B-to-B More Likely to Spend on New Media than B-to-C

B-to-b companies are significantly more likely to allocate a higher percentage of their media budgets to new media than their b-to-c counterparts.

These are the results of an online survey of 146 b-to-b, 107 b-to-c, and 73 hybrid marketers conducted by research company Guideline in June.

B-to-b companies appear to be earlier adopters of new media platforms, with 31% of the respondents reporting an allocation of 20% or more of their budgets to online marketing. As reported by BtoB Magazine, Frank Dudley, VP-marketing at Guideline, new media platforms fall into three distinct tiers:

1. Top tier – like proprietary Web sites, e-mail marketing, online ads, search engine optimization (SEO), search engine marketing and webinars. This is where the bulk of the budget dollars will be spent.
2. Middle tier – which includes blogs, RSS feeds, podcasts and video on demand.
3. Bottom tier – which consists of wikis, mobile, viral video, social networks and Second Life.

Where are those budgets coming from?

For b-to-b, 52% are planning to shift money from traditional advertising, while the percentage is higher for b-to-c, at 73%. And 40% of b-to-b companies plan to increase their budget incrementally; only 33% of b-to-c marketers plan to do so.

Who’s been using what?

60.3% of b-to-b marketers have been using e-mail marketing and 33.6 % webinars for more than three years compared to 41.1% and 7.5% respectively for their b-to-c colleagues.

The biggest surprise to me yet was that the survey also found that 21.2% of b-to-b marketers have been using blogs and 12.3% wikis from one to three years; b-to-c marketers compare at 10.3% and 5.6%.

Where are b-to-c marketers more experienced? According to the survey: viral video, social networks and mobile marketing. That would make sense for professionals who work in the consumer goods field.

What are their primary objectives?

For b-to-b the primary objective is lead generation. They do so by using top tier platforms and reserve brand building for middle and bottom tier media, as you can see in the charts I recreated. This is very much a bottom line approach. B-to-c companies, on the other hand, use new media marketing to focus more on brand building.

What works best?

So far for b-to-b those are webinars and podcasts, which in my estimate are activities that help deliver thought leadership content, at 54% and 21% ratings respectively compared to 27% and 13% for the same activities in b-to-c.

The behaviors marketers valued to measure new media effectiveness were downloads of white papers and brochures for b-to-b. For b-to-c measurement consisted in site visits.

What are the barriers to adoption of new media?

They are lack of experience and perceived inability to prove effectiveness and ROI.

And this is the reason for this post.

I’ve been researching rich text media ads metrics and so far I have not come up with a recent study that supports adoption rates based on documented ROI.

I have found some useful information on DoubleClick's web site. I was looking for experiences from you as well. Have you seen a rich text ad that works? Why does it work for you? Are there metrics anywhere to support ROI of this medium?

While these questions are specifically my focus, I will be thrilled to gather any other stories around the successful use of new media in b-to-b, especially for demand generation and customer loyalty.

Comments

[mvellandi]

Wow! You're just rolling with the data today aren't you. You must have a statistician or two under the table.

It makes a lot of sense though since B2B is the largest yet mostly invisible aspect of our GDP, and historically speaking...technologies are oft widely adopted first by businesses, their benefits understood, then reshaped into consumer applications.

I'd like to hear stories too!

[Geoff Livingston]

Very useful information. I think B2B can make a greater impact with social media, too. Niche communities allow for easier value creation via content, etc.

[Valeria Maltoni]

Mario -- I just found the numbers particularly telling in this example as I would have not guessed... and it does make sense that b-to-b would lead particularly in top tier applications. The wider use of blogs surprised me.

Geoff -- well and that's why thought leadership or creation of useful content ranks so high among users and as a priority for b-to-b companies with top tier platforms acting as wider distribution systems.

I am really curious to learn from direct experience though. Aside from banner ads on niche sites I have not done much with rich text ads.

[Tiffany]

Very interesting research. We have been using e-mail marketing for about two years, and that has proven to help our franchises build some valuable client relationships.

[Herb]

The blog use makes sense. It is one place that b-2-b can show case their thought leadership and communicate directly with their partners.

For example, if I need help understand/installing product X, go to the blog, chat it up. If I like business X, I'll want to see what they are thinking, talking about.

What surprises me is the SL numbers in general and the lack of demand generation/cross-selling in social networks. SL...really? (maybe it is my lack of SL faith). But social networks, i.e. linkedIn or business specific networks I think would be great places to get referrals from other social network links.

[Anna Farmery]

Great post - as usual Valeria. I understand why b2b is bigger in the monetary sense but it is interesting that the technology is allowing one to one connection. I am assuming that B2C does not come up as they are using the tools as "free marketing" rather than spending money on the advertsing? In so many ways it does not make sense that b2c is lower as the tools are so suited for them. Mmm may have to muse some more, thanks for the inspiration.

[Patrick Schaber]

Valeria,
Great post! I saw that data from BtoB Magazine too - it caught my attention. I'm shifting money from traditional advertising to new media on a quarterly basis. I'm noticing it's not a money issue, but rather a time issue. I can get into a lot of new mediums (i.e. blogging) for minimal cost, but the time spent compared to traditional mediums is much greater. I think this will be the greatest issue facing the BtoB market in the coming years.

The ROI is tough to measure, but I think BtoB organizations understand it's about the "conversation" and the long term benefits of starting that are invaluable. In two or three years, there will definitely be more organized metrics for new mediums.

[Valeria Maltoni]

Tiffany -- email marketing seems to be a proven way to go in may b-to-b models; it can be run based upon permission levels and has been used for quite some time now. I do wonder about Web sites. Have we made the jump from static brochure ware to what do you want them to do yet?

Herb -- SL gave me pause as well while I was recreating the charts last night. As for social networks, it does make sense as they are more driven by who is there and the traffic who is there generates... no kind of control from the company as you may have partly in blogs by moderating the conversation. Thank you for coming back! I really did enjoy your take on facilitating conversations with clients at your blog.

[Valeria Maltoni]

Anna -- that is a consideration. If b-to-c companies are using these tools for free... they they might not be tracked in the study. Do let me know if you come up with insights.

Patrick -- I just came across an interesting article at The International Herald Tribune that cites fear of lack of productivity by employees as well as lack of brand control as reasons to pull ads from social media sites. See link here http://www.iht.com/articles/2007/08/12/business/social13.php
As for the value of having the conversation... it's a tougher sell than you think ;-)

[Anna Farmery]

Valeria - here are the questions I came up with after musing on why b2b spend more...see what you think.
* Is it because technology companies have driven the growth?
* Is it because many B2C companies have more invested in their websites therefore less eager to change?
* Is it because many smaller companies fall into B2C and therefore do more for themselves rather than spending money in this area?
* Is it because businesses have internet connection whereas many consumers do not have broadband or even internet connection?

Of course it might just be a timing issue!

[Valeria Maltoni]

Anna:

No takers yet? Those are excellent questions and I do wonder if any of these readers would like to attempt a dialogue around them.

My take is that each of your questions is in part true. And the B2B model is more robust. Let me explain. I was talking with an entrepreneur not long ago who helps very early stage start ups. He told me that when he went out on his own from sales inside an organization, he knew to stay focused on B2B companies as the deals are much bigger than B2C.