Top trends

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The pressure to prove the return on marketing investment and the need for corporate accountability are driving many of the key marketing trends for 2005. From showing ROI on specific marketing campaigns to justifying the position of the CMO at marketing organizations, the pressure is on.

This demand has been created by several factors: high-profile corporate bankruptcies and accounting scandals, marketing budget cuts during the recession and scrutiny from shareholders.

Now, in a post-recessionary environment, marketers are keeping a close eye on every facet of their marketing investment, starting at the very top-the CMO.

The following are some of the key trends that will shape b-to-b marketing this year.

1) CMO scrutiny

Chief marketing officers are in the spotlight, and not just at traditional marketing organizations. Media companies, such as CXO Media, and ad agencies, such as Saatchi & Saatchi and Y&R, have hired CMOs to lead the marketing strategy at their organizations.

Scrutiny is definitely on CMOs, who must deliver measurable results. In some cases, their pay will reflect their performance.

"I believe an increasing number of CMO job descriptions and compensation schemes will incorporate clear performance incentives," said Tom Simons, president of Partners+Simons, a Boston-based marketing communications agency.

Simons said one of the agency's clients, which he declined to name, has defined brand favorability metrics that are used to evaluate the performance of the CMO. The CMO is tested semi-annually on the metrics and has a financial incentive for meeting them.

2) Efficacy in measurement

A new buzzword in measurement is "efficacy," a term more often used in testing the effectiveness of a new drug in a clinical trial-does it cure the disease? Now, it is being used by marketers to define the overall effectiveness of marketing for the value it brings to the organization.

"The recession was about efficiency optimization," said Courtney Buechert, managing director of McCann Erickson, San Francisco. "Efficacy goes way beyond that. It is about impact."

For example, McCann client Microsoft Corp. looks at metrics such as "efficacious branding impact," Buechert said. It considers variables such as the number of different ad programs that are hitting customers on the same day and how that impacts the overall brand message.

"Customers are looking deep into their organizations and are asking marketing, sales and operational questions," he said. "If I run an ad campaign, how will that impact the desired effect?"

3) Better lead management

A big area for improvement this year is lead management.

According to a study released last month by the CMO Council and the Business Performance Management Forum, 53.4% of respondents said their company has no formal process for generating, clarifying and validating leads.

"Most companies have a very short quarterly focus on sales," said Donovan Neale-May, executive director of the CMO Council.

"Companies need systems for the requalification of leads and data to get true visibility into the customer."

One company that has developed a sophisticated lead management system is IBM Corp., which is now working with its relationship agency, OgilvyOne Worldwide, to provide its clients with lead generation and management through a desktop application.

4) Partner marketing

Forming strategic partnerships will be a key focus for b-to-b marketers in 2005, as they look at leveraging the strengths of marketing partners, distributors and channel partners.

According to a survey of senior marketing executives by marketing communications agency the Capre Group, 60% of respondents said they would be spending more money this year developing strategic partnerships than they did last year.

"Every client is trying to figure out its partner marketing strategy," said Michelle Bottomley, general manager of OgilvyOne Consulting, North America.

The agency has formed a marketing council of its key b-to-b clients, which meets once a quarter to discuss best practices such as how to develop strategic partnerships.

5) Online video ads

More marketers are embracing online video ads as a result of advances in technology that are bringing near-TV quality to online advertising.

Web publishers such as the Wall Street Journal Online and are rolling out new video opportunities for advertisers, including the ability to sponsor video editorials and track time spent watching video ads.

Rich media companies such as Unicast and Eyeblaster continue to develop new online ad formats, such as Unicast's side-by-side video commercial and Eyeblaster's Commercial Break ad format.

Advertisers including Sun Microsystems, IBM Corp., Microsoft Corp. and AT&T Corp. are just a few of the b-to-b marketers that have used online video ads.

6) Guerrilla marketing

Guerrilla marketing, which uses unconventional marketing tactics to generate a buzz about a company and its products or services, will be used by cost-conscious b-to-b marketers this year.

"What has happened in traditional consumer marketing, which is shifting from mass marketing to viral, guerrilla marketing, will be applied to b-to-b as well," said Greg Stern, CEO of Butler, Shine, Stern & Partners, San Francisco. "It's all about getting publicity."

Stern's agency is working with a number of clients, including speech recognition system company Nuance, on guerrilla marketing techniques, such as precisely targeted events.

7) Behavioral search

B-to-b marketers will make more use of search this year, integrating it with behavioral analytics.

"Search has been a data-driven industry from day one," Niki Scevak, an analyst at JupiterResearch, wrote in his Weblog.

"Now, with analytics systems in place, other areas of advertising, such as ad optimization, will ingrain the same sort of culture."

Scevak noted a trend called analytical data economies, in which service providers pay for behavioral data.

"The most obvious is the bridge between search and behavioral ad networks like Tacoda," he wrote.

8) Instant messaging

Instant messaging is expected to come into its own as a marketing medium this year.

"The biggest trend we're seeing now is that a lot of companies are beginning to realize IM has some value," said Marcel Nienhuis, market analyst at the Radicati Group.

"I see more e-commerce sites using it as a way to communicate with [customers] rather than picking up the phone."

9) Digital editions of print magazines

Digital replicas of print magazines will continue to attract b-to-b publishers this year, in large part because they reduce paper, printing and postage costs.

Advanstar's CADalyst magazine recently began offering digital magazines to its readers, but only after the publication's research indicated that readers wanted the format, according to publisher Dana Fisher. Now, 14,000 of 60,000 of CADalyst subscribers use the digital edition.

Some media buyers are skeptical, though.

"I think the biggest mistake people make when they go online is they start by trying to replace it with another medium," said Sarah Fay, president of Carat Interactive. "It's like putting TV ads on the Web. You can do it, but will it be successful? Probably not."

10) Increased media M&A activity

After the desolate years of 2001-2003, last year looked like an oasis to media investment bankers as M&A activity increased markedly, with the number of deals up 29.2% and the value up 46.9%, according to media investment bank Jordan, Edmiston Group.

The industry expects an even better year in 2005, thanks to a generally stronger economy and improved performance at media companies.

"For the first time in a long time, the P&L numbers are heading in the right direction," said Richard Mead, managing director of Jordan, Edmiston. M

Media Editor Sean Callahan and Senior Reporter Carol Krol contributed to this report.

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