While b-to-b marketers have shifted nearly a quarter of their budgets to digital media—a stark contrast to just a few years ago—they still view in-person events as the best way to build brands and generate sales leads, according to a recent study by American Business Media.
What's more, the ABM study found that the amount of money spent on various marketing vehicles is out of sync with what b-to-b marketers say are the most effective means of getting their messages out.
The survey, conducted by Forrester Research on behalf of ABM, took the pulse of 867 b-to-b marketers across all 21 market categories tracked by the Business Information Network. The respondents offered their perspectives on how the b-to-b marketing mix is changing and the effectiveness of online marketing vehicles.
The size of marketing budgets tracked in the survey ranged from more than $30 million to less than $500,000, while the bulk of respondents (31%) had marketing budgets between $500,000 and $5 million. Nearly 40% of the respondents worked for companies with annual revenue less than $100 million.
The survey asked respondents to rate the effectiveness of various marketing vehicles for generating leads on a scale of 1 to 6, with one being "very ineffective" and 6 being "very effective." Sixty-two percent rated in-person events 5 or 6, and 42% gave similar ratings to online marketing. A similar pattern emerged for building brands, with 60% giving in-person events a 5 or 6, and 40% giving online marketing similar ratings.
"We thought e-centric would blow the doors off everything, but in-person events are still seen as the most effective way for lead generation and building brands," said Gordon Hughes II, ABM president-CEO. At last month's ABM Top Management Meeting in Chicago, Hughes said he expects b-to-b online revenue to grow 20% to 22% in 2006, trade show revenue to increase 6% to 7% and print revenue to rise 4% to 5%. Ad pages are expected to grow just 3% next year.
The survey showed an apparent disconnect between spending levels and what b-to-b marketers say provides the best return on investment. For example, b-to-b marketers will have spent a total of 19% of this year's marketing budgets on trade publications and general publications but just 15% on events.
General vs. trade magazines
Breaking down the 19%, marketers spent 12% on general magazines and 7% on trade publications, even though 47% of those polled gave trade publications high marks for generating qualified leads compared with 35% for general business magazines. For spending strictly online, b-to-b marketers spent 40% on general Web sites such as Google and Yahoo! and 37% on industry specific sites.
"There's a need for marketers to look at how they spend their money against their objectives and argue for a greater allocation for individual publications," Hughes said. "But online is here to stay, and the study reiterates how important it is to use targeted, specific vehicles as opposed to general business titles."
Rick Segal, CEO of HSR Business to Business, a Cincinnati-based b-to-b agency, whose clients include Eclipse Aviation Corp., Hobart Corp. and Kodak, said the study provides a "compelling argument that companies are under-investing in trade media in relation to the importance that decision-makers place on trades as media sources."
Segal added: "As an agency, we haven't pounded the table hard enough about the false assumption that trade media is withering away, in forms of funding, in the face of the Internet uptick."
Scott Shamberg, VP-e-marketing at interactive marketing agency Critical Mass, said individual trade titles can help move the marketing needle, "but it all depends on the quality of circulation and how many of the magazine's readers are qualified."
Online budgets grow
The rise of online as an effective marketing vehicle has forced marketers to reallocate their budgets. "Ultimately, you're going to move your money where you can get the best ROI, which is what you get online," Shamberg said. "The ability to generate qualified leads online is as strong as any other medium, whether in-person or direct mail."
In the years ahead, online marketing tactics are expected to play catch-up with in-person events, according to the ABM survey. By 2008, 54% of b-to-b marketers polled said they expect to deploy online marketing tactics, up from 49% in 2004 and 2005. By contrast, the percentage of respondents who use in-person events as marketing tactics will continue to hover around 60% through 2008.