Engage Technologies Inc. last week launched Engage Business Media, a stand-alone unit focused on placing Internet banner and e-mail advertising on vertical industry sites. The launch marks one of the boldest moves to date by a major Internet advertising network to cater to the needs of b-to-b advertisers.
The 40-person division, headed by general manager Joanne Currie, comes to market with 78 publishers signed, including Thomas Register, e-Steel and a Perot Systems Corp. division that develops digital marketplaces.
Engage Business Media will focus on selling advertising space for b-to-b news sites with as few as 25,000 impressions, Currie said.
Engage Business Media is the second major specialist in the b-to-b space, following the entry of Chicago-based B2BWorks in 1999. It will race to build b-to-b momentum backed by the resources of Engage, a CMGI Inc. company that controls the b-to-c advertising network Adsmart and profile marketer Flycast Communications Corp.
The timing appears terrific. U.S. Internet advertising is expected to reach $11.5 billion in 2003, up from $2.1 billion two years ago, according to Jupiter Research. Yet b-to-b advertisers--accustomed to measuring a campaign's efficacy against dollars returned--have no reliable way to measure results through b-to-c cost-per-measure models.
In fact, 49% of respondents to an Association of National Advertisers survey released last week cited the inability to measure return on investment as their biggest obstacle in digital marketing.
Engage comes to market with less than one-fourth the sites that B2BWorks has so far accumulated. A stronger initial entry was expected from a business with Engage's clout, experts said.
"They definitely have a lot of ground to cover," said Jim Nail, senior analyst at Forrester Research Inc. "Given Engage's backing from CMGI, and its infrastructure, 78 publishers are not impressive numbers. I can't say I am overwhelmed by the launch."
Still, Engage and B2BWorks are the only two serious contenders in the b-to-b space to date, Nail said.
Engage's business model is different from B2BWorks, which offers industry trade publishers a way to sell advertising space to advertisers they wouldn't normally reach. Where B2BWorks caters to heritage brands in such segments as office supplies and finance, Engage Business Media will sell cost-per-click advertising to industry-specific advertisers for between $10 and $30 per lead.
"If we are even half right about the numbers, this is going to be successful," Currie said. "We're not going to talk to agencies in the same way b-to-c advertising networks do. It is going to be in-house marketing departments buying the space."
Engage said it will focus on 12 industries, including automotive, agriculture, construction, chemical, food, information technology and telecommunications.
It faces a heady challenge from B2BWorks, which already has significant momentum.
B2BWorks has agreements with publishers Advanstar, McGraw-Hill, Penton Media, Phillips Business Information and Primedia's Intertec. Its network currently has 16 million business executives in its database, and serves 65 million page views monthly. Advertisers include Motorola and E-Stamp. In addition, the company has technology partnerships that allow publishers to beef up the services on their sites.
"Engage Business Media verifies this huge market opportunity," said Bill Furlong, president of B2BWorks. The B2BWorks model is broadening to include all forms of advertising, so the company will compete directly with Engage for endemic, or vertically targeted, advertising.
Also, B2B Works has added a telesales department to sell advertising space in directories, Furlong said. "It is easy to say we're horizontal, but there's a lot of teeth to our model."
Several major publishers have sunk their teeth into Engage, including Thomas Food Industry Register, New York. It has signed an agreement with Engage to represent it for Internet sales that don't interfere with its existing advertising programs.