a monopoly is to make things like marketing unnecessary. Marketing exists to a) raise awareness about products/companies; b) differentiate products/companies; and c) define strategy around potential buyers of your product vs. others’ products.
The effort is pointless when there’s only one product.
Pre-1920s: The Exceptions
This isn’t to say advertising didn’t exist. Trade journals began publication around the early 1800s, and most of these ran ads. The ad below is from the 1848 edition of the American Railroad Journal and Iron Manufacturer’s and Mining Gazette (which you can read here).
If we want to say marketing = advertising, we could realistically set the timeline back to around 1820 (at least in America). For the sake of marketers everywhere, I don’t think we want to do that.
That said, there are a couple pre-1920 exceptions worth exploring.
1872: Montgomery Ward’s Mail-Order Catalog
For context, agriculture was by far the largest industry by employment in 1870. 53% of employed Americans were farmers. Manufacturing had yet to ramp up; the largest textile mills employed fewer than a thousand people each.
Insofar as each farm was essentially a sole proprietorship, marketing to this labor force was B2B. A growing railroad system made it possible to reach these businesses in a more targeted way: via direct mail.
You might be familiar with the Montgomery Ward & Co. mail-order business, if only as a historical footnote that “lost to Sears.” But this catalog was one of the first instances of B2B marketing.
Founded in 1872 by Chicagoan salesman Montgomery Ward, the eponymous catalog targeted rural farmers with limited access to dry goods. The mail-order business was unprecedented.
Prior to Ward’s catalog, local shops (think the old-timey general store) were practically monopolies. Ward’s catalog cut out the middleman and gave them access to the same prices as their urban counterparts.
1895: John Deere’s “The Furrow”
This one is a bit of a legend among content marketers.
More than a century before “content marketing” was coined, John Deere was selling tractors by providing potential buyers with valuable educational resources. This thing has been beaten to death, so I won’t go into any more detail.
1920s: The Rise of Marketing
Post-monopoly, marketing became necessary in the B2C world. There’s tons written about the rise of marketing & advertising in the 1920s, so I won’t give it much space here.
While B2B marketing did exist at this time (largely through advertising in the trade catalogs preferred by their target buyer), it was not a fleshed-out discipline. It wasn’t until the 1930s, after the Crash of 1929, that B2B marketing came into its own.
1930s: “Industrial” Marketing Comes Into its Own
B2B marketing — or “industrial marketing” as it was called then — didn’t gain traction as a discipline until after the Crash of 1929.
To understand why, we need to look at the first book dedicated to the art of industrial marketing, authored by John Frederick in 1934 (and aptly named Industrial Marketing).
“Not so many years ago the manufacturer selling to industry produced a product and told his sales force to sell it. Today this is not considered a successful method, because there is an ever-increasing effort on the part of purchasers to select the best product, either material or machine, for their purpose, since profit depends in large measure upon the intelligence exercised in such selection.”
The Great Depression fundamentally altered the average consumer’s buying habits. When you live paycheck to paycheck, you don’t need to experiment, you need the product to work; forget buying the latest and greatest. This shift in buying habits trickled up to the industrial buyers who created those products.
Another reason industrial marketing faltered until the 1930s was a dearth of data. As Frederick illuminates:
“Until very recently, there has been a comparatively small amount of market research carried on in the field of industrial marketing, although some of the larger producers of industrial products have organized their own market research staffs, largely composed of men drawn from the consumer research field, who may be considered as pioneers.”
Data is less important when things are going swimmingly. The need for market research arises when competition is fierce and buyers are few.
Early B2B Marketing Activities
When you think of marketing today, you probably think of things like:
- Lead & demand generation;
- Product marketing & competitive analysis;
- Sales enablement;
- Branding and content marketing.
Early B2B marketing consisted of all these responsibilities, and more. And surprisingly, these activities were not carried out by “marketers.” Marketing departments as such didn’t really exist until the rise of the mega corporation in the 1950s.
Below you can see a typical organization chart:
There is an “advertising” department, but those responsible for advertising weren’t doing the rest of the heavy “marketing” lifting. The responsibilities of “marketing” were shared throughout the organization.
This becomes more clear when you look at the massive umbrella of responsibilities captured by “industrial marketing.” In Frederick’s Industrial Marketing, we can see all of the following listed as industrial marketing costs:
- Direct selling costs: salesmen’s salaries, travel expenses, and sales office expenses;
- Advertising costs: expenditures in advertising media, advertising production costs, salaries and office expenses;
- Transportation: payments of freight, long distance trucking;
- Warehousing and storage: total warehousing, storage, and handling of goods;
- Credit and collection: maintenance of collection department, legal fees, and costs of credit service
The scope here is far beyond generating leads and brand-building. It encompasses everything from sales, to supply chain, to customer retention.
For the sake of simplicity, I’m going to ignore the industrial marketing activities that relate to transportation, warehousing, and collections. The goal is to focus on the activities that are direct corollaries to today’s marketing endeavors.
The 6 Types of Nascent B2B Marketing
Prior to the internet, B2C advertising was simple. Put your ad in front of as many people as possible for as little cost as possible.
But B2B advertising necessarily requires targeted ads. How did that work prior to cookies and lead forms?
Well, in several ways:
1) The Trade Catalog
An advertisement in a industrial marketing trade catalog, targeting advertisers charged with marketing to dry goods manufacturers. Yes, this is a bit meta. (Class, 1920)
Like today, catalogs and magazines targeted at specific industries provided an opportunity to market directly to buyers.
Also like today, ads were solutions-focused, rather than features-focused. As Frederick explains (in typical verbose fashion):
“It is more important to stress the usefulness of the product for the buyer than the characteristics of the product itself. Details of design or manufacture can be used effectively at times to show why a particular product has certain superior operating characteristics, but these details alone are not sufficient to attract the buyer.”
That’s right, we’ve belittled the marketing of “features” for nearly a century.
A notable distinction between modern catalog advertising and that of the 1930s is the sheer quantity of copy. Our penchant for short, punchy taglines and vibrant imagery would make this sort of ad unworkable today (also, who would take the time to read it?).
2) Sales Enablement Literature
That B2B marketing should primarily clear a path for sales is an idea that’s been around since its inception. The sorts of sales enablement materials expected from marketing in the 1930s look very similar to today’s:
- Sales Manuals. Step-by-step playbooks designed to codify a sales forces’ selling approaches, provide analyses of common selling difficulties, and detail a product’s features and ways they can be used.
- Visual Presentations. “Material designed for a salesman to use during interviews with prospects, either as a major or supplementary part of his presentation.” Yup, they had slide decks in the 1930s too.
- Motion Pictures. Though relatively new, organizations with the budget for it could create slides and “moving pictures” so salespeople could present a consistent pitch on a large scale (eg, to large buying groups all at once). And you thought video was a marketing trend in 2018.
3) Direct Mail
The fundamentals of direct mail haven’t much changed since the 1930s. Generally speaking, there were a couple ways you could use direct mail for maximum effect:
- In tandem with ads running in trade catalogs. Direct mail offered the opportunity to expand on the impression you already made in a trade catalog they (hopefully) read.
- As a “beta test” for ads you’ll run in trade catalogs. In this instance, you could monitor the performance of your direct mail campaign to determine what to publish more widely.
I’d also add that Frederick has a gripe I’m sure still resonates with email marketers today:
“Many industrial advertisers spend large sums on the preparation of advertising matter, but begrudge the money necessary for the proper maintenance of their lists, which are the lifeblood of direct mail advertising.”
4) House Organs
House organs were magazines, brochures, or catalogs published by the marketing organization. Sort of like a proto-blog.
House organs were published on a regular cadence, and informed customers and prospects about:
- Benefits of using the product. The classic sort of “solutions” approach to informing prospects about a product.
- New ways the product can be used. Updates and new features a customer might not otherwise be aware of. Remember that the only other way to do this would be via direct mail or advertising in trade catalogs.
- How other customers use the product. Case studies, before they were called case studies.
- Any other information that keeps the customer’s interest in the product. This is sort of a “catch-all” for anything else. For example, Tractor Tract, a house organ published by the Hyatt Rolling Bearing Company, was targeted at dealers (the person selling the tractors in which HRBC’s bearings were used). The information provided was “interesting information that is useful in his daily work,” and the goal was “to act as a clearing house disseminating modern sales methods employed by aggressive dealers throughout the country.”
House organs were not designed as a hard sell. They were more like primordial content marketing.
5) Conventions & Exhibits
Frankly, I can’t find anything about these in the early-mid 20th century. I’m only including them for completeness since they are included in the budget breakdown presented in Frederick’s Industrial Marketing (shown below).
6) Advertising to the End Consumer
This is an interesting one. Remember how Hyatt Roller Bearing Company empowered the dealers of the products its own product was used in? This sort of indirect approach to advertising was not uncommon.
For example, the American Rolling Mill Company (producers of refined iron) adopted this approach to advertise the Armco rust-resisting iron ingot. It advertised to the general public, creating awareness about the importance of quality iron. The result? Consumers took extra care to look for the “Armco Triangle” on their purchases and the Armco ingot brand experienced remarkable growth.
You can see one of their advertisements from 1929 below:
This approach has gone by the wayside in today’s world of hyper-targeted advertising. Why bother marketing to influencers three or four steps removed from the actual purchase when you can target the buyer directly? Even so, I think we can learn a bit from this approach.
Indirect advertising is a great example of long term-minded marketing. It would be like if a sales training provider marketed to buyers and educated them on the benefits of engaging with salespeople trained in their methods. Or if an talent management SaaS marketed to employees and explained the time-savings, ease of use, etc. The average employee may not even interact with the software, but will experience its effects nonetheless.
It raises the question:
What would happen if the people who ultimately experience the effects of a product are on board before they come across it?
This is different than the people who use your product. Quality B2B products have broad impact. Consider the many categories of people who would experience the effect of the Armco rust-resistant iron ingot compared to those who would use it:
- Cookware executives. Users. Increased quality will help them create a better final product (frying pans, coffee pots, etc).
- Cooks. Experiencers. They don’t use iron ingots to cook food. But they do experience the effects that come from higher quality cookware.
- Advertisers. Experiencers. Manufacturers who use the Armco ingot experience easier packaging and branding work because of Armco’s existing brand equity.
- Customer service professionals. Experiencers. Manufacturers who use the Armco ingot experience fewer complaints due to the increased quality and durability.
- Finance executives. Experiencers. Manufacturers who use the Armco ingot experience fewer returns due to the increased quality and durability.
We could keep going, but I think you get the point.
Obviously this strategy would work better in some situations than others. The sales training hypothetical is a bit of a stretch, but I think there’s something to be said when it comes to the talent management SaaS.
I think there’s opportunity here. Think of the number of people who are impacted by a B2B product but are several steps removed from the buying decision. Imagine if a salesperson reached out to a buyer, only to discover the work was done for them by the people whose opinions the buyer cared about most?
Might be interesting.