BtoB

Beyond direct

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Call it b-to-b direct marketing on steroids. On June 1, VentureDirect Worldwide will launch B2BFreeNet, a service that for the first time integrates direct mail, online e-mail and Web site services into a single buy.

For a cost of between $3,000 and $20,000 a month, VentureDirect will provide advertisers with direct campaigns targeted at 23 separate industry channels, including financial services, accounting, sales and marketing, and architecture. The direct mail pieces, e-mail and Web site listings will include identical promotions, sweepstakes and discounts.

"There's a good chance this is the first of its type," said Dana Serman, VP of equity research for Lazard Freres & Co. "It is rare that someone has bridged offline and online [in any way]."

Tracking demand will be interesting. A one-stop shop for online and offline direct marketing should be a compelling offering [to marketing executives]."

"We strongly believe you have to have a presence both offline and online," said Rich Baumer, president and CEO of New York-based VentureDirect. "You have to hit them more than once."

VentureDirect is seeking a first-to-market advantage in an area that many see as a potential blockbuster. B-to-b advertisers are more concerned than their b-to-c counterparts about targeting a niche audience and about measuring performance. Because of this, they tend to be far more interested in combining campaigns across multiple media, experts said.

"Trying to marry a proven medium such as direct mail with unproven vehicles such as e-mail and an [aggregate] Web site is an interesting experiment,"

For now at least, VentureDirect appears ahead of its competitors.

Among Internet marketing specialists, Engage Business Media and B2BWorks have targeted b-to-b advertisers with banner, cost-per-click and e-mail products. B2BWorks, which inaugurated a b-to-b network late last year, is likewise moving to broaden its reach. The Chicago-based company is in final negotiations with MediaBrains.com Inc. to provide MediaBrains' Internet-based reader-response cards. B2BWorks plans to combine this with Web banner and e-mail advertising services.

But most traditional direct mail companies are concentrating on developing self-service solutions for marketers, not extending integrated services across all forms of media.

"Why hasn't anyone done this before?" asked Ruth P. Stevens, chief marketing officer of b-to-b exchange Ipnetwork.com and chair of the b-to-b council of the Direct Marketing Association Inc. "Business data has traditionally been hard to get. Most b-to-b companies consider their customer files to be a huge asset. The value of a b-to-b customer is much, much higher than the average consumer. So, the kind of data manipulation that's available in consumer [marketing] has simply not been available to b-to-b marketers."

Overcoming the resistence by b-to-b marketing departments over relinquishing their customer lists is a prime goal of VentureDirect. Experts are bullish on VentureDirect, however, because it focuses on lead generation, obviating the need to have the advertiser turn over its precious corporate or customer lists.

"This could be a home-run for some companies and a ho-hum for others, but I'd advise my clients to test it," said Tracy Emerick, with the direct mail consultancy TracyEmerick.com. "It sounds like it might work for direct-sold items."

More offerings expected

The VentureDirect offering is expected to be among the first of many, said Dennis Sandler, associate professor of marketing at the Lubin School of Business at Pace University. He expects a series of marketing announcements in coming months centered on the b-to-b market, each with a slightly different spin on integrating traditional direct marketing and the Internet.

Timing may be everything. Though privately held VentureDirect gets more than 60% of its $125 million in annual revenues from b-to-b advertisers, its best-trafficked Internet site, Free Forum Network, is b-to-c. VentureDirect has operated direct-mail services for 17 years.

In 1994, it launched a b-to-b direct-response site called The Free Store on the Prodigy Network, only to discover that the consumer-centric service delivered meager results. In 1997, it created FreeForum.com as a b-to-c play, after discovering that most of the viewers and advertisers were consumer oriented.

Today, more than 100 million impressions are served monthly by FreeForum, and half of the firm's overall revenue comes from either e-mail direct marketing or Web sites, Baumer said. With the introduction of B2BFreeNet, revenues should tip decidedly in the Internet's favor, he said.

"In the last 6 to 12 months, the b-to-b audience has begun to show up online. That's why the time is right for this service," Baumer said.

Pricing on the services are tiered. For $20,000 monthly, a direct marketer gets an interstitial advertisement on the B2BFreenet.com site, a customized Web page, text links placed strategically throughout the Web, search-page listing services and e-mail sponsorship buttons. In traditional media, the advertiser gets 750,000, 5x7 postal direct-mail advertisements. For $3,000 monthly, direct-mail circulation drops to 100,000 mailers and fewer components online.

Qualifying the audience

It makes Baumer bristle when the suggestion is made that this is a reader-service business. After all, the site won't blindly give away promotional items, free trips or marketing materials without qualifying the audience. It will require a separate registration from every visitor pursuing an offer, and each marketer can draw up a series of questions to qualify the lead.

"This is not a reader-service business by any means," Baumer said.

"Reader-service implies a less than qualified lead-what you'd get from bingo cards. Our program forces people to give up information about themselves."

Among the 50 customers using B2BFreeNet when it goes live will be Nomadic Displays, a vendor of trade-show exhibit displays. Nomadic has orchestrated five print campaigns through VentureDirect previously, and saw no downside to integrating Internet advertising with its upcoming b-to-b advertising effort, said Darnyse Werts, Nomadic's advertising manager.

"You want your customers to see you and see you and see you," Werts said. "If this is a new way of looking at us, why not?"

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