B2B Marketing Top Spenders

Transcription

1 1101 Connecticut Ave. NW, Suite 300, Washington, DC P F B2B Marketing Top Spenders MARKET EVALUATION SURVEYING DATA ANALYSIS BENCHMARKING INNOVATIVE PRACTICES LITERATURE REVIEW

2 Introduction At the request of one member, Hanover Research has prepared this report on the top-spending industries and companies in B2B advertising. This report utilizes the list published by BtoB Online of the Top 100 B2B Advertisers of This list is based on data from TNS most recent report on B2B advertising, published in September Part I profiles the top 15 companies from this Top 100 B2B Advertisers list by industry. Hanover has assumed this list will remain largely unchanged over the next couple of years. We have included overall advertising budget data from 2008 as a comparison to the amount each company spends on B2B. Where possible, we also provide ad spend data for 2009 and present news indicating that B2B spending may have changed from 2008 levels. Each profile includes a B2B channel mix chart for the company. Part II is a side-by-side comparison of the top industries and companies in B2B utilizing the rankings. 2 The comparison includes, where available, company rank by revenue within industry, company rank in the 2009 and , 2008 B2B advertising rank, annual revenue data, and overall B2B advertising spend. Part III utilizes information found on company websites and in the news to determine to what extent the top-spending B2B companies and industries focus on the small business market. Part IV presents some higher level data on the B2B advertising market, including predicted channel mix and spending levels across all industry segments. Part I Report Outline Profiles of Top 15 Spenders in B2B Advertising Part II Top Industry and Company Side-by-Side Comparison Part III Small Business Focus Part IV B2B Advertising Trends Appendix Company Contact Information The Appendix consolidates contact data for each of the top 15 companies along with the names and positions of relevant company executives. 1 Top 100 B-to-B Advertisers. BtoB Online Special Report, September 14, For BtoB s write-up of the data, see; Maddox, Kate. Top 100 B2B Advertisers Cut Spending 10.2%. B to B Online. September 14, rankings are based on 2008 revenue data. 2

3 Part I: Top 15 Companies in B2B Advertising In this section, Hanover profiles the top 15 companies on BtoB Online s 2008 B2B Advertising list, broken down by industry. These profiles detail the observed spending patterns of the top 15, including overall advertising spending data and B2B spending by channel. Included are projections about future B2B spending based on more recent advertising data and other pertinent company news. Telecommunications Overall in 2009, the telecommunications industry increased ad spending between 4% and 5% while overall media spending across all industries fell 9%. 3 The biggest companies in the telecommunications industry are Verizon Communications, AT&T, Sprint Nextel, and T-Mobile. They spent over 60% of total advertising funds on TV last year and 12% on digital advertising. 4 Through the first two quarters of 2010, wireless companies alone have spent more than $1.3 billion on advertising. 5 Verizon Communications, AT&T and Sprint Nextel Corp. were all in the top five on 2008 s Top 100 B2B Advertisers list. Deutsche Telekom, owner of the U.S. wireless distributor T-Mobile, was in the top Five other telecom companies were within the top 100. Verizon Communications Verizon Communications was number one on the 2008 Top B2B Advertisers list, maintaining its top ranking from The company spent $357.9 million on B2B advertising, a decrease of 15.3% from Verizon Communications was second in overall U.S. advertising spending in 2008 at $3.7 billion. 7 The following is a breakdown of how Verizon spent its B2B advertising budget in 2008: 3 Upwardly Mobile Ad Budgets. Media Week, 20:18, p GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T &cisb=22_T &treeMax =true&treewidth=0&csi=210549&docno=4 4 Ibid. 5 AT&T Overtakes Verizon Wireless in Ad Spending. Telecom Brokerage, Inc. July 15, Top 100 B-to-B Advertisers, Op. cit. 7 Marketer Database, Op. cit. 3

4 Verizon Communications B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $8,807 Internet $17,409 Network TV $75,743 Spot TV $23,008 Spanish-language TV $9,078 networks Cable TV networks $37,469 Syndicated TV $9,423 Consumer magazines $15,263 Sunday magazines $125 Local magazines $62 Hispanic magazines $122 National newspapers $4,781 Local newspapers $105,826 Hispanic newspapers $1,336 Network spot radio $801 National spot radio $14,997 Local spot radio $15,637 Outdoor $18,059 Total 08 spending $357,935 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Verizon Communications further increased its world-wide advertising budget, spending $1.19 billion in the first two quarters and surpassing perennial advertising leader Procter & Gamble Co. 8 It can be said with confidence that Verizon Communications will continue to be among the top B2B advertisers. AT&T Like Verizon, AT&T maintained the same place in the 2008 Top B2B Advertiser rankings as on the list from Both years, AT&T placed second. In 2008, AT&T spent $328.5 million on B2B, down 14.4% from Also in 2008, AT&T spent a total of $3.1 billion on U.S advertising alone. 10 The following is a break-down of how AT&T spent its B2B advertising budget in 2008: 8 Ad Spending Company Town. September 16, Top 100 B-to-B Advertisers, Op. cit. 10 Marketer Database, Op. cit. 4

5 AT&T B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $3,390 Internet $9,975 Network TV $105,148 Spot TV $21,465 Spanish-language TV $6,640 networks Cable TV networks $35,960 Syndicated TV $5,687 Consumer magazines $11,603 Sunday magazines $23 Local magazines $0 Hispanic magazines $77 National newspapers $4,747 Local newspapers $72,951 Hispanic newspapers $168 Network spot radio $63 National spot radio $6,476 Local spot radio $31,992 Outdoor $12,147 Total 08 spending $328,511 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, During the first quarter of 2010, AT&T out-spent Verizon in advertising for the first time in six years. AT&T spent $500 million to Verizon s $450 million. 11 This may be an indicator that AT&T intends to increase, or at least to maintain levels of advertising spending. Sprint Nextel Co. In 2008, Sprint Nextel fell to fourth from its 2007 ranking at third on the Top 100 B2B Advertisers list. Sprint spent 39% less on B2B advertising in 2008 than in 2007, spending $157.3 million. 12 Sprint spent significantly less on advertising in 2008 than Verizon and AT&T, its top competitors in the telecommunications industry. Sprint spent $1.5 billion on U.S. advertising, less than half of the advertising budgets of the other two companies. 13 The following is a break-down of how Sprint Nextel spent its B2B advertising budget in 2008: 11 AT&T Overtakes Verizon Wireless, Op. cit. 12 Top 100 B-to-B Advertisers, Op. cit. 13 Marketer Database, Op. cit. 5

6 Sprint Nextel Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $4,740 Internet $8,888 Network TV $57,122 Spot TV $1,439 Spanish-language TV $7,269 networks Cable TV networks $19,138 Syndicated TV $322 Consumer magazines $9,539 Sunday magazines $3,553 Local magazines $0 Hispanic magazines $14 National newspapers $6,915 Local newspapers $25,592 Hispanic newspapers $155 Network spot radio $868 National spot radio $1,333 Local spot radio $2,061 Outdoor $8,414 Total 08 spending $157,363 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Sprint Nextel increased its advertising budget. Sprint increased total worldwide advertising spending by 40% in 2009, to an estimated $2.1 billion. 14 Additionally, the rankings for the Top 100 Advertisers in B2B Publications in 2009 show that Sprint jumped to third place from its previous spot at number 13. It was one of the only advertisers on the list to increase spending on print ads, spending a total of $19.3 million, 61% more than the previous year. 15 Deutsche Telekom Deutsche Telekom, of which T-Mobile is a subsidiary, spent $115.6 million on B2B advertising in 2008 and was ranked eighth, up from fourteenth in The company 14 Kharif, Olga. Sprint Nextel s Ad Spending Skyrockets. Bloomberg Businessweek. January 22, Top 100 Advertisers in B-to-B Publications, Op. cit. 6

7 posted a 16.4% increase in B2B spending for the year and was one of only three companies in the top ten of the list to increase ad spending from Though it increased spending from 2007, Deutsche Telekom still spent 67.7% less than the leading telecom company in B2B, Verizon, and 26.5% less than its closest competitor, Sprint Nextel. Deutsche Telekom spent the least on overall advertising in 2008 of any of the four major telecom companies. It was ranked 42 nd for the year, having spent $940.3 million on U.S. advertising. 17 The following is a break-down of how Deutsche Telekom spent its B2B advertising budget in 2008: Deutsche Telekom Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $4 Internet $11,124 Network TV $27,167 Spot TV $6,994 Spanish-language TV $7,214 networks Cable TV networks $13,372 Syndicated TV $8,753 Consumer magazines $1,801 Sunday magazines $0 Local magazines $0 Hispanic magazines $0 National newspapers $2,454 Local newspapers $23,465 Hispanic newspapers $18 Network spot radio $0 National spot radio $1,987 Local spot radio $10,871 Outdoor $373 Total 08 spending $115,597 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In the first quarter of 2010, T-Mobile spent $150 million on overall advertising, an increase of almost 42% from the prior quarter. 18 While it seems as though the company s advertising spending is continuing to increase, the relationship between Deutsche Telekom and its American arm, T-Mobile, is somewhat unstable. T-Mobile has consistently struggled to compete with the leading telecom companies in the United States due to its smaller size. In the last year, T-Mobile has become a problem for Deutsche Telekom and the company has been feeling pressure from stockholders 16 Top 100 B-to-B Advertisers, Op. cit. 17 Marketer Database, Op. cit. 18 AT&T Overtakes Verizon Wireless, Op. cit. 7

8 to make a decision with regard to T-Mobile s future. 19 The company has been considering an IPO and a merger with Sprint Nextel as possible options to unload the financial risk presented by the company. 20 A merger with Sprint Nextel is not yet feasible due to the providers use of different, incompatible technologies for their networks. But as both contemplate a network change to LTE technology in the next two to three years, the merger begins to make more sense. 21 For now, Deutsche Telekom is focusing on gaining customers for the wireless provider. They have so far gained 160,000 customers this year but have spent $330 per new customer, $60 more than last year, without increasing monthly revenue. 22 It seems likely that the company will make some decision about what to do with its American arm soon, and this decision could have a huge impact on B2B advertising plans. Commercial Banks Two commercial banks were in the top 15 of the 2008 Top BtoB Advertisers rankings; JPMorgan Chase & Co. was ranked ninth and Bank of America Corp. was ranked 11 th. 23 The broader financial services industry, including commercial banks, increased advertising spending across almost all media in the first quarter of 2010 following advertising spending declines in 2008 and Overall, there was a 10.5% increase, from $1.9 billion spent in the first quarter of 2009 to $2.1 billion this year. 25 A total of nine commercial banks were in the top 100 of the B2B spending list in JPMorgan Chase & Co. JPMorgan Chase is ranked number nine on the 2008 Top B2B advertisers list, up from the 12 th place spot in 2007 despite a reduction in B2B spending in 2008 by 0.9%. 26 JPMorgan Chase spent $111.6 million on B2B in The same year, the company spent $1.3 billion on U.S. advertising. 28 Overall advertising expenses in 2008 were $1.9 billion, 7.5% less than ad spending in The following is a 19 DT Ponders the Future of T-Mobile USA. Phone +, September 15, Ziegler, Chris. Deutsche Telekom Rumored to be Eyeing T-Mobile USA Spinoff. Engadget, February 4, Parker, Andrew and Paul Taylor. Sprint s 4G Move Opens Way to Merger. Financial Times, July 12, Preuschat, Archibald. Size Matters for T-Mobile, But at What Cost? The Wall Street Journal, August 5, Top 100 B-t-B Advertisers, Op. cit. 24 Hosford, Christopher. Financial Services Advertising Roars Back. BtoB Online, August 16, Ibid. 26 Top B-to-B Advertisers, Op. cit. 27 Ibid. 28 Marketer Database, Op. cit. 29 Form 10-K. JPMorgan Chase and Co. Filed February 24, Securities and Exchange Commission EDGAR Database. 8

9 break-down of how JP Morgan Chase & Co. spent its B2B advertising budget in 2008: JP Morgan Chase & Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $920 Internet $7,603 Network TV $13,700 Spot TV $14,561 Spanish-language TV $542 networks Cable TV networks $8,951 Syndicated TV $10 Consumer magazines $3,731 Sunday magazines $0 Local magazines $9 Hispanic magazines $22 National newspapers $4,253 Local newspapers $32,323 Hispanic newspapers $738 Network spot radio $363 National spot radio $4,709 Local spot radio $13,755 Outdoor $5,426 Total 08 spending $111,616 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, JPMorgan Chase again reduced its advertising spending, this time by a slightly lower 7.1% to $1.77 billion. 30 In the first quarter of 2010, JPMorgan Chase increased advertising spending following the larger financial services and commercial banking trends. Michael Fusco, a spokesman for the company explains, we were strong during the recession and acquired Washington Mutual We had to spend a good amount of money marketing the Chase brand in California and Florida where we had never been before. 31 Even with two consecutive years of reduction in 2008 and 2009, the amount that JP Morgan spends yearly on advertising together with the 30 Ibid. 31 Financial Services Advertising Roars Back, Op. cit. 9

10 fact that it was in the top 15 of B2B advertisers in both 2007 and 2008 make it likely that the company will remain near the top of B2B advertising. Bank of America Corp. Bank of America, ranked 11 th highest B2B advertising spender in 2008, rose to that spot from its year-earlier ranking of 13 th. The company spent $103.6 million on B2B advertising in 2008, 3.0% more than it spent in Also in 2008, Bank of America spent $1.65 billion on U.S. advertising and $2.36 billion overall. 33, 34 The following is a break-down of how Bank of America Corp. spent its B2B advertising budget in 2008: Bank of America Corp. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $1,962 Internet $15,837 Network TV $10,998 Spot TV $13,268 Spanish-language TV $1,693 networks Cable TV networks $6,234 Syndicated TV $208 Consumer magazines $6,977 Sunday magazines $851 Local magazines $62 Hispanic magazines $183 National newspapers $9,503 Local newspapers $30,503 Hispanic newspapers $820 Network spot radio $0 National spot radio $4,255 Local spot radio $267 Outdoor $17 Total 08 spending $103,639 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Bank of America reduced its advertising spending by 18.3% to $1.9 billion. 35 If it follows the trend of other commercial banks, 2010 will be a better year for 32 Top 100 B-to-B Advertisers, Op. cit. 33 Marketer Database, Op. cit. 34 Form 10-K. Bank of America Corp. Filed February 26, Securities and Exchange Commission EDGAR Database Ibid. 10

11 advertising across the board and Bank of America s B2B spend will approximate 2008 levels. Computers, Office Equipment Hewlett-Packard Co., Apple Computer, and Dell are all computer and office equipment companies that placed in the top 15 for 2008 B2B spending. Three others, Xerox, CDW Corporation and Lenovo Group made the top 100 cut. Hewlett-Packard Co. Hewlett-Packard was the sixth highest spender on B2B advertising in The company spent $135.8 million in this market, a 31.6% decrease from 2007 spending. Hewlett-Packard dropped two rankings in the year as a result of this reduction, but even if the same decrease in spending were seen in 2009, HP would most likely still be within the top 10 B2B advertisers in the country. 36 Hewlett-Packard spent a total of $412.1 million on overall U.S. advertising in The following is a break-down of how Hewlett-Packard Co. spent its B2B advertising budget in 2008: Hewlett-Packard Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $29,833 Internet $34,906 Network TV $18,596 Spot TV $54 Spanish-language TV $373 networks Cable TV networks $12,896 Syndicated TV $90 Consumer magazines $19,708 Sunday magazines $3,216 Local magazines $0 Hispanic magazines $133 National newspapers $8,999 Local newspapers $3,004 Hispanic newspapers $20 Network spot radio $0 National spot radio $1,815 Local spot radio $1,934 Outdoor $265 Total 08 spending $135, Top 100 B-to-B Advertisers, Op. cit. 37 Marketer Database, Op. cit. 11

12 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Hewlett-Packard made the Top 100 list for spending on ads in B2B publications, having spent $10.2 million on the year. 38 This is a decrease of 65.8% from the amount that HP spent on business publications in This cannot necessarily be taken as a sign that HP cut back on all B2B spending in 2009, since trends show reductions in print ad spending across all industries. Apple Computer Apple came in 12 th on the 2008 Top B2B Advertisers list. Apple spent $100.3 million on B2B advertising, up 29.5% from 2007, moving it up nine places on the chart, the most movement by any company in the top B2B ads account for 20.6% of the total $486 million Apple spent on all advertising in The following is a breakdown of how Apple spent its B2B advertising budget in 2008: Apple Computer B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $1,590 Internet $522 Network TV $74,841 Spot TV $92 Spanish-language TV $0 networks Cable TV networks $7,455 Syndicated TV $0 Consumer magazines $2,185 Sunday magazines $179 Local magazines $0 Hispanic magazines $0 National newspapers $964 Local newspapers $11 Hispanic newspapers $0 Network spot radio $0 National spot radio $66 Local spot radio $1,106 Outdoor $11,346 Total 08 spending $100,354 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, Top 100 Advertisers in B-to-B Publications, Op. cit. 39 Top 100 B-to-B Advertisers, Op. cit. 40 Elmer-DeWitt, Philip. Apple s 2009 Ad Budget: Half a Billion., October 28,

13 In 2009, Apple spent $501 million on advertising, $15 million more than in Dell Dell was number 15 on the 2008 B2B ad spend rankings, having spent $83.9 million. This was a decrease of 26.5% from 2007, causing Dell to fall four places in the rankings. In 2008, Dell spent $538.2 million on U.S. advertising. 42 That year, the company spent $943 million on advertising world-wide. 43 B2B accounted for 8.9% of this spending. The following is a break-down of how Dell spent its B2B advertising budget in 2008: Dell B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $14,358 Internet $10,615 Network TV $12,069 Spot TV $455 Spanish-language TV networks $0 Cable TV networks $7,663 Syndicated TV $3 Consumer magazines $16,494 Sunday magazines $4,330 Local magazines $0 Hispanic magazines $103 National newspapers $8,212 Local newspapers $9,238 Hispanic newspapers $1 Network spot radio $292 National spot radio $13 Local spot radio $20 Outdoor $53 Total 08 spending $83,917 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Dell spent $811 million on overall advertising, which was a decrease of $132 million from , 45 Dell s advertising expenses decreased by approximately $ Ibid. 42 Marketer Database, Op. cit. 43 Form 10-K. Dell. Filed February 18, Securities and Exchange Commission EDGAR Database Apple s 2009 Ad Budget: Half a Billion, Op. cit. 13

14 million year-over-year from 2009 to $619 million in In the last three fiscal years, Dell has consistently decreased its advertising budget by upwards of $100 million per year. Computer Software There were five computer software companies among the Top 100 B2B Advertisers from 2008, but only one, Microsoft Corp., was in the top 15. Microsoft Corp. Microsoft Corp. came in at number five on the 2008 Top B2B Advertisers rankings. Microsoft spent $148.8 million on B2B advertising in 2008, 7% more than they spent the year before in This raised the company two places in the rankings, from seventh to fifth. 47 Microsoft was 49 th in the nation in overall U.S. advertising spending in The company spent $802.3 million total. 48 That year, Microsoft spent $1.2 billion on worldwide advertising. 49 B2B accounted for 12.4% of that total. The following is a break-down of how Microsoft spent its B2B advertising budget in 2008: Microsoft Corp. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $45,905 Internet $11,966 Network TV $25,884 Spot TV $406 Spanish-language TV $0 networks Cable TV networks $16,954 Syndicated TV $8,154 Consumer magazines $18,006 Sunday magazines $354 Local magazines $0 Hispanic magazines $11 National newspapers $5,698 Local newspapers $2,060 Hispanic newspapers $0 Network spot radio $37 45 Form 10-K. Dell, Op. cit. 46 Ibid. 47 Top 100 B-to-B Advertisers, Op. cit. 48 Marketer Database, Op. cit. 49 Form 10-K. Microsoft Corporation. Filed June 30, Securities and Exchange Commission EDGAR Database. 14

15 National spot radio $847 Local spot radio $7,770 Outdoor $4,820 Total 08 spending $148,870 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Microsoft Corp. was second on the overall list of advertising spending in B2B publications. The company spent $20.6 million on this form of advertisement. 50 This was only a small portion of the $1.4 billion spent on total worldwide advertising in Total ad expenditures were up again in 2010, reaching $1.6 billion for the fiscal year. 52 Diversified Financials Only one diversified financials company, General Electric Co., was in the top 15 of 2008 s Top B2B Advertisers Rankings. GE came in at number seven. Three others were in the top 100. General Electric Co. General Electric was seventh on the 2008 Top 100 B2B Advertisers ranking. GE spent $117 million that year, up 19.3% from This represents the largest increase in spending of any company in the top 10. In 2008, GE spent $2 billion on U.S. advertising. 54 The company also spent 17.3% more on measured media advertising in 2008 than in The following is a break-down of how General Electric spent its B2B advertising budget in 2008: General Electric Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $19,100 Internet $1,646 Network TV $66,514 Spot TV $24 Spanish-language TV $0 networks Cable TV networks $9,988 Syndicated TV $0 50 Top 100 Advertisers in B-to-B Publications, Op. cit. 51 Form 10-K. Microsoft Corporation, Op. cit. 52 Ibid. 53 Top 100 Advertisers in B-to-B Publications, Op. cit. 54 Marketer Database, Op. cit. 55 U.S. Ad Spend Down 9.2% in Q4. Seeking Alpha, May 7,

16 Consumer magazines $12,058 Sunday magazines $0 Local magazines $33 Hispanic magazines $48 National newspapers $3,456 Local newspapers $3,060 Hispanic newspapers $3 Network spot radio $39 National spot radio $4 Local spot radio $24 Outdoor $1,004 Total 08 spending $117,000 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, General Electric continued to raise its overall advertising budget in the first half of 2009, increasing spending by 5.1% to $548.3 million. 56 In the first quarter of 2010, General Electric again raised its advertising budget, this time spending 1.3% more than the same quarter last year. 57 Mail, Package and Freight Delivery A total of two mail, package and freight delivery companies were on the Top 100 B2B Advertisers list, and both of these, UPS and FedEx, were in the top 15. United Parcel Service of America UPS was ranked 10 th on 2008 s Top B2B Advertisers list, having spent $106.7 million throughout the year. This was 11.1% less than UPS spent on B2B in The following is a break-down of how UPS spent its B2B advertising budget in 2008: United Parcel Service of America B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $374 Internet $31,364 Network TV $40,899 Spot TV $161 Spanish-language TV $0 networks 56 Ad Spending 2009, Op. cit. 57 Elliott, Stuart. Ad Spending Turns Up in First Quarter, Tracking Service Says, After Many Quarters of Declines. Media Decoder, May 26, Top 100 B-to-B Advertisers, Op. cit. 16

17 Cable TV networks $13,548 Syndicated TV $0 Consumer magazines $6,696 Sunday magazines $0 Local magazines $2 Hispanic magazines $34 National newspapers $1,081 Local newspapers $903 Hispanic newspapers $3 Network spot radio $796 National spot radio $3,748 Local spot radio $6,913 Outdoor $248 Total 08 spending $111,616 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, Due to the recession, UPS reported its sixth consecutive quarter of lower package volume in the United States in July of last year, reducing its revenue and likely reducing its advertising spending. 59 UPS may have fallen again in the rankings in 2009, but due to the nature of the company, B2B advertising will always be significant component of its advertising strategy. FedEx Corp. FedEx Corp. fell to 14 th on the B2B Advertising chart after having been ranked 8 th in The company spent $89.2 million on B2B advertising, 26.1% less than the previous year, even though the company increased its overall advertising budget from In 2007, FedEx spent a total of $406 million on advertising and in 2008, the company increased this budget by 9.6% to $445 million. 61 The following is a breakdown of how FedEx spent its B2B advertising budget in 2008: FedEx Corp. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $247 Internet $7,816 Network TV $59,409 Spot TV $ Elliott, Stuart. Delivering Something Extra. The New York Times, September 23, Top 100 B-to-B Advertisers, Op. cit. 61 Form 10-K. FedEx Corporation. Filed July 15, Securities and Exchange Commission EDGAR Database. 17

18 Spanish-language TV $0 networks Cable TV networks $13,435 Syndicated TV $0 Consumer magazines $1,307 Sunday magazines $0 Local magazines $9 Hispanic magazines $295 National newspapers $4,026 Local newspapers $1,107 Hispanic newspapers $289 Network spot radio $0 National spot radio $68 Local spot radio $96 Outdoor $469 Total 08 spending $89,220 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, FedEx s overall advertising budget decreased by 14.8% in 2009 to $379 million, and again in 2010, though only by 1.3% to $374 million. 62 It seems probable that FedEx has fallen out of the top 15 in the rankings, given the fact that even in a year that the company increased its overall advertising spending by 9.6% (2008) it decreased B2B spending by 26.1%. Airlines Four airlines appear on the Top 100 B2B Advertisers list, but only Southwest Airlines is in the top 15. This is particularly interesting due to the fact that of the four airlines, Southwest had the lowest yearly revenue, yet spent the most on B2B advertising. Southwest Airlines Southwest Airlines rose to 19 th on the 2008 Top 100 B2B Advertisers list from eighth place in To earn the higher ranking, Southwest increased B2B advertising spending by 16.4% in 2008 to $96.8 million. 63 That year, Southwest also increased its overall advertising spending by 4.18% from $191 million in 2007 to $199 million in The following is a break-down of how the company spent its B2B advertising budget in 2008: 62 Form 10-K. FedEx Corporation. Filed July 15, Securities and Exchange Commission EDGAR Database Top 100 B-to-B Advertisers, Op. cit. 64 Form 10-K. Southwest Airlines Co. Filed July 15, Securities and Exchange Commission EDGAR Database. 18

19 Southwest Airlines Co. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $442 Internet $3,656 Network TV $48,100 Spot TV $13,879 Spanish-language TV $7,476 networks Cable TV networks $4,603 Syndicated TV $7 Consumer magazines $2,746 Sunday magazines $0 Local magazines $0 Hispanic magazines $151 National newspapers $2,257 Local newspapers $2,116 Hispanic newspapers $24 Network spot radio $1,340 National spot radio $3,674 Local spot radio $3,458 Outdoor $2,913 Total 08 spending $96,838 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, Southwest again increased its overall advertising spending, this time by 2.5% to $204 million. 65 Based on this, it is likely that Southwest has continued to increase its B2B spending, though perhaps not by quite as much as in Information Technology Services On the 2008 list of the Top 100 B2B Advertisers, IBM Corp. is in the top IBM is in fact the only information technology services company in the top 100. IBM Corp. IBM Corp. came in at third on the 2008 B2B Advertisers ranking. In that year, IBM spent $158.9 million on B2B advertising, which was an 11.9% drop in spending from Still, IBM increased in ranking in 2008, rising from fifth to third. 67 In 2008, IBM Corp. was 81 st in the country for overall advertising spending. IBM spent $ Ibid. 66 Ibid. 67 Ibid. 19

20 million on advertising in the U.S. 68 The following is a break-down of how IBM spent its B2B advertising budget in 2008: IBM Corp. B2B Channel Mix 2008 Category Ad Spending ($000) Business Publications $50,680 Internet $9,313 Network TV $33,785 Spot TV $54 Spanish-language TV networks $0 Cable TV networks $17,394 Syndicated TV $36 Consumer magazines $26,651 Sunday magazines $0 Local magazines $0 Hispanic magazines $178 National newspapers $9,505 Local newspapers $7,347 Hispanic newspapers $0 Network spot radio $63 National spot radio $1,213 Local spot radio $166 Outdoor $2,504 Total 08 spending $158,889 Source: Top B-to-B Advertisers. BtoB Online Special Report, September 14, In 2009, IBM Corp. decreased spending on B2B publications to $40.9 million. IBM was still first in a 2009 ranking of the Top 100 B2B Advertisers in Print published by BtoB Media Business and based on information from IMS (Inquiry Management Systems). 69 Part II: Side-by-Side Industry and Company Comparison Based on 500 and Top B2B Rankings Marketer Database, Op. cit. 69 Top 100 Advertisers in B-to-B Publications. Media Business, May 2010, P. 7. For BtoB s write-up of the rankings, see; Maddox, Kate. Top 100 Advertisers in B2B Publications. BtoB Online, April 30, ABUSINESS 70 This chart compares industries and companies based on both rankings that use 2008 revenue data, and the 2008 Top 100 B-to-B Advertisers list. Companies that are in the top 100 of the latter are bolded. Industries are ordered according to the total combined B2B spend of all the individual companies. 20

21 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) 78 Telecommunications: 79 companies in the Top 100 of B2B spent a combined total of $1.11 billion AT&T 124, Verizon Communications 97, Sprint Nextel 35, Comcast 34, DirecTV Group 19, Qwest Communications 13, DISH Network 11, Liberty Global 10, Virgin Media 7, Cablevision Systems 7, Charter Communications 6, Embarq 6, Telephone & Data Systems 5, Deutsche Telekom Research In Motion Vonage Holdings Corp Metro PCS Communications Commercial Banks: 80 spent $ million Bank of America 113, Corp Citigroup 112, From the 500 rankings released in May 2009, revenue and profit data used to determine Rankings are from fiscal year 2008 and are therefore the most relevant data for comparison to the B2B list from that year. 72See footnote CNN Money, From the 500 rankings released in May 2010, revenue and profit data used to determine the Rankings are from FY CNN Money, Top 100 B-to-B Advertisers, Op. cit , Op. cit. 78 Top 100 B-to-B Advertisers, Op. cit. 79 Industries: Telecommunications CNN Money, Industries: Commercial Banks CNN Money,

22 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) J.P. Morgan Chase & Co. 101, Morgan Stanley 62, Goldman Sachs Group 53, Wells Fargo 51, GMAC 35, American Express 31, U.S. Bancorp 19, Capital One Financial 17, Bank of New York Mellon Corp. 16, State Street Corp. 12, SunTrust Banks 12, BB&T Corp PNC Financial 9, Services Group Regions Financial 9, Fifth Third Bancorp 8, KeyCorp 6, CIT Group 6, Northern Trust Corp. 5, ING Group HSBC Holdings Barclays Computers, Office Equipment: 81 spent $ million Hewlett-Packard 111, Dell 61, Apple 32, Xerox 17, Sun Microsystems 13, Pitney Bowes 6, NCR 5, CDW Corporation Lenovo Group Computer Software: 82 spent $ million 81 Industries: Computers, Office Equipment CNN Money,

23 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) Microsoft 60, Oracle 22, Symantec 5, CA 4, Electronic Arts 3, Intuit 3, Citrix Systems McAfee Ascentive Diversified Financials: 85 spent $ million General Electric 183, Fannie Mae 22, International Assets Holding 18, Freddie Mac 12, Marsh & McLennan 11, Aon 8, SLM 7, Ameriprise Financial 7, Blackstone Group H Group Holding Hotels, Casinos, Resorts: 86 spent $ million Marriott International 12, Harrah s Entertainment 10, MGM Mirage 7, Starwood Hotels & Resorts 5, Wyndham Worldwide Corp. 4, Intercontinental Hotels Group Industries: Computer Software CNN Money, Intuit is not ranked in the 500, but does appear in the 1000 list from the same year. 84 Formerly known as Network Associates the company name that appears on the Top B2B Advertisers list. 85 Industries: Diversified Financials CNN Money, Industries: Hotels, Casinos, Resorts CNN Money, Wyndham Worldwide is not among the 500 of 2009, but it did make the 1000 list of that year. 23

24 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Choice Hotels International Best Western International Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) Health Care: Insurance and Managed Care: 88 spent $ million UnitedHealth Group 81, WellPoint 61, Blue Cross & Blue Shield Association Aetna 30, Humana 28, Cigna 19, Health Net 15, Coventry Health Care 11, WellCare Health Plans 6, Universal American 4, Kaiser Permanente Mail, Package, and Freight Delivery: 90 spent $ million United Parcel Service 51, FedEx 37, Internet Services and Retailing: 91 spent $ million Google 21, Amazon.com 19, Liberty Media 10, ebay 8, Yahoo 7, Expedia 2, Monster Worldwide CareerBuilder United Internet Airlines: 93 spent $ million 88 Industries: Health Care: Insurance and Managed Care CNN Money, WellPoint is the largest provider within the Blue Cross & Blue Shield network. 90 Industries: Mail, Package, and Freight Delivery CNN Money, Industries: Internet Services and Retailing CNN Money, Expedia is not ranked in the 500 in 2009, but does appear in the top 1000 companies. 93 Industries: Airlines CNN Money,

25 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) AMR 23, Delta Air Lines 22, UAL 20, Continental Airlines 15, US Airways Group 12, Southwest Airlines 11, Insurance: Life, Health (stock): 94 spent $ million Metlife 55, Prudential Financial 29, Aflac 16, Unum Group 9, Genworth Financial 9, Principal Financial 9, Lincoln National 9, Conseco 4, Cinergy Health Insurance: Property and Casualty (stock): 96 spent $ million Berkshire Hathaway 107, Allstate 29, Liberty Mutual Insurance Group 28, Travelers Cos. 24, Nationwide 19, Leows 14, Chubb 13, United Services Automobile Association 12, Progressive 12, AIG, American International Group 11, Hartford Financial Services 9, Assurant 8, American Family Insurance Group 6, Industries: Insurance: Life, Health (stock) CNN Money, Conseco was not ranked on the 500 list from 2009 but was within the 1000 that year, and does appear on the 500 in Industries: Insurance, Property and Casualty (stock) CNN Money,

26 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) First American Corp. 6, W.R. Berkley 4, Information Technology Services: 97 spent $158.9 million IBM 103, Computer Sciences 16, SAIC 10, Affiliated Compter Srvcs 6, Unisys 5, Financial Data Services: 98 spent $ million First Data 8, Discover Financial Services 7, Visa 6, SunGard Data Systems 5, Western Union 5, MasterCard 4, Fiserv 4, Experian Group Specialty Retailers: 100 spent $ million Costco Wholesale 72, Home Depot 71, Lowe s 48, Best Buy 40, Staples 23, TJX 19, Gap 14, Office Depot 14, Toys R Us 13, Circuit City Stores 11, BJ s Wholesale Club 10, Limited Brands 9, GameStop 8, OfficeMax 8, Pantry 8, Industries: Information Technology Services CNN Money, Industries: Financial Data Services CNN Money, The Top B2B list specifies the company name as MasterCard International. 100 Industries: Specialty Retailers CNN Money,

27 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) TravelCenters of America 7, Bed Bath & Beyond 7, AutoZone 6, Ross Stores 6, Blockbuster 5, Foot Locker 5, Barnes & Noble 5, Advance Auto Parts 5, PetSmart 5, Big Lots 4, Dollar Tree 4, Insurance: Property and Casualty (mutual): 101 spent $96.96 million State Farm Insurance Cos. Auto-Owners Insurance Zurich Financial Services Group , Automotive Retailing, Services: 103 spent $87.87 million AutoNation 14, Penske Automotive Group 11, Hertz Global Holdings 8, CarMax 8, Sonic Automotive 7, Avis Budget Group 5, Group 1 Automotive 5, Diversified Outsourcing Services: 104 spent $79.70 million Ashbury Automotive Group Enterprise Rent-A- Car Co. 4, Industries: Insurance: Property and Casualty (mutual) CNN Money, B2B ranking is specifically for State Farm Mutual Auto Insurance Co., the parent of the State Farm family of companies according to this State Farm website ( 103 Industries: Automotive Retailing, Services CNN Money,

28 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) Aramark 13, Automatic Data Processing 8, Accenture Pythian Group infogroup Entertainment: 106 spent $67.17 million Time Warner 46, Walt Disney 37, News Corp. 32, Viacom 14, CBS 13, CC Media Holdings 6, Sony Corp Miscellaneous: 107 spent $72.24 million M 25, Mohawk Industries 6, Siemens Samsung Group Network and Other Communications Equipment: 108 spent $44.1 million Cisco Systems 39, Motorola 30, Qualcomm 11, Corning 5, Harris 5, Oil and Gas Equipment, Services: 109 spent $43.48 million Halliburton 18, National Oilwell Varco 13, Baker Hughes 11, Smith International 10, Industries: Diversified Outsourcing Services CNN Money, Formerly known as InfoUSA the company name that appears on the Top B2B Advertisers list. 106 Industries: Entertainment CNN Money, Industries: Miscellaneous CNN Money, Industries: Network and Other Communications Equipment CNN Money, Industries: Oil and Gas Equipment, Services CNN Money,

29 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) Cameron International 5, BJ Services 5, FMC Technologies 5, American Petroleum Institute Electronics, Electrical Equipment: 110 spent $40.60 million Emerson Electric 25, Whirlpool 18, General Cable 6, Rockwell Automation 5, American Power Conversion Corp Sharp Corp Chemicals: 112 spent $39.62 million Dow Chemical 57, DuPont 31, PPG Industries 15, Monsanto 11, Air Products & Chemicals 10, Praxair 10, Huntsman 10, Mosaic 9, Rohm & Haas 9, Ashland 8, Sherwin-Williams 7, Eastman Chemical 6, Celanese 6, Avery Dennison 6, Ecolab 6, Hexion Specialty Chemicals 6, Lubrizol 5, Industries: Electronics, Electrical Equipment CNN Money, American Power Conversion Corp. is a subsidiary of Schneider Electric and is now known as the Critical Power and Cooling Services Business Unit. 112 Industries: Chemicals CNN Money,

30 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) BASF Energy: 113 spent $37.91 million Constellation Energy 19, AES 16, American Electrc Power 14, Integrys Energy Group 14, Reliant Energy 12, Williams 12, Energy Future Holdings 11, Calpine 9, Global Partners 9, NRG Energy 6, UGI 6, Vestas Wind Systems Semiconductors and Other Electronic Components: 114 spent $37.3 million Intel 37, Jabil Circuit 12, Texas Instruments 12, Sanmina-SCI 9, Applied Materials 8, Advanced Micro Devices 5, Micron Technology 5, Freescale Semiconductor 5, Broadcom 4, Computer Peripherals: 115 spent $28.63 million EMC 14, Western Ditigal 8, Industries: Energy CNN Money, Industries: Semiconductors and Other Electronic Components CNN Money, Industries: Computer Peripherals CNN Money,

31 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) Canon Forest and Paper Products: 116 spent $25.19 million International Paper 24, Weyerhaeuser 11, AbitibiBowater 6, Domtar 6, Boise Cascade 2, Holdings Food Production: 119 spent $21.87 million Archer Daniels Midland 69, Tyson Foods 28, Smithfield Foods 14, Pilgrim s Pride 8, * Cargill Waste Management: 121 spent $20.8 million Waste Management 13, Insurance: Life, Health (mutual): 122 spent $14.60 million New York Life Insurance 31, TIAA-CREF 29, Northwestern Mutual 21, Massachusetts Mutual Life 18, Insurance Guardian Life Ins. Co. of America Thrivent Financial for Lutherans 9, , Industries: Forest and Paper Products CNN Money, Boise Cascade Holdings is not within the 500 but does appear on the 1000 list from Top B2B ranking is for Boise Cascade Products Corp. a subsidiary of Boise Cascade Holdings. 119 Industries: Food Production CNN Money, Were Cargill publicly held, it would rank on the 500. As it stands, Cargill is the largest privately owned company in the United States. 121 Industries: Waste Management CNN Money, Industries: Insurance; Life, Health (mutual) CNN Money,

32 500 Rank within Industry Overall Rank , Rank ,75 B2B Advertisers Rank Company Name Western & Southern Financial Group Total Revenue 2008 ($millions) 77 Total B2B Advertising Spend 2008 ($ millions) 78 5, Railroads: 123 spent $14.36 million Burlington Northern Santa Fe 18, Union Pacific 17, CSX 11, Norfolk Southern 10, Part III: Small Business Focus Almost all of the companies profiled by this report have relationships with the small business market and offer tailored services and marketing campaigns. For this third section of the report, Hanover examines the small business offerings of companies in the top 15 industries on the preceding chart. As these are the industries and companies with the highest B2B advertising spend, it follows that they may also be the most focused on small business advertising. Telecommunications Small business marketing is common among telecommunications companies as the services they offer are attractive to businesses of all sizes. In fact, it has become the norm among these companies to offer tailored services for small businesses. Verizon Communications has perhaps the most aggressive small business marketing strategies, 123 Industries: Railroads CNN Money,

33 but AT&T and Sprint Nextel also provide services specific to the small business sector. Verizon Communications Verizon has a clear focus on small businesses as a part of its B2B advertising strategy. The company offers a Freedom for Business package that it promoted via TV, print, and online channels in 2008, and ran a TV campaign called Fingers to promote its high-speed Internet specifically to small businesses. 124 The small-business audience represented approximately 1.6 million customers for Verizon in The company also supports a group that focuses specifically on small-business advertising, and has a Vice President of Small-business Marketing, Monte Beck. 126 In April of 2009, Beck oversaw the relaunch of the Verizon Small Business Center, a portal that pools and news, the Verizon Collaboration Center, a fee-based service for video conferencing and file sharing and the Business Link Reward Program that offers discounts from partners like Office Depot and FedEx. 127 They advertise the Small Business Center online and in print and by offering webinars on pertinent business issues. 128 Verizon also advertises FiOS TV, FiOS Internet Service and bundled packages to small businesses in online, radio, print and TV channels. 129 AT&T Like Verizon, AT&T has an array of small-business solutions that it markets accordingly. 130 In May of this year, AT&T launched two new web hosting and design plans marketed to small businesses building websites. 131 AT&T also has an Executive Vice President of Small Business Solutions, Cathy Martine, operating in the umbrella 124 Top 100 B-to-B Advertisers, Op. cit. 125 Ibid. 126 Monte Beck, VP-small-business Marketing, Verizon Telecom. BtoB Online, October 26, Ibid. 128 Ibid. 129 Ibid. 130 Small Business Services. AT&T Lee, Justin. AT&T Launches New Small Business Hosting Plans. Web Host Industry Review, May 12, &utm_campaign=feed:+thewhir+(thewhir.com+-+daily+web+hosting+news) 33

34 department, Business Solutions. 132 Ronald E. Spears is the President and Chief Executive Officer of AT&T Business Solutions. 133 Sprint Nextel In its annual 10-K filing, Sprint explains one facet of its relationship with small business customers: We use a variety of sales channels to attract new subscribers of wireless services, including: indirect sales agents that primarily consist of local and national non-affiliated dealers and independent contractors that market and sell services to small businesses and the consumer market, and are generally paid through commissions. 134 Like the other Telecom companies profiled by this report, Sprint offers an array of small-business services. 135 Sprint Nextel has a generalized Business Markets division, the president of which is Paget L. Alves. 136 There does not appear to be a division on this level focused on small business alone. Deutsche Telekom Deutsche Telekom, based in Germany, does target small businesses with certain programs and partnerships. Most recently, the International Carrier Sales & Solutions division of Deutsche Telekom partnered with CommuniGate Systems to deliver the MyCommsuite offering to carriers looking to do business with SMB customers. 137 MyCommsuite provides carriers with a suite of SMB applications that minimizes carrier investment and allows carriers to offer individual telecom solutions under their own brand. 138 T-Mobile, the American wireless company owned by Deutsche Telekom does not, however, offer any special packages or deals for small businesses. 139 Commercial Banks Commercial banks are also uniquely situated to cater to the small business market, offering tailored loans, credit cards, and other such services. JPMorgan Chase and Co. 132 Cathy Martine. SBA National Small Business Week Form 10-K. AT&T. Filed February 25, Securities and Exchange Commission EDGAR Database. p k&dateb=&owner=exclude&count= Form 10-K. Sprint Nextel Corp. Filed February 26, Securities and Exchange Commission EDGAR Database. p Sprint Nextel Form 10-K. Sprint Nextel Corp., Op. cit., p CommuniGate Systems Parners with Deutsche Telekom International Carrier Sales & Solutions (ICSS) to Deliver Secure Unified Communications as a Service and White-Label BlackBerry Style Services to Carriers. TMC News, August 16, Ibid. 139T-Mobile. 34

35 JPMorgan Chase consistently markets credit cards for small businesses. The most recent of these, Ink, comes with a new advertising campaign featuring real-life Ink customers. 140 Ink has also been promoted via television, print, newspaper, online, events, public relations, and direct marketing. 141 JP Morgan Chase has also recently offered lower interest rates on loans to small businesses that make new hires. 142 Bank of America Co. Bank of America also has programs and opportunities marketed specifically towards small businesses. The bank made a commitment to increase lending to small and midsized businesses by $5 billion in 2010 and is so far surpassing that goal. 143 Bank of America also supports a small business online community. 144 The company s 10-K refers to the breadth of its small business support: We offer industry-leading support to approximately four million small business owners. 145 The company has a President of Consumer, Small Business and Card Banking, Joe L. Price. 146 Computers, Office Equipment Technology companies see small and medium businesses as a way to continue sales growth even in times of economic stress. They also serve as new markets once the bigger companies have been saturated with technological products. 147 Therefore, many technology companies have specific programs and campaigns targeted at small businesses. Apple s new small business campaign and Dell s distinct SMB business unit are the stand-outs in this category. Hewlett-Packard Co. At Hewlett-Packard, interactions with small businesses are not always direct but sometimes occur through a series of distributors and resellers. However, HP does have a designated unit in its company to consolidate these dealings: PSG [Personal 140 Ink from Chase Launches New Advertising Campaign Featuring Real-Life Ink Business Card Customers. JPMorgan Chase &Co., June 30, Chase Unveils New Marketing Campaign to Support Small Businesses. SmartBrief, October 1, Rubin, Courtney. JP Morgan Offers Discount to Small Businesses That Hire. Inc. June 30, Prial, Dunstan. Bank of America Increases Loans to Small Businesses. Fox Small Business Center, July 27, Small Business Online Community. Bank of America Co Form 10-K. Bank of America Corp., Op. cit., p Ibid, p Sherman, Erik. Why Dell s Small Business Growth Strategy Could Backfire. BNet, March 30,

36 Systems Group] manages SMB customer relationships and commercial reseller channels In addition, PSG manages direct online sales through the Consumer Exchange and the Small Business Exchange. 148 HP also maintains an SMB Advisory Council, made up of executives from HP s resellers and partner companies, to sustain relationships with these companies and with the small and medium-sized businesses they reach. 149 Apple Like the rest of the technology companies considered in this report, Apple markets technology solutions specific to businesses of all sizes. 150 On its business website, Apple also highlights solutions for start-ups and business news articles published by other outlets, such as Computerworld s article, Apple s Mac Mini server ideal for the small office. 151 Apple s website advertises Mac product and software solutions for marketing a small business. 152 An article published by The Wall Street Journal in July of this year reports Apple s recent push to expand their small business customer base. 153 The article explains, Apple is targeting smaller, local businesses that it can reach through its chain of nearly 300 retail stores. 154 Each of these stores already has one salesman dedicated to local business accounts, and Apple is hiring new engineers in a dozen of these retail stores to work on computer systems engineered specifically for small businesses. 155 Dell Dell is one technology company that is particularly focused on the small business market. They offer several products that are tailored to small business needs such as the Vostro line of notebook and desktop computers and the Dell Download Store. 156 Dell is one of the few companies profiled that has designated a specific business sector for small business work: SMB, or Small and Medium Business, is one of the four main business segments of the company. 157 The President of Consumer, Small and Medium Business, Stephen J. Felice, leads this business segment in its dealings with Dell s more than 72 million small and medium-sized business customers around 148 Form 10-K. Hewlett-Packard Co. Filed December 17, Securities and Exchange Commission EDGAR Database SMB Advisory Council Bios. HP Channel News Apple Business Faas, Ryan. Apple s Mac Mini Server Ideal for the Small Office. Computerworld, March 16, Apple. Small Business Marketing Apple Seeks Growth Beyond Consumers, Op. cit. 154 Ibid. 155 Ibid. 156 Form 10-K. Dell, Op. cit., p Ibid, p

37 the world. 158 In 2010, SMB brought in 23% of Dell s total net revenue, and the divisional operating income was 9% of revenue, making it the second-highest performing business unit in the company. 159 Dell has recently adopted new programs to encourage small business spending, such as offering interest-free deals to those businesses that purchase $25,000 or more worth of products. 160 Computer Software As with computers and office equipment, computer software is in high demand at businesses of all sizes. It behooves companies such as Microsoft to cater to all manner of clientele, including small businesses, however Microsoft is the only computer software company on the that is also a top B2B spender. Microsoft Corporation Microsoft offers a small business online Startup Center with information on how to start a small business and embedded advertisements for Microsoft products. 161 Microsoft s K report explains that sometimes the work of contacting small businesses is contracted out: Although each type of reselling partner reaches organizations of all sizes, LARs [large account resellers] are primarily engaged with large organizations. Distributors resell primarily to VARs [value-added resellers] and VARs typically reach the small-sized and medium-sized organizations some of our largest resellers include CDW, Dell, Insight Enterprises, and Software House International. 162 Other Computer Software Companies The other computer software companies on the Top 100 B2B Advertisers list also cater in some way to small businesses. Intuit is a software company established specifically for small businesses. Intuit provides personal finance software for small businesses in addition to providing webhosting, marketing, and payroll services for these clients. 163 Citrix Systems offers a secure remote access software solution to small and mid-size businesses called XenApp Fundamentals. 164 McAfee has a dedicated small business store and a small business support website. 165, Ibid, p Why Dell s Small Business Growth Strategy Could Backfire, Op. cit. 160 Ibid. 161 Microsoft Startup Center Form 10-K. Microsoft Corporation, Op. cit., p Intuit Simple, Secure Remote Access for Small and Medium Businesses. Citrix Systems http://shop.mcafee.com 37

38 Diversified Financials Diversified financial companies may also have an interest in small businesses, as they may offer loans or financing programs tailored to business size. Oftentimes though these companies are more interested in dealings with larger businesses where the profit margins are higher. On its finance website, General Electric offers the example of how a small business in Dallas, TX used GE capital to weather the recession. 167 GE is the sole diversified financials company on the Top B2B Advertisers list that advertises to small businesses on its website. Hotels, Casinos, and Resorts Of this industry, hotels are the companies most involved in B2B advertising, and therefore most focused on small businesses. Hotels market to small businesses for the same reasons that they market to large businesses: any business that requires employees to travel for conferences or meetings will need to rent hotel rooms or conference rooms for those purposes. It is highly common for the hotels on the Top 100 B2B Advertisers list to include small businesses in marketing materials intended to attract business travelers. Marriott International Marriott specifically mentions the small business clientele in the Meetings & Events section of its website. 168 Marriott International offers a broad range of hotels and brands in order to cater to the varied needs of its customers, including small business travelers. One such brand, Fairfield Inn & Suites, launched a Small Business Roadto-Success Challenge in 2010 to attract small business travelers. Ten small business owners will be awarded 15 free nights stay to facilitate travel, and at the end, one small business will be awarded a grand prize of $20,000 by the judging panel. 169 Other Hotels Like Marriott International, Intercontinental Hotels Group offers a variety of brands and hotels, and markets them to different customers. Crowne Plaza Hotels & Resorts are advertised on the website as, the ideal upscale hotel choice for small-to-medium- 166 www. mcafee. com/ us/ small/ support/ 167 Finance- Business. Products & Services. GE Why Meet at Marriott? Marriott International Fairfield Inn & Suites Launches Small Business Road-to-Success Challenge Offers $20,000 Grand Prize to Top Small Business Traveler. Marriott International, July 22,

39 sized business meetings. 170 Wyndham Worldwide Corp. advertises the flexible meeting space at Wyndham Garden hotels to small business events. 171 Health Care: Insurance and Managed Care Insurance is another industry where advertisement to small businesses seems logical. Small businesses, by their nature, are not as profitable for insurance companies as large corporations as they have to buy fewer policies and are often not required to provide health insurance depending on the number of employees and the salaries paid. They still make up a significant portion of the business market for insurers, as evidenced by the tailored services offered by Top B2B companies such as Aetna and Kaiser Permanente. 172,173 Mail, Package and Freight Delivery United Parcel Service of America UPS has a business solutions section on its website that allows businesses of different sizes to search their options. 174 This virtual tool allows customers to specify business size, type, and the particular business process for which they are seeking UPS services. 175 UPS does not appear to have a business unit dedicated solely to small businesses, or to small and medium-sized business. FedEx Corp. Like UPS, FedEx provides customized shipping solutions for various business sizes. FedEx even has a center dedicated specifically to small businesses on its website. 176 FedEx conducted its third-annual survey of 500 small business owners in early April of this year to determine how they plan to grow their businesses, and whether printed marketing tools like those offered by FedEx Office would remain in demand. 177 FedEx is interested enough in attracting small business customers that the company 170 IHG Lodging Brands. Intercontinental Hotels Group Wyndham Garden. Wyndham Hotel Group Small Business: 2-50 Eligible Employees. Aetna Plans for Employers. Kaiser Permanente UPS Business Solutions Ibid. 176 FedEx Small Business Center McGee, Matt. Small Business Owners Adopting Social Media in Small Business Search Marketing, May 21,

40 is participating in the 2010 Enterprise Council on Small Business Summit along with AT&T, Bank of America, Capital One, CDW, Cisco, Dell, Discover, FedEx, Google, Hewlett-Packard, Intuit, Marriott, MasterCard, Microsoft, Research In Motion, Sprint, Staples, UPS, Verizon, Visa, and Wells Fargo from among the companies on the Top 100 B2B list. 178 Internet Services and Retailing The most important thing for internet services companies is the amount of time users spend on their sites, as this relates to their ad revenue and overall profit. Therefore, if a company has services that can be advertised to a relevant user population or can develop niche services to expand their reach, this will usually be profitable. Expedia, for example, has a Business Travel page with deals and packages targeted towards business travelers. 179 Google Google continuously develops new products and services to target diverse populations of users and dominate their time spent on-line. For small business internet users, Google has developed a Small Business Network, through which subscribers can list their business online, share creative business uses of Google Apps, target customers with AdWords, and receive updates on public policy issues that may affect their business. 180 Airlines Businesses of all sizes make up a huge market for airlines. The highest B2B spending airlines have initiatives to attract business travelers and to facilitate scheduling and booking for businesses. Delta Air Lines Delta offers a SkyBonus program to small and medium sized businesses. The program allows companies that book travel for employees to earn and accumulate points that can be put towards business travel rewards. 181 Southwest Airlines Enterprise Council on Small Business Summit. Enterprise Council on Small Business: Marketing to Small Business Expedia Business Travel Small Business Network. Google The New World of Sky Bonus. Delta SkyBonus. =BIZ&Language=EN 40

41 Southwest maintains a website specifically for its business traveler customers. 182 This website is set up for company travel so that companies can specify travel preferences for their employees, and costs can be reported directly. There do not appear to be any initiatives targeting travelers from small businesses specifically at this time. Insurance: Life, Health (stock) As was earlier described for the Health Care: Insurance and Managed Care industry, insurers can benefit by targeting small businesses that are looking to buy insurance policies for their companies. In this category, MetLife and Cinergy Health both actively advertise plans specific to small businesses on their websites. 183,184 Insurance: Property, Casualty (stock) Like larger businesses and corporations, small businesses will be in the market for property insurance, including renters insurance and auto insurance, among other things. Allstate offers plans and support specific to small business owners. 185,186 Travelers small business insurance offerings are even more comprehensive. 187 Information Technology Services In North America, small businesses are expected to spend $310.8 billion on information technology this year, and $328.3 billion in This is a growing market for information technology services companies like IBM. IBM IBM offers a Smart Business system to small businesses that integrates , system security, and calendar management. This comes with Smart Market, a web-based marketplace for collaboration and application download, and Smart Desk, a webbased dashboard that manages it all. 189 Financial Data Services 182 Southwest Airlines Small Business. MetLife Limited Benefit Health Insurance. Cinergy Health Asset Protection. Allstate Understand Your Business Risks and Liabilities. 187 Small Business. Travelers Sherr, Ian. Apple Seeks Growth Beyond Consumers. The Wall Street Journal, July 21, lmyqjaxmtawmdiwmteyndeywj.html 189 Eaton, Kim. IBM Follows Apple s Model to Help Small Business Tech Needs. Fast Company, May 19,

42 Visa, MasterCard and Experian, classified in the financial data services industry, offer diverse services to the small business market. Visa Visa supports a specific small-business-focused website that advertises a credit card tailored for small business owners, spending reports, the Visa Business Network to connect with small business owners, and discounts with participating merchants. 190 MasterCard MasterCard also offers solutions for small businesses, including cards, MasterCard Easy Savings at participating merchants, and online business resources. 191 Experian Group Experian powers BusinessCreditFacts.com, a website targeted towards small businesses that allows companies to access their own credit reports and gives tips on how to establish and improve credit scores. 192 Specialty Retailers The specialty retailer industry includes several companies that have very little motivation to market to small businesses, such as Bed Bath & Beyond or Toys R Us. Staples and Office Depot, the two specialty retailers present on the 2008 Top 100 B2B Advertisers list, do however have cause to market to small business customers. Staples Columns on the Staples website advertise Staples products contextually. For example, just below the index of Tax Tips & Advice columns including the article, Federal Taxes for Small Businesses, there is an advertisement for $700 in software savings with the purchase of tax software. 193 Staples also conducts an annual survey of small businesses to determine what challenges these customers are currently facing 190 Visa. m/url%3fsa%3dt%26source%3dweb%26cd%3d1%26ved%3d0cbcqfjaa%26url%3dhttp%253a%252f%252 Fvisa.com%252Fsmallbusiness%26rct%3Dj%26q%3Dvisa%2520and%2520small%2520business%26ei%3DixR8TM PPIIOB8gbO07zqBg%26usg%3DAFQjCNHNvAnMFanEjSK1ssGuprUdN4GSfg%26sig2%3DndDixqFKFndNjw rnyand_q 191 MasterCard Small Business Experian Business Credit Facts Weltman, Barabara. Help for Small Businesses with Federal Taxes. Staples. 42

43 and has recently launched Staples Technology Solutions to help small businesses with their IT needs Office Depot Through its online Business Resource Center, Office Depot offers all manner of services to small business customers, including services outside of office supplies that are provided by Office Depot s partners. 196 Office Depot conducts a monthly survey of small businesses called The Office Depot Small Business Index. 197 Overall Trends for 2010 Part IV: B2B Channel Mix Trends Outsell s Annual Advertising and Marketing Study 2010 collected data from 1,008 U.S. advertisers and found that B2B advertising and marketing spending will increase this year by 0.8% to $129 billion. 198 BtoB Online s 2010 Outlook: Marketing Priorities and Plans survey relates the marketing goals of 376 B2B marketers for Of these, 73.4% plan to increase 194 Free Shipping a Must for Small Business Online Purchases. Staples, August 4, Cardona, Mercedes. Staples Expands into IT Outsourcing for Small Businesses. Daily Finance, February 16, Business Resource Center. Office Depot Office Depot Survey Reveals That Saving Money and Economic Issues Continue to be at the Forefront of Small Businesses. Office Depot Media Relations, August 19, B2B Marketers Up Social Spend. emarketer. March 17,

44 their online spending; 38.0% plan to increase direct mail; 35.7% plan to boost events; and 19.8% say they will increase print advertising. 199 Other plans are visually represented below: 2010 Plans for B2B Marketing 199 Maddox, Kate. Nearly 40% of Marketers Plan to Boost Budgets. B to B Online. November 16,

45 Source: A detailed break-down of the spending patterns for B2B advertising in 2008 is presented by BtoB Online based on ad spending data from TNS Media Intelligence s most recent report: Top 100 B2B Advertisers Cut Spending 10.2%, Op. cit. 45

46 Source: 46

47 Overall Print Ad Spend The same study by Outsell mentioned earlier found that for the first time, in both consumer and B2B advertising, advertisers will spend more on digital than on print: Of the $368 billion marketers plan to spend this year, 32.5% will go toward digital; 30.3% to print. 201 However, Ad spending for magazines will rise this year by 1.9%, to $9.4 billion. That number reflects a spending boost of 4.2% for consumer titles and 1% for B2B. 202 Magazines as a category includes more publications than just the business-to-business publications mentioned above. Data from American Business Media s Business Information Network shows that total ad pages for business-to-business publications fell 4.7% from 51,010 in April 2009 to 48,609 in April 2010, while total revenues fell 4% to $606 million. 203 The decreases were then examined by category or industry: transportation and logistics pages fell 35% in April; computing, software and telecom, down 25%; building, engineering, and construction, down 22%; movies, radio, TV and video, down 19%; and travel, business conventions, and meetings, down 17%. 204 The rate of decline in B2B publication ad spending has, however, been evening out: A disastrous 2009 saw ad pages tumble 28% compared to 2008, B2B ad pages dropped another 15.3% in January, 9.4% in February, and 5.7% in March. 205 Overall Digital Ad Spend Overview of Online B2B Marketing Online advertising accounted for 7% of the B2B marketing mix in 2008 and is expected to increase to 12% of the mix by The Internet market research company emarketer reports the online digital marketing spending in 2010 by category: Smillie, Dirk. Digital Lift-Off. Forbes. March 8, Ibid. 203 Sass, Erik. ABM Downbeat: B2B Ad Pages Decline. Media Daily News. June 29, Ibid. 205 Ibid. 206 Holden-Bache, Adam. 28 Awesome B2B Social Media Statistics. Social Media B2B, August 4, The State of Online B2B Marketing: What Lies Beneath. Zimbio, August 11,

48 Source: Strategy consulting firm AMR international also makes predictions as to B2B spending in online marketing: Social media spending is forecast to rise the most dramatically during the next three years, with a 21% compound annual growth rate. Other individual B2B marketing sectors with predicted growth rates higher than the overall rate of 12% include lead generation websites (17%) and online marketing services (15%). One sector, online directories, is expected to undergo negative compound annual growth of 2% B2B Online Marketing Holds Strong Growth Potential. Marketing Charts. 48

49 Within the interactive marketing category, there have been varying increases in B2B marketing spending for different tactics: 209 Social Media Source: emarketer predicts that advertisers will spend $1.68 billion on ads on social networking sites this year. 210 This represents a 20.3% increase in spending in this channel from last year. By 2011, social ad spending will increase another 24.2% to $2.09 billion. 211 emarketer also predicts that in the next five years, one-fifth of marketing budgets will go to social media: 212 Source: B2B Marketers Up Social Spend. Op. cit. 210 Study says social ad spending to reach $1.68 billion this year. B to B Online. August 16, Ibid. 212 Marketing Budgets Spiral Toward Social. emarketer. March 2,

50 Source: In March 2010, digital marketing firm White Horse conducted a survey of 104 corporate marketers across a range of businesses. They generated data relating to B2B marketers level of social media engagement, level of executive sponsorship of social media and breakdown of social media tactics: B2B Marketers Have Little Social Media Engagement. Marketing Charts. 50

51 Source: Source: 51

52 Source: Interestingly, the reported level of engagement varies widely from actual usage. The same survey found that 86% of B2B marketers use social media, though only 32% describe themselves as being daily engaged. 214 Mobile Marketing Forrester Research predicts that B2B spending on mobile marketing will quadruple before 2014, rising to $106 million. Michael Greene, analyst at Forrester Research says, Mobile is still nascent. Nonetheless, over this five-year time span, mobile will become real, especially for B2B marketers New Survey Finds B2B Marketers Gaining Ground in Social Media. White Horse Butcher, Dan. B2B Mobile Marketing Spend will Reach $106 M in 2014: Forrester. Mobile Marketer. March 8,

53 Contact Information Address: Appendix: Contact Information 1. Verizon Communications 140 West Street New York, New York Phone Number: People Executive Director of Marketing Richard Williams Vice President, Small-business Monte Beck Contact Information Address: 2. AT&T 208 S. Akard St. Dallas, Texas Phone Number: People Senior Executive Vice President and Global Marketing Officer President and Chief Executive Officer, AT&T Business Solutions Executive Vice President of Small Business Solutions Catherine M. Coughlin Ronald E. Spears Cathy Martine 3. IBM Contact Information Address: Phone Number: People Senior Vice President, Marketing and Jon C. Iwata Communications Senior Vice President IBM Global Business R. Franklin Kern Services Contact Information Address: 4. Sprint Nextel Corp Sprint Parkway Overland Park, Kansas Phone Number: People President, Business Markets Paget L. Alves Vice President, Small Business and Alternate Judy Train Channels 53

54 Contact Information Address: 5. Microsoft 1 Microsoft Way Redmond, Washington Phone Number: People President, Microsoft Business Division Stephen A. Elop Corporate Vice President, Worldwide Small Vahè Torossian and Midmarket Solutions and Partners Group Vice President of Small and Medium Business & Distribution for the Worldwide Small and Midmarket Solutions and Partners Group Senior Vice President of North America Sales & Marketing Corporate Vice President of the Business & Marketing Organization in the U.S. Birger Steen Robert Youngjohns Allison Watson 6. Hewlett-Packard Co. Contact Information Address: 3000 Hanover Street MS 1050 Palo Alto, California Phone Number: People Executive Vice President, Personal Systems R. Todd Bradley Group Executive Vice President, HP Enterprise Ann M. Livermore Business Senior Vice President of Worldwide David J. Shirk Marketing, HP Enterprise Business Vice President of Marketing, HP Mike Banic Networking Contact Information Address: 7. General Electric, Co Easton Turnpike Fairfield, Connecticut Phone Number: People President and CEO GE Home & Business Charlene Begley Solutions Senior Vice President and Chief Marketing Officer Beth Comstock 54

55 8. Deutsche Telekom Contact Information Address: Friedrich-Elbert-Allee Bonn, Germany Contact Information Address: 9. JPMorgan Chase & Co. Phone Number: Contact Information Address: 270 Park Avenue New York, New York United Parcel Service of America 55 Glenlake Parkway, N.E. Atlanta, Georgia Phone Number: People Senior Vice President, Worldwide Sales and Marketing Contact Information Address: Alan Gershenhorn 11. Bank of America Corp. Phone Number: People President of Consumer, Small Business and Joe L. Price Card Banking Contact Information Address: Bank of America Corporate Center 100 N. Tryon Street Charlotte, North Carolina Apple Computer 1 Infinite Loop Cupertino, California Phone Number: People Senior Vice President, Worldwide Product Philip Schiller Marketing Senior Director, Direct Marketers Michael Pinkman 55

56 13. Southwest Airlines Contact Information Address: P.O. Box Dallas, Texas Phone Number: People Senior Vice President Marketing & Revenue Davis S. Ridley Management Director of Marketing and Communications Dana Williams Contact Information Address: 14. FedEx Corp. 942 South Shady Grove Road Memphis, Tennessee Phone Number: People Executive Vice President, Market T. Michael Glenn Development and Corporate Communications Vice President of Marketing, FedEx Karen Rogers Vice President of Marketing, FedEx Office Randy Scarborough Contact Information Address: 15. Dell 1 Dell Way Round Rock, Texas Phone Number: People President; Consumer, Small and Medium Stephen J. Felice Business Senior Vice President and Chief Marketing Officer Global Vice President of Dell Consumer and Small-Medium Business Marketing Erin Nelson Paul-Henri Ferrand 56

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