Net drives b-to-b to new highs worldwide

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"At the moment, international marketers are faced with the double whammy of having to invest in new, global media techniques whilst sustaining traditional media activities." The U.S. is the expert when it comes to using the tools of business-to-business marketing, U.S. and international executives say.

The rest of the world, however, is catching up fast as companies and advertising agencies master English and the Internet.

"We have seen an explosion of business-to-business marketing communications driven by the Internet," says Gordon T. Hughes II, president, American Business Press, New York. "[The Internet] has knocked down many of the barriers to doing business internationally."

"Psychologically, the Internet has blown away the barriers to entry," says Rick Segal, managing director, Hensley Segal Rentschler, Cincinnati. "Interested companies can find your company through the Internet, eliminating the need to go through intermediaries."

Traditional advertising remains a part of the b-to-b marketing mix, but executives cite major increases in the use of telemarketing and database marketing overseas to push one business' merchandise or services to another business.

Judging by the Business Marketing Association, international marketers are very interested in sharpening their b-to-b tools. In the past 16 months, 30 international marketing organizations have joined the Chicago-based BMA, Executive Director Rick Kean says.

"There are few places overseas where business-to-business marketing is organized to the extent that the U.S. is," Mr. Kean says. "We see international business-tobusiness as one of the main areas in which we're going to grow."

There are many countries in which b-to-b marketing is not a recognized discipline and agencies are not always adept at servicing its specialized needs, says Tim Hazelhurst, chairman of IAS Marketing & Communications, Cheshire, England. He is also chairman of the Business Branding Network, a coalition of independent agencies that tap each other's resources and expertise on behalf of clients who work in more than one country.

"However, I do feel that appreciation and understanding are growing rapidly," Mr. Hazelhurst says.

Even in the U.S., b-to-b marketing often remains a "frontier field," says Bill Giacalone, senior marketing executive of Hensley.

"Only 20% of the nation's larg-est business-to-business companies are seriously in the global marketplace" of having more than one product available abroad, Mr. Giacalone says, citing research by his agency. "There is plenty of growth potential for U.S. companies reaching out overseas and for companies overseas to come here."

Steve Sind, president-CEO of the Center for Exhibition Industry Research, Bethesda, Md., says "a significant number" of overseas companies look to the U.S. for trade show expertise. "They're looking for techniques, ideas and concepts that would be applicable to their markets . . . to develop the business-to-business sector."

International ad agency executives say, aside from the U.S., countries leading the way in b-to-b marketing are the U.K., Sweden, France, Italy, the Netherlands and Germany.

Brand emphasis growing

Due to the integration of economies in Europe and competitive pressure to market in every country, marketing executives based there say they believe companies are becoming much more focused on brand and communications.

"Quality and customer loyalty are the two key issues . . . for business-to-business marketers," says Stephane Munier, CEO of Jean Munier-BBN, Paris, a 15-person shop that's a major b-to-b agency in France. "Companies are much more conscious [of] building global brands in the business-to-business sector than they were in the past." Jean is the French BBN representative.

"Together with our colleagues in the U.S., we work with our big clients on an international basis," says Frank Merkel, CEO of WOB Marketing Kommunication AG, Viernheim, Germany, and another BBN member. Through BBN "we meet two to three times a year in management meetings to learn from each other and, for the last three summers, we have met in an annual `summer college' with a real client. The client sponsors the session and gets a multinational strategy from all the participating agencies."

Says Mr. Hazelhurst: "The biggest impact on the European scene is the realization of the value of the brand and the need to develop an identity that works just as well in Prague as it does in Peru."

But, Mr. Hazelhurst says, there are hurdles to overcome.

"The biggest resistance to the process of more professional marketing and communications is the political and commercial structure of many multinational companies."

Resistance from within

"The major, well-known global brands have appreciated this from the start," Mr. Hazelhurst says. But for many overseas companies, "the [central office] often has the philosophy and good intent but the subsidiaries have the commercial -- and often marketing strategy freedom -- and want to know how investment into pan-European or global relationship building around brand strategy will benefit their bottom line this year."

Overseas b-to-b advertising is rising, says O. Burtch Drake, executive director, American Association of Advertising Agencies, New York. But choosing media can be tough. "An increasing number of our members are struggling to find appropriate media in which to place business-to-business [ads], he says. "The trade media [is] not as highly developed [overseas] as it is in the U.S."

Gan Avery, manager-marketing and planning, Eaton/Automotive Controls, Chicago, agrees.

"We use a lot of trade publications here and overseas, but we have found in certain areas that it's not as developed as in the U.S," says Mr. Avery, whose agency, Sawyer Riley Compton, Atlanta, is a BBN member.

While the Net will make b-to-b marketing more holistic, Mr. Hazelhurst says, "At the moment, international marketers are faced with the double whammy of having to invest in new, global media techniques whilst sustaining traditional media activities."

Says Jim Jones, partner in J Squared Consulting, North Brunswick, N.J.: "What the Internet provides is a common language, in that English is the global language of business. For U.S. companies, it alleviates the problem of what local language should they use for their advertising. Companies that announce their presence by creating a Web site or publishing e-mail addresses show that they are open for business -- in English -- and that eliminates one of the biggest barriers to doing business, just by [overseas prospects] signing on."

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