Beyond the Click : The B2B Marketer s Guide to Display Advertising

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1 Beyond the Click : The challenge In B2B marketing, the ultimate objective of any campaign is to generate the most qualified leads possible, convert these leads into new opportunities that fill the sales pipeline, and then turn these opportunities into customers and repeat business. However, many marketers are still unsure of how to fully leverage online display advertising as a B2B marketing channel, and how to measure success in ways that validate display ads as concrete contributors to sales and revenue.

2 Many marketers have succumbed to the click as the main metric by which they should measure success in display advertising. (With the average click-through rate for display ads at 0.1% 1, it s no wonder that marketers question how to best leverage this channel.) For those that do start down the path of using the click as their primary success metric, many end up frustrated when a high click-through rate does not necessarily result in the most qualified leads, complicating things even further. Finally, because the B2B sales cycle is often long and complex, and involves numerous individuals in the decision-making process, B2B marketers may wonder how to best use display ads to generate qualified opportunities and increase revenue. How should one approach ad targeting considering the B2B buying process? And what are the most important success metrics? How display advertising impacts B2B purchases Without question, display advertising impacts the B2B sales cycle, and when companies use it effectively, they can achieve incredible results. In fact, display advertising is one of the only marketing channels that can influence B2B buyers at every step of the buying process. While other marketing channels such as search and are most useful for targeting prospects in later stages of the sales cycle (e.g. during the vendor evaluation stage) display advertising influences the B2B purchasing process from start to finish. Display ads begin to influence prospects decision making from the point at which they become aware of a product or service to even after they have purchased, when they require the reassurance that they have made the right choice. Moreover, display ads have been proven to significantly increase lift and conversions when combined with other marketing channels including search. Here s a realworld example from Forrester Research: A national wireless network provider was attempting to quantify the impact of advertising on sales of phones and wireless plans. Previously, the company used a last-click model, where search received the majority of credit for sales. It found that users who clicked on search ads, who were also exposed to display advertising, were 56% more likely to purchase. This increase in lift revealed the importance of display advertising, even though previously it had received no credit for these sales. 2 1 The Bottom Line Is Online Ads Work for Branding and Sales, Laurie Sullivan, MediaPostNews, July 31, A Framework for Multicampaign Attribution Measurement, John Lovett, Forrester Research, February 19, 2009.

3 The goal of this guide is to help B2B marketers achieve similar success by better understanding the role of display advertising in generating highly qualified leads and revenue. And by applying the power of display advertising to the B2B sales cycle through tactics that drive real results, you ll learn how to effectively utilize and measure the channel to make the greatest impact on your company s bottom line. A Quick Look at the Evolution of Online Advertising Banner Ads In the beginning, banner ads were supposed to provide Keyword Advertising In response to the lower number of actual conversions Contextual Advertising Online ads were placed next to related content (e.g. an ad for Cookie-based Targeted Advertising Web sites have the ability to concrete value to companies resulting from high volumes of a credit card next to an article attach a trackable piece of text based on the sheer number impressions, the pay-per-click on the increased purchasing or a cookie to identify the of impressions or Web users model developed, in which power of college graduates) in time spent on sites, specific exposed to the ad. companies bid on keywords an effort to provide even greater sites visited, and more to or phrases for which their relevancy. enable targeting based on prospects are searching. demographic, behavioral, Companies pay only for the geographic, and other types of clicks that result from information. these searches.

4 The unique role of advertising in the B2B world Before we dive into metrics and tactics, it will be helpful to understand the role of display advertising in the B2B world. When we think of online advertising, we most often think of its role in the context of consumer purchases. Given the unique characteristics of the B2B buying process, however, display advertising plays a unique role in B2B sales. Long and complex sales cycles benefit from awareness and branding In general, the B2B buying process is longer and more complex than the typical consumer purchasing process. As such, display ads can help by increasing awareness and brand saturation for prospects at all stages of the sales cycle. As prospects progress along the buying cycle from the awareness to the consideration stage, display ads continue to keep the company s product or service top of mind, helping to increase both brand recall (the ability to remember a brand when given a specific category or product type) and brand recognition (the ability to recognize a brand when the specific name or category is mentioned). While each B2B company may have its own version of the sales funnel, the top of the funnel is the point at which prospects become aware of a company s brand and/or its products and services. Display ads contribute greatly to this initial stage of awareness when targeted appropriately, they can generate a tremendous amount of highly qualified leads. Display ads can also help to communicate core messages about the company, product, or service, helping educate prospects before they engage with sales.

5 The Impact of Display Advertising on the B2B Sales Funnel Prospects (Awareness) Display Advertising Leads (Interest / Consideration) Social Media Search Display Advertising Customers (Decision) Display advertising influences every stage of the sales funnel and also strengthens the impact of other marketing channels. Display ads help reduce feelings of risk in large B2B investments Because B2B purchases are typically more expensive and have large-scale effects on organizations, the B2B buyer can often be overwhelmed with feelings of risk before making a purchasing decision. According to search marketing firm Enquiro, B2B buying is all about minimizing fear by eliminating risk. 3 This is one reason why B2B transactions require companies to build strong relationships with prospects before they become customers. In addition to the more traditional methods of building trust in customer relationships, B2B companies can also use their display advertising campaigns to reduce the feelings of risk in the buying process. By using display ads that feature customer testimonials, industry accolades, or other forms of third-party validation, B2B companies strengthen their brand and credibility, and provide the reassurance necessary to address the risk factor. Business demographics matter with multiple individuals on the buying committee B2B purchases are likely to affect multiple departments within an organization. As such, there are going to be multiple influencers and perhaps even more than one decision maker involved in the sales process. While advertisers have used demographic ad targeting for some time now, it is only recently that B2B companies have been able to leverage ad targeting based on highly detailed business demographics to address their specific requirements for identifying their ideal 3 Mapping the Buyersphere, Enquiro Research, Fall 2009.

6 prospects. According to Tom Grant, research analyst at Forrester Research, Context matters. Factors like company size, country, and role have more of an effect than many people realize. 4 By identifying the business demographics of as many individuals as possible on the buying committee and understanding their various motives and mindsets, B2B companies can then use display advertising to target these individuals in highly relevant ways. than $40K annually). 5 While this demographic may be a target for some, most B2B decision-makers tend to be C-level executives that are more seasoned in their careers and earning six-figure salaries. The impact of this research is two-fold: the click-through rate can be a misleading success metric in B2B display advertising, and it is more important than ever to target the right business demographic in order to reduce wasted marketing spend. Furthermore, a recent study indicates that the Internet population that is most likely to click on an ad is predominantly younger and lower income (earning less Display Advertising Success Story: Making Customer Segmentation Count Hoover s, one of the leading sources of proprietary business information, took a routine customer segmentation exercise and used its findings to increase its ROI in display advertising. After determining the demographics of business professionals who represented their best target customers, the company applied this information to its targeted display advertising efforts. In just two months, Hoover s increased the ROI of its display advertising campaigns by an average of 225%. 4 How Demographics Matter In B2B Tech Adoption, Tom Grant, Forrester Blogs, March 11, Natural Born Clickers, comscore, 2008.

7 Eight Ways to Use Display Advertising More Effectively in B2B Marketing Now that we ve explored the ways that display advertising can impact the B2B buying process, it s time to discuss the real-world tactics that all B2B marketers can use to maximize the display advertising channel in their marketing mix. 1 Target the business demographics of your typical buying committee. As mentioned earlier, there will most likely be a group of individuals or a buying committee involved in the purchasing of your B2B product or service. Before investing in any display advertising, talk to your sales team to better understand the business demographics of as many individuals as possible on the buying committee. By advertising only to the business demographic segments that are likely to buy your product or service, you will experience greater conversions, fewer wasted impressions, and increased ROI for your advertising budget. 2 Analyze your customer database and work with sales to better understand your target business demographic. You re probably already familiar with some of the basic business demographic attributes on which you can target your ads, including company size and industry. However, also be sure to consider attributes such as business function and seniority within your targeted organizations. To help understand how these characteristics may play into your sales process, take an informal audit of your current customer database and see if you can spot any trends in the type of people involved in your new business deals. Also, encourage your sales team to record detailed notes on the individuals involved in their opportunities. For example, is there a difference in the seniority of the person that initiated the sales conversation (e.g. senior manager) versus the person who ultimately signed off on the purchase order (e.g. CEO)? Once you start tracking this sort of information, you ll be able to improve the targeting and relevancy of your display ads going forward.

8 3 Think beyond the click when establishing your success metrics for display advertising. While it s tempting to rely on the click as the go-to metric for display advertising, times have changed and technology has enabled us to discover that click-throughs don t necessarily indicate success. As discussed earlier, for B2B purchases in which business demographics are often the strongest indicators of purchasing intent, even a low volume of click-throughs may result in hotter leads. This is because the more targeted your advertising, the fewer random clickers it is likely to attract, leaving you with only the most qualified leads. In addition to measuring impressions and clicks, incorporate metrics such as Share of Voice (SOV), Frequency, and Gross Rating Point (GRP) in your reports. Share of Voice (SOV) A measure of the number of unique individuals reached in your target divided by the total population available in your target across an entire network. (SOV is also often defined as Reach ). NOTE: Share of Voice is even more meaningful if you can measure it across your target business demographic segment(s). Share of Voice = Uniques (sample population)/uniques available (total population) Frequency The number of times your ad is exposed to a group of unique individuals. Frequency = Impressions/Uniques Gross Rating Point (GRP) A measure of the influence opportunity of a campaign Gross Rating Point = Reach x Frequency

9 4 Let ROI be your guiding principle. Whether you invest in display advertising, search, , or any other marketing channel, remember that what ultimately matters is your return on investment. Return on Investment (ROI) = (Profit/Investment) x 100 Regardless of which success metrics you focus on, ROI always means that you re earning more from your marketing than you re spending. In general, you can increase your display advertising ROI by knowing who your audience is and wasting no impressions on anyone else. Additionally, it is important to track the improvement that display advertising delivers to your other marketing channels to measure the overall ROI of a display advertising campaign. 5 Use display advertising to support your other marketing channels. While it s easy to think of your marketing channels as separate silos, avoiding this mindset will help you achieve even greater lift with every marketing campaign you execute. It s been proven that combining display with search marketing efforts dramatically increases conversion. In recent research, comscore found that search alone produces an 82% lift in sales from visitors exposed to ads, compared to 119% when search and display are combined. 6 The key is providing your prospects with the most relevant online experience possible, and display ads can play a huge role by reinforcing your marketing and messaging in other channels. 6 Experiment with different creative, and test, test, test. It s important to go into your display advertising campaigns without assumptions, and that includes assuming that all creative is created equal. You d be surprised how copy, images, and even the size of your display ads can make a difference in your conversion rates. Be sure to approach your campaigns with an open mind, create multiple versions of creative, and continuously test and optimize your ads as you go along to achieve the best results. 6 The Bottom Line Is Online Ads Work for Branding and Sales, Laurie Sullivan, MediaPostNews, July 31, 2009.

10 7 Display is more than promotion it s communication. More often than not, in B2B marketing, it s more important to communicate your core messages than it is to be clever with your tagline. Identify two to three core messages for the product or service you re advertising, and try to incorporate the same language in your advertising campaigns (taking space limitations into account, of course). In doing so, your display ads will create a lasting impression on your prospects while communicating your competitive advantage. 8 Tailor your display advertising to match prospect needs at different stages of the sales cycle. Prospects needs change over the course of the B2B buying process. For example, in the awareness stage, people generally require more informational content as they re learning about your company and offerings. However, as prospects learn more and begin to search for your product category or even your specific brand, these individuals will likely be more interested in learning how your product or service compares to your competitors brands. To meet these evolving needs, adapt your display ads accordingly. If you re advertising on a new site for the first time, you will most likely encounter new prospects, so make your advertising messages more educational. However, if you re combining display with search, in which prospects may be more qualified and farther along the sales process, use your display ads to address your competitive advantage, specific product features, and so on.

11 Conclusion Display advertising can play a tremendous role in B2B marketing, generating qualified leads and increasing revenue on its own, as well as in combination with other marketing channels. Unlike other marketing channels, display ads can positively impact the B2B sales cycle at every stage, from awareness to evaluation to customer retention. By understanding the unique needs of the B2B buying process, companies can implement display advertising strategies that increase awareness and brand saturation, promote competitive advantage, and more effectively target the right business demographics for greater relevancy and increased sales. About Bizo Bizo, Inc. is the world s first targeted B2B audience targeting platform and advertising network, and currently reaches more than 45 million targeted business people across thousands of sites on the Web. Bizo has created a new approach to online B2B marketing with precise ad targeting that s based on a prospect s bizographics -- industry, functional area, seniority, size of company, education, gender, location, and more. This unique understanding of a person s bizographics allows Bizo to anonymously deliver powerful ad targeting based on these attributes and behaviors. Bizo is privately held and based in San Francisco, CA.

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