This article an excerpt from our whitepaper, ROI in FDI: Measuring Place Marketing Success in Investment Promotion. Download the entire report below.

The landscape of business decision-making has undergone a dramatic transformation accelerated by digital technologies and global events like the COVID-19 pandemic. Today's executives increasingly rely on digital channels for information gathering and evaluation, often conducting extensive research independently before engaging with IPAs or other stakeholders.

This digital-first approach has fundamentally changed how executives discover, evaluate, and ultimately decide on potential investment locations. With vast amounts of information at their fingertips, from economic data to quality of life indicators, decision-makers are empowered like never before. This shift presents new challenges for IPAs in positioning themselves and engaging potential investors, requiring different approaches than 5, 10 and 20 years ago.

The research on the issue backs this up, as indicated by the following three studies.

• The 95-5 Rule (LinkedIn B2B Institute): Proposed by LinkedIn, this framework posits that only 5% of potential buyers are actively in the market at any given time. The other 95%, while not actively seeking opportunities, are passively consuming content that shapes their perceptions and future decisions.

• Influence of Day-One Consideration Set (Bain & Company): Research on large B2B decision-making process by Bain & Company revaled that 80-90% of B2B buyers have already formed their "consideration set" on day one of their active buying journey, with 90% making their final selection from this initial set.

• Likelihood of Contacting an IPA (C Studios, 2023): In Winning Strategies in Investment Promotion Marketing, only 28% of companies said they are likely to contact an IPA during the initial screening phase. Instead, nearly three-quarters wait until the short-listing phase or later, meaning crucial decisions are often made without IPA input.These findings highlight a critical "invisible" phase in the decision-making process, where companies conduct independent research and form opinions without direct IPA involvement. This underscores the importance of early visibility and positive brand perception for IPAs before opportunities become known, which is the role that place marketing can serve.

These findings highlight a critical "invisible" phase in the decision-making process, where companies conduct independent research and form opinions without direct IPA involvement. This underscores the importance of early visibility and positive brand perception for IPAs before opportunities become known, which is the role that place marketing can serve.

The graphic above depicts this invisible path, illustrating how IPAs might not be involved until late in the decision process. That lack of a linear process is why we prefer this LEADS framework, as it allows for multiple entry points for cities and countries to make themselves known, contrasting with traditional "funnel" methodologies that suggest only one way in at the top.

For IPAs to succeed in this new landscape, they must adapt their strategies to influence decisions along this entire journey, becoming active participants in shaping perceptions rather than merely facilitating final decisions. The further to the right that one becomes involved in an FDI project, the more work is required to overcome the allure of an initial competitive set and the strong emotional connections that are formed.

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