Direct experts examine the effects of emerging channels

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To take the pulse of the industry, BtoB Senior Reporter Christopher Hosford contacted experts to solicit their views on direct marketing trends and the rapidly evolving forces of change brought on by digital channels, social media and other emerging factors. Participating in the virtual roundtable were Bruce Biegel, managing director, Winterberry Group; Adam Christensen, manager-social media, IBM Corp.; Michael Mendenhall, CMO, Hewlett-Packard Co.; Laura Ramos, VP-principal analyst, Forrester Research; and David Meerman Scott, marketing strategist and author of “The New Rules of Marketing and PR,” (John Wiley & Sons, second edition, 2010). BtoB: The rise of social media networking and all things digital have been truly explosive this year. What's your take on social media's impact on b-to-b marketing? Adam Christensen: I didn't come up through a traditional marketing experience, but rather through communications and public relations. Nevertheless, today there is a blurring of the lines that had traditionally kept these functions separate. The blurring has a lot to do with social media, but technology as well. Now, everyone is a publisher, with the ability to do things that before had big cost barriers associated with them, or rules about communicating with the press. It used to be the same with marketing, where you couldn't just throw up a video on NBC in the afternoon. Those barriers don't exist anymore. There has been a dramatic shift from when marketing communications was the sole arbiter about what goes out to the world. Now, marketing communications doesn't control the message or even the messenger. At IBM, for example, there is equal footing between employees and the institution. Our focus now is how to get more and more employees engaged and participating in the social conversation. Michael Mendenhall: This past year, with the macroeconomic climate and the pressures on marketing, marketers' responses to a dynamic market also have been dynamic. People have taken a hard look at their marketing spend, analytics and the entire marketing portfolio, and really begun to scrutinize the investments being made and where the returns are coming from. Every marketer is looking to become more focused, precise and engaged with their customers. They're looking for better analytics and better insights from the data they have, and then adjusting to a dynamic marketplace. BtoB: A dynamic marketplace where everyone's a publisher? Sounds revolutionary. David Meerman Scott: Yes, we are literally in the middle of a marketing revolution. Before you had to pay to publish, such as advertising in magazines or newspapers, for example, or buying a list or floor space at a trade show, or begging for stories in the public relations mode. Now, any organization can create something that's fascinating, and interesting and potentially shareable in reaching the people they're trying to reach. That's particularly important for b-to-b organizations because they reside in narrowly defined niches. BtoB: How well are companies embracing this new reality? Laura Ramos: In a Web 2.0 world, marketers are trying to figure this out, but it goes against their way of doing things. The buyers are expressing their needs, they're searching, visiting sites, joining LinkedIn and Facebook, and chatting. But that means they're not looking for a vendor; they're searching for information that's interesting. How the direct marketer inserts himself into this conversation is a real challenge and requires a new set of skills and tools. Scott: The revolution is still foreign to the majority of b-to-b companies I speak with, and it's remarkable to me. The Web is now 16 or 17 years old, and b-to-b marketers still believe their job is to buy some kind of attention. There's nothing wrong with that, but there are now incredible other options that few organizations are taking advantage of. Why? People are scared of doing something they think their superiors won't approve of. There's the fear of getting fired, of course, but also another fear of trying something new where people don't know the rules of the game. They're much more comfortable doing what they've always done, creating brochures and basic Web sites, doing branding initiatives, figuring out their logo, going to a trade show, hiring a PR agency, beating the drums to get into a trade journal. And by the time they do all this, it's 5 o'clock and they don't have time for anything else. BtoB: Does social media just inform customer intelligence, or does it have the potential to impact on transactions? Bruce Biegel: When we look at social media, there's already about $1.3 billion in advertising spend, with about $700 million of that in display advertising. So the majority of spend on social media sites is coming from display. But it's a softer sell, a “Come look at me, learn about me and see if you're interested in me.” It's indirect lead generation, more brand first and lead-gen second. Christensen: I've heard that people have used Twitter to sell things or to talk about discounts. That's great for them, but IBM is a b-to-b company and not just about flipping boxes. It's about relationships. So social media can have a great impact around anything with a strong relationship about what we sell. Think about the way things are bought and sold in a b-to-b environment, with longer sales cycles and the many things that influence that. That sales cycle is influenced by the relationships you have, between vendor and supplier as well as between many other layers of people. The value of social is in building stronger, more connected relationships that extend beyond the traditional face-to-face kind. It's now more of a continuing conversation, so that when two people do actually get together again, face-to-face, the relationship is better. Mendenhall: True, social media is just an amplification of word-of-mouth. We've always had word-of-mouth; it's just never been scaled. Social does that. Now, instead of everyone being within six degrees of separation, we're now all one-to-one. What's important is how you use applications to do this. This isn't the old push model; it's become a dialogue. Marketers need to be incredibly careful to not market to people but listen to a conversion. At HP, we use social to provide insight into R&D, opening up multiple R&D labs for our social communities. This accelerates how fast we can go to market. We also use it with customer service. This has given us incredible insight and has become a very rewarding experience as we've seen our customer service scores go up. So social isn't just marketing communications. BtoB: But can social marketing lead directly to sales? Ramos: From a demand-generation standpoint, I think it's bogus. Anyone involved in direct, interactive marketing who thinks they can open a Twitter account and have the leads flow into the pipeline is badly mistaken. I'd say you have to treat social like any other medium. Dell Inc. talks about their success with Twitter, but what they're doing is putting out promotions for steep discounts for refurbished equipment. And they're selling a pile of it. But would online ads or e-mail to their installed base do just as well? I don't know. What's interesting about Twitter is that 60% of the people who join stop within a month or so. Scott: As with every other channel it has to do with understanding where are the people you're trying to reach. They may still be going to trade shows, but increasingly they're also on LinkedIn and Twitter. And virtually every niche market has some forum, or chat room or blog where people hang out. Now, as for commercializing all this, I like to think of the Web as a big city, where eBay is the garage sale, Amazon is the bookstore, Main Street is the e-commerce sites and b-to-b companies are the office buildings. Social media—such as blogs, and forums and the like—are essentially private clubs and saloons. If you think of it in these terms, the reason you go to a forum is the same reason you'd go to a Rotary Club meeting: You want to hang out with people like you and have an interesting relationship with them. You wouldn't go to a cocktail party in a strange city and whip out your business card and start hitting up everyone you could see. Social media works in having people get to know you and know you're helpful. And when somebody says they need a product, you'll get the referral. Christensen: There is no doubt that money and relationships go together and can lead to serious leads that can be put into a CRM system, with revenue won through that. It just may be a slightly more circuitous path in some ways. Social media isn't a sell-first context. It's relationship first, then sell. Twitter, for example, is good for engaging with people you don't know, while Facebook is better at engaging with people you do know. Blogging, meanwhile, is a great opportunity for extending thought leadership, and YouTube, for employees sharing things. BtoB: What are some big challenges? Ramos: There is potential with private corporate-branded social sites, but it will be the Wild West for a while. Everyone is saying they have to set up social communities, but we don't know the center of gravity yet. Will it be communities with very strong brand associations, or will it be more like, for example, an online compliance site aimed just at compliance professionals? That's a model I find very intriguing, because it's about the issues and topics that the community cares about, not about the vendor. Biegel: The challenge that marketers are having with it isn't in the lack of tools. We have great listening tools. But rather, the challenge is in figuring out where it fits within the marketing organization. Who will run the social initiative? My ad agency? My PR agency? Is it within my own PR department or with someone in marcom? Even as people are looking to understand where social fits within the marketing operations structure, right now there aren't a whole lot of dedicated social media people either. There is somebody who runs e-mail, and search and display. But is there somebody who runs social? Probably not, for the majority of marketers. One thing's for sure, the CMO cannot own it because he's not an operations person. But generally, that's where social lives today. BtoB: Tell us a little about emerging marketing metrics? Christensen: At IBM, we don't have companywide metrics and dashboards for social marketing because the measurements we use come down to the business unit or project team area. For example, our Lotus Software team just did an open-source product development project, and that very much involved social media. But the metrics from that are very different from our consulting group trying to extend thought leadership. We generally use lots of tools, listen, try to understand the conversations and try to measure engagement. Biegel: The majority of display advertising spend on social media sites is in direct marketing, not brand marketing. So what's happening is [that] marketers are using display to drive lead-gen, but they haven't yet figured out what the metrics are. Is it engagement? Click-throughs? Nobody has yet figured out the attribution model for display advertising on social sites. And until they figure it out, it will be difficult to decide how much to spend and how much traffic you can drive. By contrast, the listening side is much easier to deal with than the acquisition side. It's read and react. So that's the first layer of corporate adoption, the listening side. Brands that don't listen can be caught unaware and experience significant brand risk. I'm thinking that it will be PR firms that will have to adopt the listening tools, to get out ahead of the issues and bring that to their clients. Ramos: From my perspective, a lot of the display ads on social sites are very consumer-oriented. You don't do b-to-b ads on CNN, nor would you on Facebook. You might with LinkedIn, but then it becomes a question of where the ads appear: Are they a part of LinkedIn that matters to me? There needs to be a correlation between groups and placement on LinkedIn, and that has yet to be tapped.
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