In a recovering economy, b-to-b marketers are taking pains to make every marketing dollar count, from using more in-house resources to finding innovative media strategies.
Although ad budgets overall are increasing, with total ad spending up 9.8% last year, according to TNS Media Intelligence, many companies just don't have the budgets to compete with larger players in their markets.
"Our challenge is being able to compete against the likes of GE Healthcare, Siemens Medical Solutions and Philips Medical Systems," said Cathy Wolfe, director of marketing services at Toshiba America Medical Systems, a Tustin, Calif.-based manufacturer of medical diagnostic imaging equipment.
Wolfe did not disclose the company's marketing budget, but said it was significantly less than those of its larger competitors. "Our competitors are four to five times our size in terms of their sales forces and budgets," she said.
To grow its market share and increase revenue, Toshiba launched an integrated marketing communications program about four years ago. It uses in-house resources for most of the work, although it hired ad agency Ignite, Irvine, Calif., to create print advertising for a trade campaign.
One of Toshiba's most cost-effective strategies is using partner marketing and event marketing to promote its solutions and raise awareness of its brand in the medical industry, Wolfe said.
Partnering on events
The company regularly partners with top customers, such as the Johns Hopkins School of Medicine and Beth Israel Deaconess Medical Center, on industry events.
For example, it recently partnered with Johns Hopkins on an educational seminar at the 2005 Annual Scientific Session, sponsored by the American College of Cardiology. In collaboration with Toshiba, physicians from Johns Hopkins hosted a five-hour course at the conference to help cardiologists understand the latest advances in computed tomography technology, including Toshiba products.
To put together these events, Toshiba created an in-house speakers bureau, which recruits physician customers to speak at industry events in exchange for medical education credits.
"It's really a great way to generate word-of-mouth referrals," Wolfe said. "We partner with organizations that have strong brand recognition."
The cost of hosting the American College of Cardiology event was roughly $90,000, although smaller events cost between $5,000 and $12,000, Wolfe said.
To help its customers promote their advanced technology in local markets, Toshiba also created an "Image Maker Kit," which offers turnkey marketing services; the kits cost about $50,000 to produce. Customers including hospitals and other medical facilities use the kits to create customized advertising and other marketing materials to promote their services, featuring Toshiba equipment.
Toshiba also uses print trade advertising and direct mail to reach targeted audiences and public relations to promote industry recognition.
The efforts are paying off. Last year, Toshiba America Medical Systems grew its revenue by 25.4%, while the medical imaging equipment industry overall grew by only 2.2%, according to the National Electrical Manufacturers Association.
The company has also set records in sales, Wolfe said, and its public relations coverage grew by 80% last year.
"Our goal is always to make the most of what we have," Wolfe said. "We promote every win."
Ad agencies said clients are coming to them with requests for more thrifty marketing programs.
"All of our clients are charging us to find more cost-effective ways of spreading their marketing dollars, so they can get a bigger bang for their buck," said Pete Kovac, president-CEO of Nicholson Kovac, Kansas City, Mo. "We are looking at alternative media vehicles."
One of Nicholson Kovac's clients is AMSCO Windows, a Salt Lake City-based manufacturer that sells through retailers and other distributors to consumers and professional builders.
AMSCO recently introduced a new window product, with only a limited marketing budget with which to promote it. The company decided to continue its trade advertising in publications such as Qualified Remodeler, Replacement Contractor and Professional Remodeling, but it wanted a cost-effective way to generate new leads for its existing distributors and to attract new distributors.
"One of the really expensive parts of the remodeling business is marketing and lead generation," said Steve Sullivan, director of marketing at AMSCO. "If we can reduce [our distributors'] costs and make marketing more efficient, they will do a better job of marketing our product."
AMSCO turned to Nicholson Kovac to create an online marketing tool called "Direct Buddy," which cost less than $100,000 to produce. The tool is a Web-based program that lets distributors customize marketing materials with special offers and other information, then target direct mail campaigns by geography or demographics.
Sullivan said the tool will also help AMSCO close more deals with distributors by offering them a better way to control their costs, generate leads and track responses. The system will be launched June 1.
Media buyers get creative
Chris Philip, senior VP-media director at Doremus, said the agency works hard to help b-to-b clients get the most out of their media dollars.
"It is really easy to spend $20 million, but it is really hard to spend $5 million," he said, noting that agencies need to be creative to find innovative ways to reach an advertiser's target audience with limited dollars.
"One of the things we do is look at each publication and try to come up with different creative units," he said. "You don't always have to run a full-page ad."
For example, for a print campaign for client United Technologies Corp. last year, Doremus worked with The Wall Street Journal to create a new ad unit-the L-that had the impact of a full-page ad at 75% of the cost, Philip said.
"If you're running 10 to 15 ads in The Wall Street Journal and saving 25%, and getting the same impact per page, that is a very easy way to save a lot of money and not give up on impact," he said.
The agency also uses print inserts in some cases rather than ads because of the ability to target them geographically.
"You can print it on heavier stock, it acts as a page break, and it's a very cost-efficient use of media dollars," Philip said.
Inserts can be more expensive to produce than regular print ads, but they can also be repurposed into direct mail pieces.
"There are a lot of things you can do to stretch the marketing dollar," Philip said. "Agencies need to be very strategic in targeting ads and thinking about the most efficient use of media."