The Maturation of Online Marketing

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1 BtoB Research Insights The Maturation of Online Marketing May 2012 In partnership with

2 TABLE OF CONTENTS 1. The Maturation of Online Marketing 2. The Online Marketing Opportunity: The Next Frontier 3. The State of the Art 4. The Online Marketing Challenge 5. Enhancing the Marketing Mix 6. Providing Impact across the Marketing Mix 7. Key Takeaways 8. Appendix 4 Methodology 4 List of contributors 4 About BtoB NOTES & RESOURCES BtoB conducted an extensive online survey in January and February of 326 B2B marketers and other executives about their views on online marketing and how to increase the value of their brands online. This white paper presents those findings, as well as suggestions for the future. See the Appendix for further details on the methodology. In partnership with BIZO

3 THE MATURATION OF ONLINE MARKETING For years B2B marketers have relied on marketing campaigns to generate online revenue and digitally cater to the growing number of their customers and prospects who are migrating to online venues. It s little wonder: Since online marketing went mainstream in the early 2000s, has been a workhorse, helping B2B marketers to establish their digital credibility with customers, generate sales revenue and tap into new audiences. However, in recent years several new online marketing tools have emerged, such as blogs, white papers and social networks à la LinkedIn, Facebook and Twitter (not to mention all of the mobile platforms, with smartphones and the ipad selling briskly). Yet marketers are having a tough time finding the right marketing mix and, as a result, are not meeting the demands of the sales pipeline. Part of the problem: Marketers still overwhelmingly rely on to drive new business online and fail to budget for other online marketing tools that can enhance their brands visibility online, boost sales revenue and position their companies for the future. THE ONLINE MARKETING OPPORTUNITY: THE NEXT FRONTIER While marketers still rely on marketing, its effectiveness is waning, and the onus is on B2B marketers to develop myriad other marketing channels in order to meet, if not exceed, sales pipeline demands. When it comes to improving marketing effectiveness, having a diversified marketing mix trumps lead generation and nurturing and customer retention/loyalty, perhaps because B2B marketers are beginning to realize that without an integrated marketing plan lead generation and customer loyalty are likely to suffer. And while marketing continues to be the greatest contributor to leads and sales revenue, there is significant room for growth within other marketing channels such as SEM, SEO, social media and display advertising, which are soaring in popularity in B2B sectors. Display advertising is the key to having a robust online marketing program. Here s why: Unlike some of the other marketing channels, display advertising complements the overall marketing mix and reaches the largest possible audience online while providing the greatest precision. Individual marketing channels target a particular stage of the sales funnel for example, social channels are aligned to help raise awareness and get prospects into the sales funnel in the first place whereas display advertising impacts the entire sales funnel, starting from the initial awareness of the products and/or services at hand and proceeding all the way to the purchase. In this white paper we will explore the trend among B2B marketers to develop a more diversified marketing mix in order to meet the demands of the sales pipeline; the ingredients to a successful marketing mix online and the importance of display advertising as part of an integrated marketing strategy BIZO

4 THE STATE OF THE ART It s been several years since integrated marketing became a mantra among B2B marketers. Simply purchasing an advertising schedule from a trade publication (or website) is no longer sufficient in a digital age, when every few months a new technology or media platform emerges that can help B2B marketers get their messages out and reach potential customers and prospects that might otherwise be unavailable to them. Despite the explosion in online marketing channels (blogs, SEO, SEM, social networks) a majority of B2B marketers are still having a tough time creating the kind of marketing mix that will translate to the top and bottom lines. According to the survey, 32% of the respondents said their marketing mix is not meeting sales pipeline demands and 41% said they were unsure or unable to measure how well marketing is meeting the demands of sales. A little more than a third of respondents said their marketing mix was meeting sales pipeline demands and 6% said their marketing mix was exceeding sales pipeline demands. Question: To what degree is your current online marketing mix meeting the demands of your sales pipeline (i.e driving enough leads to meet sales goals)? BIZO

5 THE ONLINE MARKETING CHALLENGE The rise of online marketing presents a conundrum for CMOs and B2B marketers. The Web and, increasingly, mobile devices, such as smartphones and tablets, offer a wide array of opportunities for B2B marketers to build on existing relationships and reach out to prospects who populate in and around their markets. But, at the same time, B2B marketers are grappling with how to establish metrics that can track customers and prospects via online platforms. According to the survey, 55% of CMOs reported inadequate metrics to measure digital marketing results and 63% percent of marketers said that their existing marketing mix does not meet sales demand. A whopping 77% of CMOs aren t even sure of where to reach customers. CMOs struggles to reach more of their target audience is arguably the greatest challenge facing B2B marketers these days because if they don t land new prospects they can t feed the sales pipeline and generate more leads and then marketing budgets will stagnate. Generating more leads (61%) and reaching more of their target audience (48%) were the two biggest marketing challenges for 2012, the survey said. Accurately measuring and attributing online conversions to the correct marketing channels (39%), and elevating their brand online (34%) were also concerns BIZO

6 Finding the right marketing mix is top of mind for a growing number of B2B marketers. Without an effective blend of marketing tools, marketers will leave their audience(s) adrift and may risk throwing good money after bad in their pursuit to find those audiences. Question: What do you consider your greatest online marketing challenges for 2012? Check all that apply. ENHANCING THE MARKETING MIX Marketing Activities with Highest Conversions Let s consider the marketing activities that are working effectively for B2B marketers and leading to sales conversions. Half of the respondents cited as the marketing activity with the highest conversion rate; not hard to understand why when you consider that marketing is well into its second decade and marketers have become conditioned to using it to drive revenue. Yet both display ads (35%) and paid search advertising (36%) were cited by a significant number of respondents as moving the sales needle. Social media was cited ranking #2 by 24% of respondents. Nevertheless, each individual marketing channel has demonstrated that it can fuel positive results and lead to sales conversions; so much the better if marketers can harness all of the channels in unison to achieve higher (and more consistent) conversion rates BIZO

7 Question: Please rank the following in terms of where marketing activities achieve the highest conversions. Rank where 1 is the highest to 4 is the lowest. Since the advent of the Web, marketing has served B2B marketers well. For the foreseeable future, the medium will remain an integral part of most any online marketing strategy. But marketers understand that, if they want to take online marketing to a new (and more profitable) level, they can t put all of their eggs solely into the basket. Being able to locate their audiences online and create new revenue streams require B2B marketers to deploy a full suite of marketing tools. Marketing budgets reflect the trend: Asked which areas they plan to invest time and resources to improve online marketing effectiveness this year, 77% of marketers said improving and diversifying their marketing was a top priority, followed by brand awareness (56%) and ROI accuracy (53%). Customer retention and loyalty was cited by 31% of marketers as an important area. More than half of the respondents (52%) said they wanted to boost thought leadership and 43% said they wanted to boost lead generation and nurturing. Boosting lead-generation rates, of course, is a function of knowing at which stage your customer are in the sales funnel and the kinds of marketing activities to which they will be receptive BIZO

8 Question: In which areas do you plan to invest time and resources to improve your online marketing effectiveness in 2012? Existing Channels and the Demand Gen Dilemma Increased pipeline demands require new approaches to lead generation. While a lot depends, of course, on the target market, marketers need to create an effective blend of online marketing tools, including , SEO, SEM, social media and display advertising, to reach their audiences BIZO

9 PROVIDING IMPACT ACROSS THE MARKETING MIX A closer look into the various stages of the typical sales-and-marketing funnel helps to illustrate the importance of deploying your marketing messages across an array of channels and why display advertising is at the core of an effective marketing mix. Each individual marketing tool specifically correlates to a particular stage of the marketing funnel. Social channels, for example, can help to educate prospects and get them into the sales funnel in the first place. Both marketing and search tools can move customers along from evaluation and down through a legitimate proposal. However, it is display advertising alone that impacts the entire sales funnel, from the initial awareness to evaluation to purchase: Respondents pointed to several benefits of using online display advertising. These benefits include complementing the entire marketing mix (50%) and helping marketers to reach more of their target audience online (48%). But the hallmark of display advertising is that it fuels every single element of the sales-and-marketing compendium. According to the survey, 43% of respondents reported display advertising educates prospects and 42% reported it promotes the brand and thought leadership online (42%). Perhaps most important, 40% of the respondents said display advertising helps to drive leads, while 24% said it helps to engage prospects at optimal buying time; that may seem like a low percentage, from a benefits standpoint, but it is early in the game and marketers have ample room to improve their margins through display advertising BIZO

10 KEY TAKEAWAYS Question: What do you view as the most significant benefits of using online display advertising? Check up to three items. In summary, consider the following based on this study: 4 Current online marketing programs are not meeting the demands of the sales pipeline: 32% of the respondents reported their marketing mix is not meeting sales pipeline demands and 41% reported they were unsure or unable to measure how well marketing is meeting the demands of sales. marketing, while still an effective online marketing tool, is starting to look like a mature channel among B2B marketers. In order to generate more leads and reach more of their target audiences marketers need to diversify the marketing mix and marshal all of the new-media channels that are available to them. 4 In an ever-changing business environment, marketers should be cautious about putting all of their eggs into one marketing basket. Marketing budgets reflect the move among B2B companies away from one channel (e.g. ) and toward a multifaceted approach: 77% of respondents said they plan to invest time and resources to improving and diversifying the marketing mix. A growing sales pipeline demands deploying the full array of online-marketing vehicles, including , SEO, SEM, social media and display advertising. 4 With marketers under growing pressure to achieve marketing ROI, display advertising performs two crucial tasks: it boosts the effectiveness of a company s entire marketing mix and reaches more of its target audience online. What s more, display advertising helps to strengthen B2B marketers efforts across the entire funnel, including educating prospects, promoting the brand and driving new leads BIZO

11 APPENDIX Methodology Maturation of Online Marketing, by BtoB, is based on an online survey conducted in January and February, resulting in 326 completed responses from B2B marketers. Among industry sectors, technology companies predominated the pack, represented by 25% of all respondents, with advertising agencies (26%) and manufacturing in non-technology sectors (11%) also well represented. Financial services companies represented 8% of the respondents while wholesale trade/distribution companies represented 4% of the respondents. CONTRIBUTORS More than a third of the respondents (36%) were senior-level marketers, including directors and managers of marketing, product development and/or communications, while 25% of the respondents were CEOs, presidents, owners and partners of their companies. The titles CMO, EVP, SVP were also represented. 4 John DiStefano, research director, BtoB: 4 Matthew Schwartz, contributing writer, BtoB: ABOUT BTOB BtoB is dedicated to integrated business-to-business marketing. The magazine is read by 100,000 b-to-b marketers, with every issue filled with game-changing strategies and tactics needed for success, including news, analysis, benchmarks and best practices. BtoB also publishes a wide variety of e-newsletters addressing specific areas of b-to-b marketing, and hosts webinars, virtual trade shows and live events. BtoB is published by Crain Communications Inc., which publishes more than 20 business, trade and consumer publications and related websites in North America, Europe and Asia. 4 Advertising offices 711 Third Avenue, 3rd Floor, New York, NY Editorial offices 150 N. Michigan Ave., Chicago, IL Corporate headquarters 1155 Gratiot Avenue, Detroit, MI BIZO

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