BtoB

Why b-to-b sites lead the way online

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The scene: a recent Web advertising workshop. Interactive agencies and marketers are deep in argument over how, or even whether, to set new online ad standards. Suddenly an older gent stands up in a far corner of the room to point out, cheerfully, that all this is so much hot air in terms of his company.

You see, he's in business-to-business and, for him, the Web is already like a dream come true. The rest of the room is silent for a second while everyone nods grudging agreement, then they immediately turn back to the intractable problems besetting the consumer side of the Internet business.

You have to feel at least a little sorry for them. Compared with their counterparts in the business-to-business world, consumer marketers must wrestle with countless complexities over advertising, pricing, models, psychology, technology and, ultimately, just how much &%*# money is going to have to be spent before anyone shows even a modest profit online.

Why is it that b-to-b companies have had so much luck online where consumer marketers have faced mostly confusion? Because the Internet's most obvious strengths go right to the heart of what business-to-business selling is all about.

Business-to-business is about niche targeting; so is the Web. If you've got the right product, your customers will come looking for you. The transaction has none of the overtones of an impulse or luxury purchase. It's business procurement that has to be done as efficiently as possible, and the Web's ability to generate endless levels of detail about the product is unparalleled.

For the most part in b-to-b, you're dealing with customers online who already have a relationship with you. Layering on a commercial Web channel doesn't represent a new business so much as it does a realignment of your existing operations, newly reorganized for the convenience of your customers while, miracle of miracles, also dramatically cutting your costs.

Here's an added plus: For many b-to-b companies, the Internet's return is in generating sales and leads. Advertising is not a major issue. And because there's no ad revenue at stake, there's no confusion about the value of the "eyeballs" you're getting. It's a much simpler calculus: All that matters is how many wallets you're getting.

Compare this with the situation facing consumer Web marketers, where all remains chaos. The Internet industry mergers and consolidations of recent months point to only the increasingly deep pockets it requires just to stay in the game, particularly because no one can quite say what the game is.

All the strengths of b-to-b Web use can look like weaknesses in the consumer world. Mass marketers can reach only niche consumers, and have to advertise -- online or off-line or somehow -- to do so. The customer's demands for detailed levels of information and service are difficult and expensive to fulfill. And because of the mass market outreach involved, ramping up a major Internet effort often adds new costs, rather than reducing traditional ones.

This isn't to say that the bright minds of Internet marketing won't eventually master these challenges. But it does hint that it might do well for consumer Web efforts to study the methods and strategies of their b-to-b brethren.

At this early stage, before the Internet has really grown into a mass medium, the business-to-business model is the only one so far that indisputably works.

David Klein is associate publisher-group editor of the Ad Age Group. You can e-mail him at dklein@crain.com.

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