Have you ever heard of Turf? Odds are you haven't, unless you're a landscape architect, a groundskeeper at a golf course or you run a lawn-care company. In that case, you and about 70,000 other lawn-care professionals are eagerly awaiting the day when the next issue of Turf shows up in your mailbox. If you happen to work in this field, you can't wait to see the product reviews that Turf brings to you every month - mowers, trimmers, soil aerators and spreaders.
There's a very basic media concept at work here - narrowcasting. While Turf might not be challenging TV Guide from a circulation standpoint anytime soon, the professional turf-care industry needs a voice as much as consumers need a way to get the latest news on what's on the tube. Turf will never carry an ad for Cover Girl cosmetics, but for a company like Toro that makes lawn-care equipment ranging from riding mowers to sprinkler heads, Turf wins ad dollars hands down as the bible of the industry. Sure, the audience is small, but nearly every person reading that magazine is qualified to purchase lawn-care equipment. For companies that make products for that sector, a magazine like Turf represents the Holy Grail.
Narrowcasting is widespread within the print universe, but the future potential to reach niche audiences on the Web lies with interactive media. One of the first things people realize in their first few minutes surfing the Web is that for every niche interest, there is a Web site that speaks to that interest, no matter how small the audience dedicated to it. The Internet's low cost of publishing drives this concept forward.
In the modern world of "cheaper, better, faster," it only makes sense that niche business to business publishers would carve out a place for themselves on the Web. And where audiences are developing, commerce develops as well. According to a Gartner Group forecast, nearly $7.3 trillion will be spent on B2B e-commerce by 2004.
But there will be bumps along the road. We experienced one last year. B2B media spending in general declined last year nearly 13% to $13 billion, according to a study by Veronis Suhler Stevenson. And the sector hasn't bottomed out yet. The same study predicts that B2B ad spending will drop 11.7% to $12.1 billion in 2002. It remains to be seen whether the Web will bear a disproportionate share of the burden, with advertisers sticking to proven, more traditional vehicles, or whether innovators looking to generate business leads in a more cost-effective fashion will pick up the slack.
"2003 will bring more interest than ever before in accountability," says Ruth Stevens, president of consulting firm eMarketing Strategy. "Marketers must prove their results, or face a reduction in their budgets."
Says Scott Anderson, director of e-marketing for Sun Microsystems, "I believe B2B advertisers are slower to embrace the Web because the C-level executives responsible for budget allocation most likely receive much of their information either from peers or from print. For that reason it is the challenge of the eMarketing community, both clients and suppliers, to come up with innovative ways to tie online marketing closer to business results. An eMarketer who presents to the Board of Directors and shows a resulting ROI -- whether it be through leads, sales, or some other tangible result -- is more likely to see an increasing share of budget allocations over time."
Sound familiar? ROI became the mantra of the consumer Web advertising market in its formative years. Back then, most marketers looked at click rates, cost-per-lead and cost-per-sale to evaluate their ROI. But these days, marketers have more ways to measure ROI, including studies that can show lifts in purchase intent and product awareness. These added options will give B2B marketers more ways to gauge the success of their online campaigns.
"People talk a big game about results," says David Hirsch of Google's B2B sales group, "But if you don't deliver results, repeat customers go away. There are no more 'dollars in the wind.' If you cannot prove an ROI with your advertising solution, you can bet your buy will disappear."
It's All About the Audience
According to a recent GartnerG2 study, B2B advertisers are slow to move to Internet advertising because most Web sites have broad appeal and have trouble identifying specific markets and audiences that are important to B2B advertisers. Any media planner who has ever worked on an online B2B campaign can tell you it is often frustrating to attempt to build critical mass against a niche audience. But publishers learn more and more about their audiences every day. Can it be long before the Web's narrowcasting abilities catch on with a wider range of B2B marketers?
"The Web offers tremendous capability in targeting specific vertical audiences, especially in the B2B space," says Adam Gerber, director of media strategy at e-agency The Digital Edge. "IT managers, procurement personnel, decision-makers/influencers -- all can be reached fairly efficiently via the Web. You need to think of the opportunities as you would with trade print. Just as professionals read 'the trades,' they now migrate to comparable resources online for real-time, or more accessible information. The key is figuring out what they are accessing on the Web."
"There are only so many chemists, oncologists, etc.," says Bill Furlong, CEO of B2BWorks, a leading network of B2B sites. "I predict that in B2B you'll pay even more of a premium to reach certain segments because there are only so many of them."
Indeed, it seems that the more a B2B Web site knows about its audience, the easier a time it will have selling advertising to B2B advertisers.
"Niche is the key word here," says David Smith, president of ad agency Mediasmith. "Most knowledge workers these days spend regular time on the Web getting the information they need to do their jobs ... Low CPM does not count for much if it is in content that is too general. From a Website standpoint, sites need to do more studies of their audience, akin to the subscriber studies that work so effectively for the business press."
But How Receptive are B2B Audiences to Online Advertising?
It naturally follows that if business audiences are aligning themselves around content specific to their trade, then these audiences are leveraging that content to solve business problems and gather mission-critical data for their business initiatives. Such environments are great for reaching qualified audiences, but can marketers expect immediate response from prospects if the marketer reaches those prospects while they are gathering time-sensitive information critical to their business?
"When targeting in the B2B environment, almost by definition you're targeting people through the day, and they are busy, they don't have time for fluff, don't have time to hear your broad general brand imagery message," says Eric Siebert, director of worldwide interactive integrated marketing communications at IBM. "If you target them with news they can use, information that is of value to them, something that can make their jobs more productive, make them smarter, make them look better in front of their bosses, or something that is truly bringing value to them, in exchange for their time, than yes; it's a different form of marketing and you've got to really understand the motivations of the target audience and what their pain points are, and how products and services can help to alleviate those pain points.
"Ultimately, yes, they are more receptive to B2B marketing, because when done right, it should resonate more, it should be something that will assist them and help them, rather than distract them and annoy them," he says.
Adds Smith: "If you can show a clear benefit to somebody relative to a business issue that he or she has on his or her plate while the person is at his or her desk, your chances of success increase dramatically."
The Value is in Relevance
In the end, it is the relevance of a site's content to its business audience that drives adoption and usage from that audience. Trade print publications offer several different types of content that are relevant to the business sectors they cover. In addition to news and product reviews, they can offer opinions from business leaders, letters to the editor, classified ads and more. The Web has taken some of these content concepts to the next level.
Take classified ads, for instance. An excavation company might find that one of the best ways to sell a payloader is to advertise it with a classified ad in a trade publication. Yet, the Web has taken the idea of trade-specific product sales to new levels. Not only can businesses place classified ads online, but they can also participate in B2B exchanges, in effect taking the bid process online. Businesses that manufacture products can completely automate the bidding and RFQ (request for quote) process by bringing it to the Web through B2B exchanges. This increases efficiency, as interactive media make it easier for companies to disseminate RFQs to a wider range of suppliers.
"If there are 500 suppliers and you're using the same people year in and year out, I guarantee you're not buying from the most efficient, best managed companies in the industry. The chances that you have happened on the three best people in that industry are about zero," says Glen Meakem, founder of B2B exchange Freemarkets, in an interview with Accenture's Outlook Journal.
A quarterly report from the Institute for Supply Management and Forrester Research, released in January of this year revealed that organizations have increased their participation in online marketplaces. Twenty-six percent of organizations bought goods or services via online marketplaces in the fourth quarter of 2001, an increase from 23% the previous quarter. In addition, the report showed an increase of six percentage points in online auction usage from quarter to quarter. The effect was most pronounced for manufacturers, whose use of auctions increased eight percentage points from 21% in 3Q 2001 to 29% in 4Q.
Cost savings from suppliers is a motivator for just about any business. The relevance of B2B exchanges is one of the features of the Web that will help to speed adoption. But so will community features that allow a deeper trade experience for the B2B Web user.
According to a study conducted by McKinsey earlier this year, the community features of e-business Web sites are helping to drive loyalty and purchases. In that study, McKinsey found that users who contribute product reviews or post to bulletin boards visit sites more than nine times as often as users who don't use these community features. They also remain twice as loyal and buy nearly twice as often: The one-third of site visitors who use these features account for two-thirds of the sales.
The Web makes this kind of interaction easy. A simple bulletin board can increase loyalty by giving business users a place to discuss issues and products relevant to their business. Sort of like an online trade show.
"We've had customers who want to orchestrate a live PR event on the Web, so resellers and VARs can participate and hear about the new product," says Furlong. "At the same time, advertising will run in trade publications for the new product. E-mail blasts will also be sent to end-user customers, and leads are collected and distributed at VARs at the same time … That's the kind of deep, detailed launch that some of our customers are doing … it's critical to B2B marketing to understand that you have to market to your distribution channel as well as end users."
Marketing to distributors is a cornerstone of Turner Broadcasting's business model. The company has developed TurnerResources.com into an online focal point for its affiliates.
"Our B2B Web site is one more way that we support our affiliates to help them better do their jobs and drive their revenue," says Jennifer Reichenbach, vice president of national accounts and marketing for Turner. "We want to make sure that everything they need is available at their fingertips, 24/7, and that they can go to TurnerResources.com for the up-to-the-minute information and programming they need."
