Billions of dollars are spent on b-to-b advertising, events, direct mail, trade shows, webinars, sales calls, glossy brochures, logowear and other marketing expenses. But do b-to-b marketers really know what sticks?
How much of these billions are wasted? Marketing Evolution, the marketing return on investment consultancy behind the new book "What Sticks," used a patent-pending marketing ROI measurement and observed that 37% of advertising is wasted. What's worse, the percentage of waste is a bit higher for b-to-b marketers.
This needn't happen. B-to-b marketers can improve marketing and sales effectiveness through systematic measurement of a wide variety of marketing programs, including trade shows, Web sites, CRM, and magazine and online advertising.
Consider the case of two high-tech marketers. Both said that the more business decision-makers perceived their company as an "industry leader," the shorter the sales cycle and the higher the win rate. Therefore, both aimed to increase industry-leader perception. One chose building a massive Web site as part of a sports sponsorship to highlight leadership. The other used advertising.
Using Marketing Evolution's ROMO methodology we reported a seven point gain in the leadership attribute among business decision-makers caused by the Web site. (For a full case study and research details see www.marketingevolution.com/b2b) The other company used advertising-primarily online display and magazine advertising. We reported positive brand associations (such as industry leadership) increased by three points.
The Web site strategy was more than twice as effective compared to advertising-and that finding is fairly common. When Marketing Evolution examines the impact on people visiting a Web site compared to advertising, Web sites typically are more effective. But that data point alone can be misleading. Measuring effectiveness alone is not the end of the ROI story; it's just the beginning. Return on investment analysis requires analysis of the total number of target audience influenced as well as cost per impact to get a complete ROI picture.
While the Web site was more than twice as effective per prospect reached, it reached a much smaller audience than advertising. The advertising produced 10 times more people that perceived the company as an industry leader. When one factors in the cost, the Web site racked up a bill of $92.60 per influenced prospect. Whereas the advertising cost per influenced prospect was only $7.40. The ROI conclusion: Advertising, in this particular instance, produced 12.5 times more people influenced to see the company as an industry leader per dollar spent.
B-to-b marketers need both Web sites and advertising. Good ROI analysis is about the mix. Each marketer should conduct its own research to better understand the dynamics of effectiveness, ROI and the mix.
Knowledge is more than power-it's profit. If b-to-b marketers systematically measure their programs, they will improve marketing ROI and achieve competitive advantages over those that don't stop to measure what sticks.
Rex Briggs is CEO of Marketing Evolution and lead author of "What Sticks, Why Advertising Fails and How to Guarantee Yours Succeeds," published this fall by Kaplan. He can be reached at [email protected].