Marketers see good things in new year

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With an ad recovery finally under way, b-to-b marketers are welcoming 2004 as a year in which they can work with slightly larger marketing budgets and continue to build relationships with customers, investors and business partners.

The recovery, signaled by overall ad growth in 2003 of approximately 4.3% and b-to-b ad growth of roughly 3%, will have a positive impact on marketers, media companies, ad agencies and other businesses in the new year.

However, even with spending projected to grow in 2004, marketers are being cautious about how they spend. Marketing in a recession the last two years has taught them valuable lessons about smarter positioning, targeting and execution strategies.

What follows are the top 10 marketing trends to look for in the new year, based on comments from top marketing, agency and industry executives interviewed in recent weeks by BtoB.

• Tech marketing rebound.

The technology industry, which was among those hit hardest by the recession, will finally turn around in 2004 as marketers begin to spend more on advertising to reach IT decision-makers.

Tech market analysis firm IDC last week revised upward its annual predictions for 2004. In November, IDC said it expected IT spending to grow about 4.9% next year. Now it believes the market will grow by 6% to 8%, or more.

"Computer hardware and software [spending] is coming around," said Gordon Hughes, president-CEO of American Business Media.

Hughes said many companies that made significant IT investments in preparation for Y2K will need to make new purchases as older machines wear out. And to reach users and business decision-makers, computer companies will increase their ad spending, he predicted.

"The IT and C-suite people have to be reached, and they have to be given business intelligence to make those decisions," Hughes said. "PCWorld, PC Magazine and everyone in that space will benefit."

• Keeping it simple.

Many companies learned the hard way that too many marketing messages can overload customers. That’s why some marketers—even the biggest—plan to keep it simple in 2004.

One of those is Microsoft Corp., which spent close to $200 million on b-to-b advertising in 2002 (spending data for 2003 were not available).

"With a company this size, you can do so much that you start to confuse your customers," said Mike Delman, general manager of advertising and events at Microsoft.

"We are trying to do fewer things. We want to find the right level of coverage instead of doing fragmented, smaller things."

To accomplish this, Microsoft will focus on defining its core priorities, creating better alignment among its different marketing disciplines and working with tighter metrics.

"We are getting back to the basics of doing good fundamental marketing," Delman said.

• Targeting small businesses.

"2004 will be the year of the small business," predicted Jay Fiore, director of marketing for eBay Business, a new b-to-b operation that auction site eBay launched this year.

The unit targets small businesses that want to buy and sell equipment and other business products on eBay—an audience that represents a huge opportunity for marketers. "Small businesses are going to be driving a lot of the job growth in 2004, and they are a powerful audience in an election year," Fiore said.

Other marketers agree. American Express Corp., which launched Open: The Small Business Network in 2002, spent much of 2003 honing its message to the small-business audience and will continue to market to this sector in 2004.

The U.S. Postal Service has also increased its marketing to small businesses, as have traditional marketers such as IBM Corp., FedEx Corp. and Visa International.

• More creative print ads.

Print ads, a staple of b-to-b advertising, will get more creative in 2004, and marketers are expecting trade books to help them figure out how to do it.

"We would like innovative, new ideas from the books to help us stand out in the clutter and help make our money go further," said Ann Rubin, director of integrated marketing communications at IBM Software Group.

For example, for its "Middleware Is Everywhere" campaign, which broke in October, IBM worked with several IT books to place three or four small "floating" ads on pages leading up to one full-page ad, to demonstrate the concept of being everywhere in the book.

• Increased online advertising.

With technologies that prove its effectiveness, and production and media costs dropping, many marketers will embrace online advertising in 2004.

"I see a continuation of a very robust and growing use of the Web for b-to-b," ABM’s Hughes said. He predicted Internet ad revenues will increase by as much as 40% for ABM members.

"Our online presence will continue to increase," Microsoft’s Delman said. Microsoft spent roughly $35 million on Internet advertising in 2003, up 6% to 7% over its online ad spending in 2002.

• Search.

A key factor driving the growth of online advertising is search, and more b-to-b marketers are expected to use it in 2004.

"Search will continue to be big," said Greg Stuart, president-CEO of the Interactive Advertising Bureau.

Keyword search made up 31% of total online ad revenue in the first six months of the year, and Stuart said it will keep growing. "Search has not peaked, and it’s not going to level off any time soon" he said. "Most people are making profits on first customer contacts with search."

• Guerrilla marketing.

Budget-conscious marketers will find new ways to spread the word about their products and services through guerrilla marketing, which is non-traditional marketing designed to create "buzz" about a product.

Many of these tactics will be conducted online, via instant messaging, message boards, Weblogs and e-mail.

Marketers also will pursue offline guerrilla marketing tactics, including word of mouth, media events and entertainment avenues.

"2004 will belong to the connectors, those marketers prepared to replace CPM with TWB [time with brand] as the real measure of success," said Drew Neisser, CEO of Renegade Marketing, a guerrilla marketing agency.

For example, Renegade created a guerrilla marketing campaign for IBM WebSphere aimed at developers. It created an on- and offline community called barCode, where developers could interact. It also featured events—such as remote-control car racing—and succeeded in raising developers’ perception of IBM as hip and relevant.

• Wireless.

With increased penetration of cell phones, wireless laptops, handhelds and notebook PCs, expect to see innovative uses of wireless marketing by b-to-b marketers and media companies.

For example, is using wireless technology to send news and financial alerts to subscribers’ cell phones.

Using a wireless text messaging service from YellowPepper, Forbes lets subscribers sign up for the alert service on its Web site, then it automatically sends headlines and investment information to users’ cell phones. The service costs $1.99 a month.

Travel, media, entertainment and other industries with time-sensitive information are those most likely to embrace wireless in 2004.

• Behavioral analysis tools.

To fully understand their target audience and more effectively direct communications to them, marketers are using more sophisticated behavioral analysis tools, coupled with traditional research.

Internet research firms such as Nielsen//NetRatings and comScore have recently introduced survey-based tools to complement their quantitative tracking data, and many agencies have developed proprietary behavioral analysis systems to help clients understand their audiences.

"Behavioral analysis will be extremely important in 2004," said Carl Anderson, president-CEO of b-to-b agency Doremus, which launched the Doremus Quotient earlier this year to delve into C-level executives’ media behavior.

"We have an environment where people are inundated and overwhelmed with brand messages," Anderson said. "You really have to get to know your target audience better and understand how to reach them."

• Coping with spam legislation.

E-mail marketers face significant challenges in 2004 coping with anti-spam legislation at the state and federal levels.

The U.S. House of Representatives is set to vote this month on an anti-spam bill that aims to restrict unsolicited e-mail. The federal legislation would supersede California’s anti-spam law, which goes into effect Jan. 1 and requires all e-mail marketers to obtain the intended recipient’s permission before sending e-mail.

"E-mail deliverability is a growing problem for companies that depend upon e-mail," said Helen Roberts, COO of Responsys, an outsourced e-mail provider for global enterprises. Responsys is an opt-in provider and prohibits unsolicited e-mail.

"There is a difference between unsolicited and unwanted," Roberts said. "For b-to-b customers, the focus should be on how to make sure your message is a wanted message on behalf of your customer."

She said marketers can do things such as surveying customers to learn what types of news and offers they are interested in, as well as how often they want to receive e-mail, then personalize messages to those customers.

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