This is your downloadable version of a presentation first conducted live Aug. 10, 2006, by:
Anne Holland, President
Stefan Tornquist, Research Director
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Anne Holland: Good afternoon. And welcome to MarketingSherpaís Annual Teleconference on Business Technology Marketing, Practical Benchmark Data. This year of course is 2006. I am thrilled to be here on our third annual teleconference on this topic. I am Anne Holland. I am the President of MarketingSherpa and with me today is Stefan Tornquist who is our Research Director. Now he led the team that actually did the research for this benchmark guide and all of our benchmark guides. Welcome Stefan.
Stefan Tornquist: Hi, Anne.
Anne Holland: Now, everyone who is listening into today you should have received in the same email where you got the phone number, you should have received a hot link to download our PowerPoint presentation. Itís actually a pdf but itís our PowerPoint slides in the pdf. If you donít have that just grab that link, dig it out of your email and print out those slides or look at them on your screen because weíre going to be talking to the charts in that presentation. If you lost the email or you canít find it, no problem just zap a quick email over to firstname.lastname@example.org. Our service people, Ron and Sharon are literally sitting here right now holding copies of the presentation waiting to email it out to you. Usually about three or four people donít have it. So theyíre ready to get it to you. Yes, you can download this, you can print it out, and you can share this presentation with your colleagues. So, hopefully everyone can enjoy these fabulous slides.
Now one of the reasons, and if youíve got your presentation, please turn to page two, one of the reasons why I am so happy and grateful to be handing out these wonderful data charts is because so many of you helped out this year to make this guide the best one ever. In fact Stefan, you had 1,900 business technology marketers, came and helped out and gave you the data.
Stefan Tornquist: Thatís exactly right. Itís unusual to get such a round number but thatís how it shook out.
Anne Holland: I was like, thatís not a real number. But it was the real number.
Stefan Tornquist: Thatís right.
Anne Holland: Okay. So as you see, not only did 1,900 business technology marketers, they came online. They answered different parts of our survey. Also, a lot of you very graciously allowed our research team to contact you via telephone. We only talked to people who proactively asked that we talk to them and agreed to it. And we asked more questions there and were able to really dive down into whatís working in business technology marketing. And then we also did an observational study where Stefanís team went out and actually looked at, in particular software marketersí websites.
Now when we talk about business technology I want to be really clear. This is a study for everyone who is a business-to-business marketer in anything thatís in a technology related field. You could be marketing you know email broadcast ASP services. You could be marketing PCs. You could be marketing high-end enterprise software. You could be marketing servers, all sorts of different things like that. You could be marketing consulting services that relate to that. I mean IT consulting services are a huge marketplace these days. So thatís all the different things that you could be in. Itís a fairly broad field. Whatís interesting of course about it though is that a lot of you have the same prospects that youíre targeting.
In addition, Stefan it looks like we had two different, we had two partnered studies. One of them in particular, the CNET partnered study where we actually surveyed people who are on CNETís business-to-business site, such as ZDNET and asked them what they thought about marketing, email newsletters and blogs. In addition, we gathered best of secondary research from almost a dozen other research organizations who also study this field. Some of it was exclusive just from Marketing Sherpa. So you have all this enormous amount of information we tried to compile in one place. Now letís move on. Letís go to the fun stuff, the charts.
If youíll turn with me to page three of the presentation, okay, Stefan this is the first chart. It is Marketing Spend of Business-to-Business Technology Marketers. Can you explain what this number is, extremely clearly to me because it looks like a very small number?
Stefan Tornquist: Well this is the number that a lot of businesses use as a measure and itís the percentage of gross revenues. So itís a hard business number and the percentage of 3.6 is thatís very close to what a number of organizations identify across the industry as an average. But as we can see that, you know that doesnít really reflect the range of whatís happening. At the low end of normal range, actually less than 1% of gross revenues, we typically find manufacturers in niche markets. Those that donít really see a lot of need for you know any sort of brand marketing. And typically spend a lot more on sales force because theyíve identified, very often they have fewer, than a 1,000 prospects nationwide. And so theyíre able to target those folks with sales people directly. They do tend to maintain email programs and such and typically focus on events for those prospects.
Then as we move up the range, we get to other kinds of companies, service industries, ASPs, those companies that are sort of newer to the space, also tend to have higher percentages. Now of course there are outliers here. There are companies spending more than 10% of gross revenues and marketing. Those definitely tend towards companies that havenít been around for more than ten years. Companies that are looking to establish a name and go for share. They also, you know for companies that havenít been around very long, and certainly for those companies that are venture-backed, gross revenues doesnít mean so much because they donít have any. So in cases like that the percentages are, you know well total money in the bank really.
Anne Holland: Now Iím assuming this does not of course include any sales compensation or sales force costs. It really is strictly marketing.
Stefan Tornquist: Thatís correct.
Anne Holland: And Iím also assuming it doesnít include salary for the marketing department?
Stefan Tornquist: Oh, no it would include any internal salaries and vendor fees.
Anne Holland: Wow, so thatís very, it seems very low to me. Is it because mainly business technology is so heavily driven by the sales department?
Stefan Tornquist: Well in part. Also, gross revenues are the big --
Anne Holland: A huge --
Stefan Tornquist: Number that folks are dealing with, so.
Anne Holland: Exactly. Itís a very big number. Why donít we move on? Now this next chart on page four, this is the one that a lot of people wonder about because they want to know how to break up their budget. And what is the normal breakout, off-line versus online. You know I talk to so many marketers in business technology and often theyíll tell me how theyíve really been changing their budgets or theyíre leaving the trade publications, theyíre leaving print. Theyíre leaving some of the classic you know some email things they used to do, although direct mail is certainly working for some. And theyíre telling me that theyíre spending a lot more online. I think I expected to see a very high percent of marketing budgets in online. Was this as surprising to you Stefan having looked at those numbers for three years?
Stefan Tornquist: Well I think if you look at the average itself, itís not so surprising but this is one of those cases where the straight average of 31% really doesnít tell the story at all. Large organizations, Fortune 500, Fortune 1000 organizations, theyíre spending generally less than 10% of their budgets online, even in technology. Those are companies with brand presence even on television and when industry wide figures about online marketing go out and you see 9% is being spent online, these are the kinds of companies that folks are talking about. But when you start --
Anne Holland: These gargantuan road shows and all sorts of other fancy-shmancies that theyíre paying for.
Stefan Tornquist: Right, online is relatively inexpensive in comparison with some of those tactics, certainly television, and print being far more expensive. And so, as you move up the or down the chain of company size, you see the percentage rising very steadily. I mean theyíre of course solo practitioners who in our study tend to be either consultants or small software designers who are you know have one or two products that theyíve developed, and for those folks online represents the majority of their spending. And typically with those folks, it tends to be search but there is some variation there. Itís the small, medium organizations who are spending probably what you would have expected the numbers to be between 25% and 37%.
Anne Holland: Um-hmm, thatís very interesting. Okay so really, what matters more is how big you are, and perhaps less what industry youíre in. You know you had mentioned because initially we were planning to slice all this data very specifically by industry, are you in software, are you in hardware, or are you, you know in services? And Stefan you had mentioned to me that many of the numbers didnít see to vary as much depending on, but when they do you mentioned it. But it didnít vary as much depending on that as it did either the size of the organization that was marketing, how big this company was, the marketersí company was or the size of the company that they targeted that seemed to make a big difference too.
Stefan Tornquist: Yes, thatís right. I mean in part the budget numbers, is one of the hardest ones to identify and in a survey format, so the more you slice it down but the less exact it gets. Thatís one of the reasons that we went in this direction because we were able to have a nice solid set of data. When you start slicing that by nine different verticals, you start getting a little big of variation that you donít want. But yes itís absolutely true that the science of the organization itself rather than, Iím sorry I hope you canít hear the thunderstorm taking place here in New York. Rather, than the size of the targeted organization that seems to differentiate between or to determine the percentage of the spent.
Anne Holland: Okay. Why donít we move on to page five? Now this is one of, I think this is the sexiest charts in this entire presentation because really what it talks about is the prospect. You know, which marketing moves the style? In this case, itís what actually influences these decision-makers. Now Stefan correct me if Iím wrong, you do the 633 surveys business decision-makers who we asked what made a difference when they were making decisions about buying technology.
Stefan Tornquist: Right. And specifically we asked the question, think about a purchase you have made, not you know, not what you read every day. Not what tactics do you notice, but we asked them to identify a specific decision they had, purchase decision that they had been a part of in the last year and to credit those marketing tactics that played a role. So of course, the numbers add up to much more than 100% because as we know a technology buying process is a long one and may different factors come to bear. But I really, I liked that question and I think itís one weíll continue to ask by having people latch onto a specific purchase, it focuses them.
So, as we look down this fairly long list, you know what are the surprises? Well I think the emerging tactics did fairly well. You know some people might look at this and say, well you know all of these you know blogs from vendors and podcasts, these are very small numbers but I think that for emerging tactics, and thatís certainly what podcasts are, or blogs are up there at 10%. So thatís, thatís a strong response. But even those down under 5% I think for some, for this group in particular to be able to look back and think you know I listened to a podcast that was part of this process, is really a validation. One number here that Iím a little suspect of to be honest is the 2.8% that said a cold call telephone inquiry played a role. I suspect that that number is higher. But --
Anne Holland: Nobody wants to admit it --
Stefan Tornquist: Nobody wants to admit it, even to themselves --
Anne Holland: Yeah, yeah because they donít want to encourage it --
Stefan Tornquist: And over the course of --
Anne Holland: Scared --
Stefan Tornquist: You know we both take a look at what sales cycles are doing and many companies take I think a year to buy something, even longer actually. I think in the course of that you may forget that your first introduction to a sales person was a cold call and maybe credit that to an existing relationship. Itís a little bit like spam. When you ask people whether they ever click on a spam of course, they say no. And yet we know that sometimes people do.
Anne Holland: Yeah, I think a couple of things that are interesting here, which is that aside from word-of-mouth, the top two things are off-line, you know youíve got 41% at conferences and trade shows, and 40% at you know paying attention to print magazines. So they really do pay attention to print magazines. And I think thatís very interesting.
Stefan Tornquist: They absolutely do. You know the off-line tactics with all of the interest in online it does get lost on as budgets are moving around, you know the talk is about the budget moving, not necessarily around the fact that the real, the big numbers are still off-line and will continue to be for a while. But online tactics you know the magazines, you know newsletters, natural listings, those come in a strong second and when you consider the relative costs. You know if we have an ROI figure up and down this list, we would see probably the best ROI figures in those online tactics.
Anne Holland: One thing that I also think is interesting is just given that the ________ of your PR budget should be fairly substantial still. Itís not just placing ads in magazines and online magazine websites. I mean although of course that works and weíve got plenty of data in the guide about that, but it has to do with PR and in particular, the PR you better had if you donít already in-house, a calendar of every possible award or review that your product could ever be up for, there are a zillion of them. I think itís something like more than 400 in business technology that you can be up for, I mean yes you can go to the SIA, big annual awards but thereís a heck of a lot more. Almost every magazine has of course regular reviews in their calendar of different types of things and they often have readersí picks, editorsí picks, all sorts of awards. And I would be managing an awards calendar very heavily if I were you. Thatís the kind of content that tends to not only be something that you can brag about later and your sales reps love it, but it also gets you that mention in a really good spot in the print magazine and the online magazine.
The other thing I think is very interesting is that the blogs from other technology professionals was at 19% compared to blogs from industry analysts and media. And also, the word-of-mouth is so high. It seems like this is technology buyers are letís just say, they donít completely trust the experts, the people who are the so-called experts, who letís face it, ten years ago the only people really you could learn about, about technology were the magazines on the analysts and the experts. Now you can go online and find a wealth of other people kind of sounding off about your product. That tells me you need to be watching the blogs here very carefully. You need to be tracking it. You also need to be tracking different types of forums where different technology people and some executives are posting opinions about your technology. Anything from you know little discussion groups to online forums. There are so many of them and you need to probably need to have someone on your staff who is routinely checking them. There are pretty cheap software programs that can track a lot of this stuff for you too. You need to be looking out where are, people saying oh, you know who does who recommends. So if theyíre not getting it from word-of-mouth from people, if they are going online and surfing other bloggers, other people in their industry, you know what theyíre hearing about you.
Last but not least, I hope with word-of-mouth that youíre talking internally about what can you do this fall perhaps, or add to your budget for next year that would encourage positive word-of-mouth among your clients to prospects. Iím not talking about bribing people though. Iím not talking about oh gee, you know weíll give you, you know an iPod every time you tell somebody, something great about us. There are other types of loyalty and evangelism campaigns that are out there. We certainly track them and there are other evangelist trackers as well. Weíre adding a new part to our website that will include case studies in evangelism. There are all different ways that you can add a little evangelism to your mix. And it has a significant impact and as you can see here. I think a lot of marketers are so focused on getting that email campaign out and then that white paper posted and you know getting the next webinar done that they forget about client evangelism which is so critical. I think the extent of a lot of client evangelism efforts are gee we hope people will forward our email newsletter. And I think thereís a lot, I know that thereís a lot more you can do beyond that.
Anyway, letís move on. And this is, this next chart on page six, we put this chart in here specifically because trade shows are still such a huge part of the influencer cycle. This is obviously a significant part of your budget and itís certainly, hugely influential still. I wanted to know which trade shows are the most influential ones. If youíre going to spend your money, where do you spend it? I know that when I, myself was a business-to-business marketer we would often make trade show decisions especially in the beginning based on what the management of the company told us to do. You know the CEO would say I want to be here. And it was kind of the same decisions that they would say if they talked to the PR firm, theyíd say I want to be on the cover of the ďWall Street Journal.Ē Well you know thatís all very well and fine, but (a) it could be awfully expensive because you really do have to work hard to get that. But (b) does it really hit the influencers who are specifically going to buy your thing? Well guess what here you can see just as with PR the vertical seems to be much more powerful. Stefan can you talk us through this chart?
Stefan Tornquist: Sure and one thing I should explain about this chart is that weíre comparing these numbers if you look at say total leads for a general show over on the left-hand side, coming in at 83. That 83 is per 1,000 attendees. So thatís the measure. Now of course, a lot of shows are far smaller than that and thatís going to vary, vary the response but the reason we repeated this, this question this year was we really didnít expect it to change much. And it didnít. But itís still an important lesson and sometimes if data gets more than a year old, people donít pay as much attention, so even though it doesnít vary much weíll probably continue to with this one. So itís a, itís an elementary lesson but one thatís worth, one worth repeating that the qualified leads, the ratio of qualified leads is about 50% higher out of those vertical shows.
Now of course there are different benefits to the larger shows and you know thereís a significant element of brand in attending. But those qualified lead numbers do suggest that those small, targeted shows do ultimately pay off and they tend to be cheaper. But the one thing about trade show marketing in general and this is I think almost universally true outside of the Fortune 1,000 is that itís the hardest, itís the hardest for marketers to really keep track of depending on how many folks theyíre bringing to a trade show. How many of those sales people are having their own conversations, collecting their own cards, it can be very difficult at the end of it all to really get a firm grasp on how many leads were generated.
We heard a few tricks on keeping those things together. I spoke with one marketer who has threatened her sales team with keeping their, keeping the commission back if they hold a card back from a show. So eventually, she finds out that a card originated at say Ad Tech, and was never credited, however she admits privately that thatís not a very easy thing to do.
Anne Holland: No, no. The main thing about these numbers is that it also helps you if youíve got an executive on your team who is dying to give speeches, and almost everybody does have someone whoís a wantta be diva. You know what, this is a great way to convince them they should try out a few vertical shows and thatís a great way to break them in anyway. They need some breaking in just to learn how to handle the crowd and learn how to handle giving effective speech and all of that. But you know tell them hey, great. You know Iím going to pop you. Iím going to get you some speaking gigs at vertical niche shows. Theyíre easier actually often to get the speech at anyway. And to get a speech anyoneís going to pay attention to, and then you know great. Weíre gonna get, probably end up getting better leads from it and doing fairly well. So itís a good motivator to pop somebody onto a planning, get them into some vertical shows or some luncheons or something like that.
Stefan Tornquist: And one other thing I wanted to throw in and itís sort of related to your press, the importance of press that you made earlier. The, one of the things that I hear about consistently and I guess itís because of the folks that Iím talking to but is the success of doing internal research projects and turning those into public relations opportunities. I mean Iíve got a skewed view because these are the folks Iím talking to all the time. But in terms of getting shows, speaking gigs, and getting press thereís nothing like a little piece of research in your niche to generate that notice.
Anne Holland: Oh, yeah if you can dangle --
Stefan Tornquist: Plus itíll provide data for me --
Anne Holland: Thatís fabulous. By the way, for anyone who joined us I made this announcement, we are looking at a presentation that was included as a hot link in the welcome email that we sent you. This hot link is a pdf of a PowerPoint presentation. It is the same hot link. It is a hot link in the same email that had the phone number that youíre calling right now. If you donít have access to that email and you did not download your presentation, please email over to email@example.com and they will slip you a copy of that super quick. Yes, you can download. Yes, you can print it out. And yes, you can share it with your colleagues.
Okay, why donít we turn to page number seven of our presentation? And actually, the title of this page makes me laugh because itís got the word ďclassic.Ē I mean the word ďclassicĒ in online advertising I never thought Iíd see those words together in a phrase. But now online advertising is ten years old. And in fact, I think I ran my first business-to-business banner ad ten years ago, so here we go its ten years old, and now we have classic business-to-business online advertising tactics. Now these tactics, Stefan you actually broke these out not only by tactic but then by the type of prospect that the marketer was marketing to, is that the case?
Stefan Tornquist: Thatís exactly right. We looked at what tactics are best when youíre targeting large organizations verus medium and small ones.
Anne Holland: Okay, so you could be any size organization yourself, itís just who your prospect is?
Stefan Tornquist: Thatís absolutely right.
Anne Holland: Okay, so what we see here are some really big differences depending on prospects which, of course makes perfect sense because its prospects were really different. Can you explain some of the biggest changes?
Stefan Tornquist: Sure. Well I think perhaps the most interesting to me is how marketers perceive the effectiveness of online ads, whether those are in general business sites or industry specific sites. For marketers that target larger companies they overwhelming feel that those general business ads are very effective because perhaps they connote a certain level of brand awareness, a certain stature in the community that large companies are comfortable with, you know you sort of need to be known in the game to be a prospective vendor to those large companies. As you get down to the, those who are marketing to small organizations they find those tactics much less successful in part because of the high price that one needs to pay to get on those general business sites, you know of Forbes.com, etc. Now when you look at industry specific sites, overall the ratings are pretty high across the board, but you see that organizations targeting medium-sized orgs, feel like thatís really a great, very effective tactic, nearly 80% consider it very effective.
Anne Holland: The one thing that I think is interesting is the white papersí syndication service. It is so incredibly effective. First of all, itís so incredibly effective. And Iíll talk to marketers even as recently as yesterday, who will ask you know how is it going syndicating your white paper and theyíll say what do you mean? What is that again? So it may not be as universally used by every marketer who could be using it as a tactic. I think one of the reasons why white paper syndication works so well is that your white paper is there when the prospect is ready to go trolling for it, and I know that weíve had quite a bit of data around the kind of prospects that tend to troll for white papers, who tend to be heavy influencers of business technologiesí buying decisions. And they tend to be people who are sometimes a little bit lower down than you would think in the totem pole in the company. Often itís someone who had been delegated to by the committee or by the management team, hey go out and figure out who we should send the RSP to and theyíre actually the one often making the, you know three different companies weíre going to send the RSP to decisions. Or theyíre the one whoís the strong recommender or the strong enthusiast behind this buying decision. They then get the white paper and often will then shoot it up one. And white paper has a strong capability of going slightly viral so they may, theyíll shoot it up-line to their boss. Theyíll shoot it up-line to their colleagues. Theyíll send it to everybody also on the committee, and send it around.
The other thing is that weíve definitely noticed that people go looking for white papers on third party sites. So it is worth syndicating your white paper on these other places where theyíre searching for general information when they make their decision. I think itís a fascinating thing to look into.
Now, the offers in third party newsletters I think is fascinating in that it works so well when youíre targeting small business. I think part of that may be because sometimes youíre CP and your cost of running an ad in an email newsletter maybe lower than other types of marketing. It may also be that letís face it, small business owners usually are way too busy to sit there trolling around, you know oh you know, gee I wonder which accounting system I should use. Theyíre too busy running their florist store or their chain retailer or whatever it is that theyíre running. So, you definitely have a difference there. I think that this is probably why weíre seeing such a sell out rate in some of the technology newsletters that are out there. Iím hearing of business-to-business email newsletters that are published you know, to carry ads, actually selling out advertising six to nine months ahead of time. Iím hearing about trade association email newsletters selling out all their offerings up to a year ahead of time. Iím hearing about these crazy sellouts. So if youíre considering email newsletter ads, you need to get in there pretty early these days. Any other comments you have on this slide, Stefan?
Stefan Tornquist: I think youíve covered it pretty well.
Anne Holland: Why donít we move on to the next chart? And this of course is suddenly more interesting because itís the new stuff. How effective are the new marketing, online marketing channels for B-2-B marketing? Now these are things that are just really, mainly, have just emerged significantly in B-2-B in the past two years. Some of them have been around for a while. But weíve only seen marketers paying significant attention to them for the short term. Now they include optimization of press releases for Google, Yahoo, and MSN News. In other words, thatís tweaking your press release so that it shows up on those news services with hot links.
Co-registration for list building, now that means email list building and we have plenty of articles on co-registration and how itís done and how it works on our website. So if you donít know what that is definitely go look it up, it is fabulous. And even very low budget marketers can use it because you can do it as a, barter. Obviously podcasting, viral marketing online, Iíve seen a lot of viral marketing online coming to B-2-B in the past twelve months. Corporate blogs as opposed to blogs from individuals, rich media advertising, of course rich media advertising is anything with audio or video thatís the way weíre defining it. So if itís got a flash or got a movie, or itís got sounds coming out of it thatís rich medium.
Contextual advertising that would be Google AdSense instead of AdWord, or other contextual ads. These are ads that show-up on content sites often that are just related to the content thatís on the page. Often theyíre text only. Virtual trade shows which weíve done a few case studies on, thatís one where you go online. Itís like a webinar only longer. Behavioral ad targeting, that of course is where youíre placing an advertisement on a website, not based on the content of the website but based on the content that the person was just looking at. So if somebody was looking at a bunch of reviews for personal computers and then they go off to a new page on the website and theyíre looking at personal finance, a computer ad may still pop up based on their past behavior, and last but not least advertising on blogs.
Okay, Stefan can you talk us through what the high points of this research are, what were the big surprises for you?
Stefan Tornquist: Sure, first let me say because these are emerging tactics in large part, we donít have the huge data set that we have in regards to say search and email. By definition for them, theyíre emerging. Theyíre not being used by huge numbers of marketers. So, that said we still have plenty of folks to generate some very interesting data. The strength of co-registration was actually a surprise to me. I know that this is an area that youíve been a key voice on but in business-to-business, we donít see so many companies doing the co-registration. I think about in the research we did into co-registration about 15% of those responding to the survey identified themselves as business-to-business marketers. So that was something of a surprise. But of those folks that are using the tactic, theyíre finding it quite successful. Contesting this was really a surprise. Now again, this is one where usage makes a big difference here, only about 9% of the folks out there have either created contests or sponsored them. But the responses were extremely high. Now podcasting fits very well, in my opinion with the long sales cycle of many business-to-business technology purchases. But still it was a surprise.
Anne Holland: Now I have a question about that. You said only 9% of the marketers and Iím assuming business technology marketers out there are using podcasting right now as a tactic. Of those, the 9%, I see a lot of variation between the size of the organization they themselves came from. It seems like very big companies were doing the very different kind of podcasting than the little teeny companies.
Stefan Tornquist: Well thatís right. I mean big companies have, are more likely to be sponsoring someone elseís and outsource the creation and delivery of the podcast, whereas smaller companies of course are doing it in-house. The smaller companies tend to simply use their own, their own channels for distribution, larger companies are paying to get that, get the word out.
Anne Holland: Okay. I think in a way if youíve got a really cool voice and again itís the kind of person who might speak at a trade show or itís just the kind of person who would normally write a personal blog about your technology, I mean just loves talking about technology. Itís somebody maybe on your staff who has some really great articles for your email newsletter or its very vociferous on your, on the topic of white papers. Often organizations have that kind of content enthusiast. Theyíre extremely passionate about the technology that you do.
Stefan Tornquist: Thatís exactly right.
Anne Holland: The right person for your podcast.
Stefan Tornquist: Yeah --
Anne Holland: But the passion theyíre going to hear that in the voice. And I think itís gonna change a prospectsí minds about how much you care about the market, youíre not just marketing organization trying to sell something and itís not just the sales rep trying to sell something. Itís like somebody who really gives a darn.
Stefan Tornquist: Thatís absolutely right. I think the same standard for successful blog should be applied to pod cast meaning that those organizations that keep their hands off of the blogs and keep their hands off of the podcasts are likely to be the ones who see the highest upside. You know thereís always a little bit of risk you know in not vetting the, those communications. But I think from what Iím hearing the benefits far outweigh the risks there. Those folks that listen to podcast, folks that read the blogs of other professionals they can smell a marketing rap in a heartbeat --
Anne Holland: Or someone whoís a little too pompous.
Stefan Tornquist: Yeah, right. And I mean it really is all about that voice. And so youíre right if thereís someone in the organization that you love to listen to give a presentation, you know think about canning it and creating a podcast.
Anne Holland: Thatís great. You can even take part of your webinar and knocking these, anyway. One thing that I think is interesting is of course the viral marketing online. Weíre seeing a 26% very effective. That actually surprised me as being a little high. I have been interviewed recently by every reporter on this planet. Somehow, we got picked up as the source to talk to about viral marketing. Well we do a lot of studies of it. And they were all asking me what works in viral marketing in B-2-B, and I am extremely concerned because when I do talk to business-to-business marketers who have been conducting viral marketing campaigns and believe me, I ask. Iím like okay give me the data. What happened? I mean even if itís off the record, tell me what happened. I need to know. I need to learn whatís effective.
And so often they havenít measured anything beyond you know how many times their little video was viewed. You know how many people came to the micro-site? How many you know, how cool it was that it got forwarded a lot? You know what, zillions of views and zillions of people coming to your micro-site or playing your little game or whatever is not necessarily remotely effective marketing. Weíve been sending viral marketing since 2002, and have discovered that campaigns that were outrageously successful in terms of the number of people who saw them, they ďwent viralĒ sometimes ended up with this tiny, I mean low, single digit response rate in terms of the people who were actually decent prospects. Who were people who would ever be an influencer or a buyer, you know instead of appealing to that, you know sys-admin that you hoped to appeal to you may have a lot Czechoslovakian teenagers looking at your ad.
So there is less control with viral advertising. It was to be extremely pointed and I really hope that that 26% who said it was very effective are not just saying it was effective because they got a bunch of traffic. I hope theyíre saying itís effective because not only did they track, and hopefully generating some leads from that traffic but then they rank those leads and they rated them and they said this is how qualified this lead is and they tracked those suckers all the way down through the sales cycle. Because thatís what, you have to do. I just, if I never hear another story pitched to me about somebody saying weíve got millions of people to our site. Iím like, I donít care, tell me about qualified prospects.
Stefan Tornquist: Well and I have a question for you since youíre out there talking to these folks all the time. It seems to me that the definition of viral marketing in the B-2-B world is a lot more, vague, and perhaps broader than the definition you or I would use.
Anne Holland: Yes, probably so.
Stefan Tornquist: And I think that may contribute to a higher than expected ranking because you know, say a contest that gets emailed around --
Anne Holland: That might be viral.
Stefan Tornquist: That might be viral but it almost might not because it doesnít have the, you know sort of multimedia aspect or surprise aspect to it.
Anne Holland: What makes, sure, what makes something viral is if it is, usually itís a piece of content. It could be an offer but usually itís a piece of content that could be emailed, could be a game, could be almost anything, online form, who knows. But itís something that people are so interested in that they canít help but give it, tell some other people about it. They canít help but tell five friends. They canít help but post it on their blog. They canít help but stick it in their email message. They canít but round around the office going hey, hi have you seen this thing. Thatís what it is. Itís that knee-jerk, oh my God isnít this unusual. Itís very funny, or itís very scary. Or itís very startling, oh my God this news, you know. Or itís something that is you now an offer thatís insane. I mean itís just something that theyíre like, oh, oh I must send this on. That is very different from classic what they call word-of-mouth which is much more evangelism. Thatís I really like this technology and I think that other people on my committee need to learn about this technology. So Iím going to tell them. Or this is a darn good piece of white paper. I need to forward this to my boss so that we can perhaps buy this thing. Thatís more of an evangelist thing. Itís not, oh my crazy viral and you know crazy viral really is crazy viral. And those are very, very different campaigns.
Evangelism tends to be much more qualified. It tends to be much more on the quality of the content and it tends to be much more related to what youíre hoping theyíre going to do. Theyíre evangelizing your product, using your content. Viral often has nothing to do with you at all. It just was, oh isnít this a hysterical video, wow. And theyíre laughing. And they donít even know what brand sponsored it. So thatís truly the difference. By the way if you go to our home page and you scroll down under the third column, itís called ďmore resources.Ē You can see thereís a hot link to our viral ad marketing hall of fame. And you can see all this yearís winners. And its open access and youíll be able to see the campaigns about that.
In the meantime, why donít we move on to the next slide? Because I think people want to hear the rest of this presentation, and of course, Iím on page nine, Search Engine Optimization. Stefan how did we get this data?
Stefan Tornquist: Well this was part of an observational study that we did looking at both large and small to medium sized, specifically software vendors. Now this chart looks at the big guys, 60 of the names that we all know. And so as you would expect they did pretty well. I guess I give them a B+ perhaps on this. Or no, itís 72% were on the first page so I guess that would really be a C- wouldnít it? The top three natural results are 44% of those companies represented. The more evidence we see, the more important it is to rank very highly in the natural algorithmic searches itís called. Not quite, itís the pressure isnít quite as extreme as it is on the page size, where being in the top page position makes a huge amount of difference. In business-to-business people do tend to look a little bit further down the page in those natural results. So we see that the, between the two, 72% make it onto that first page.
Anne Holland: But thatís pretty pitiful when you consider these are huge, giant, multi, multi-million software companies.
Stefan Tornquist: Thatís right, now --
Anne Holland: Can absolutely afford it. Better ________ than ________.
Stefan Tornquist: Thatís absolutely true. Now the way we did this study was to, for each company we studied we looked at what they considered to be their primary business area and searched on that, so thatís where you know certainly all of these companies show up in the top three if you search for some things, their name --
Anne Holland: Their company name --
Stefan Tornquist: Brand names of products, etc. but this is in their key business areas. And of course many have a number of different business areas and theyíre going to rank differently in those. And yes, even so 28% donít make it onto that first page. And even in business-to-business if youíre not on the first page, youíre really losing the vast majority of eyeballs.
Anne Holland: Yeah, thatís pretty pitiful.
Stefan Tornquist: And what we donít see here is the data for the smaller companies and as you might imagine they donít get quite as well represented in those algorithmic listings. The other point I wanted to make here is that thereís quite a bit of research presenting some in our upcoming search guide. Thereís quite a bit of research thatís going to be available shortly for folks about the combined impact of having paid and natural listings on the same page. What difference does it make to have a top page and top algorithmic result? The data seems to indicate that there is a strong correlation and higher click through rate on both as a result of having both of those working in tandem.
Anne Holland: Fabulous. So if youíve got one, donít abandon the other. Why donít we move to page ten? Now this is one that I think everybody wants to know, which lead generation offers on your website are the ones that are the most effective for generating qualified leads. So if youíre going to adjust your website, in particular adjust the standard lead generation offers that are on every page of the site that should be on every page of the site. What should you really put your effort into? A lot of us maybe donít have the marketing stamina to keep fresh offers for every type of lead gen offer there is out there all the time. So what are you going to put your stamina into?
And here Stefan you did break out whatís most effective by different types of marketers. You have services marketers at the top, the software and ASP marketers are the dark bar in the middle and then the hardware marketers are the bar right below. But I think whatís fascinating of course is in some obviously thereís a huge difference. I mean you would expect software marketers to have free trial demos because you know theyíre the kings of free trial demo. So that would make perfect sense. But I think whatís interesting though is for blogs suddenly youíre seeing a really different array, itís in the mid-30ís for services in software. But hardware makers theyíre not doing well as blogs. Are people who buy hardware not reading the blogs?
Stefan Tornquist: You know, I think that this may be a result of hardware makers tend to be some of the larger, more traditional companies. And this is purely theory but I wonder if itís the way theyíre doing their blogging that may be affecting how effective it is. Because at least theoretically blogging would be one of those tools like podcasting, white papers, etc. that would really support the long hardware sales cycle and yet, you donít see it doing as well. I think you know thatís a case where if you have the right people blogging, if you have truly technical people blogging about these very technical subjects, and doing it --
Anne Holland: In a genuine manner --
Stefan Tornquist: In a genuine manner, I would expect to see that number be higher to be honest with you, and you know, with podcast itís sort of the same thing. And by the way, if youíre thinking like hey a few turrets ago we saw a much higher rating for podcast. This only looks at those folks who said something was very effective and of course these are for just three of the industries that we were looking at and which are, for which we have a great deal of data.
Anne Holland: And thereís always low-ticket sweepstakes such as t-shirts, PDAs and iPods you may get a heck of a lot of responses from them but theyíre probably not all that qualified.
Stefan Tornquist: Right.
Anne Holland: And just so as to clarify, I know a lot of people have questions about this. We asked marketers, only the marketers who actually used one of these tactics could reply whether it was effective or not.
Stefan Tornquist: Exactly.
Anne Holland: Youíre not seeing people who have never tried it saying whether it was effective. It was only those folks who had already tried it and seen some results. It is nice to see white papers and webinars still up there getting fairly good marks as effective. I mean in some ways you would think white papers is boy Iím bored to death with them. But itís just, itís a classic tactic and they really do consistently work.
Stefan Tornquist: Absolutely, I mean in both of those cases I think you would see even stronger marks if we were back you know a couple of years. Thereís just a great many more white papers and webinars available than there were, as we all know.
Anne Holland: Okay. And letís move on to the next page. This is page eleven. And here we see the data and this is year-over-year and it is, I wouldnít say scary but itís certainly not heartening. The sales cycles are continuing to lengthen and lengthen. That makes the marketing departmentís job a lot harder because if youíre out there spending all your money, you know generating leads, generating leads, generating leads, youíve got a year or more now where whatís going on with the nurturing? And my biggest concern I think when I ask the marketers, Iím like great you generated the leads, whatís next? You know really all I hear about from a significant number of marketers, even from bigger companies often is, oh, well we do an email newsletter. Well, you know thatís good. Thatís great. Iím all in favor of the email newsletter, probably because publish eight of them.
So hey, but what else are you doing? First of all youíve got some of those prospects who just are not email people, you know, hereís different types of people. Some people are phone people. Some people are trade show people. Some people are magazine people. Some people are email people. So youíve got to have something, you have to be out there in multiple media as a nurturer just to appeal to all your prospects. In addition, of course problems with email ________, you canít always count on email getting through. Iím not saying when it gets through its effective. However if you canít count on it getting through you better have a backup. You better have other messaging going to people because you donít want to leave them sitting there, you know after having spent all that money on generating that lead and leave them just kind of hanging out.
Now Stefan in general, you had mentioned that the sales cycle lengthening was slightly different depending on what marketplace people were in?
Stefan Tornquist: It does vary somewhat. This is an overall average. The one point I really wanted to make on this slide is that for the past couple of years weíve taken a look at that group thatís represented by 12+ months. So those folks that have seen their sales cycles slide into more than a year, and we canít prove a causal relationship but we have noticed that those folks have a lower tendency to use tactics beyond the very standard email newsletter. They tend to have lower frequencies of their email newsletters which in part is, probably a reflection of that long cycle but you also wonder, you know how many people are falling, falling through the gaps for this group. We tend to see slightly lower uses of you know different kinds of email testing, etc. So I canít prove a chicken and an egg relationship here but for those out there who might see their sales cycle slipping in longer than a year, it might be time to look at what marketing tactics youíre using or not using.
Anne Holland: Okay. Now here we go to the next page, this is page twelve. This is, weíre back again on data from our CNET study of these 633 business technology buyers. If you told us all about, what affected them in terms of your marketing? And of course, one of the questions we asked them was, what do you do with that email when youíre just bored of hearing from this vendor? Youíre not interested in that newsletter anymore. You are not interested in that sales alert anymore. What happens? What are you doing? Now we have a significant amount of data from other studies indicating that a tiny number of people actually ever click on that unsubscribe list. So, Iíve got to tell you Stefan the 44% who say I go through their unsubscribe process, I am so doubting that.
Stefan Tornquist: Well you know, itís one of those cases where you do wonder if the reality matches what people are reporting. Now admittedly in the -
Anne Holland: Never, ever met a marketer who said they had a high unsubscribe rate.
Stefan Tornquist: No, of course --
Anne Holland: Iíve never met a marketer who had a high unsubscribe rate.
Stefan Tornquist: Nobody has a high unsubscribe rate. Now it is true that we do see people going through the unsubscribe process to a greater degree for business-to-business sites. You know they have a reliance that their unsubscribes will actually go through. But I, like you suspect that some of that 44% and the pitting belief or the spam are doing nothing. And thatís to me the most interesting part of this slide is that it sort of begins to quantify that percentage of folks who just allow those emails to come in, check out the subject line, maybe scan in a preview pane and donít really go through any sort of process and relationship. So thereís still an opportunity there but how to take advantage of it. Now I know youíve been talking about the preview pane and thatís just becoming more and more important.
Anne Holland: Yeah, I mean I think when you say I still scan quickly looking for something useful. I mean when is the last time, if you use in particular Outlook, and soon Yahoo and Hotmail, their search engines and the way they do things, but when you use those and youíre looking at an email but youíre not enormously interested, and youíre skipping through a heavy in-box pretty quickly. Usually youíre just looking at some preview. Youíre not opening, you know, youíre not clicking and you know looking at each thing, and really carefully opening it and saying hey, Iím going to Spin Weekly now. No, you know youíre going to see it in preview. Weíve got data showing more than 60% of business users, I think itís more like, 69% use that preview pane. So thatís a huge number of people who are using that preview pane. And you can betcha that your email if theyíre not totally involved and engrossed and loving you know the stuff theyíre getting from you, thatís what theyíre doing with your email if they open it at all. Theyíre opening it in preview.
And the answer to the big question everybody always asks this question, you know can my email program determine which people open it in preview as opposed to which people click and open the email all the way? No. There is absolutely no way on this planet to determine that, anybody tells you so, have them call me because I would love to hear about it. Iíve never, ever heard of a way and believe me Iíve talked to a lot of techies about this. So, you donít know whether theyíre reading the preview panel except to study the ad thatís showing but 69% of them are. So therefore when theyíre skimming through your newsletter or your white paper offer or whatever theyíre doing so in this teeny little box.
I mean I always tell people think about, you know, think about how worried we are with our website design. You know youíre trying to keep everything above the fold. Well think about what this means for the email fold, because the email-fold thatís much tinier, than a mean website. Thatís an email fold, thatís dinky. I mean, what is that maybe four inches across, maybe its two inches down, you know the little boxes are not that big. So theyíre looking at a tiny little, usually the upper left hand corner of your email that you sent. And thinking of this decision, and remember theyíre not interested anyway. Theyíre just trying to get through their in-box. So you better have something pretty darn exciting in that upper left corner. And when I say exciting, I mean something that is truly of interest to them, truly interesting content, not the iPod offer. But something that really is fascinating for these folks to take a look at in there.
Now why donít we go on, how do you know what is truly exciting? Because you know, whatís truly exciting to you and me as marketers is never whatís truly exciting to the prospects practically. Well on page thirteen, youíll see more and more business marketers and I am thrilled to death to see this number. More and more business marketers are using personas to determine what is truly exciting to their email recipients, to their website surfers, to their direct mail recipients to their prospects to their customers. Now Stefan, can you briefly describe what a persona is?
Stefan Tornquist: Absolutely. But before you get too excited let me point out that this slide looks at the usage of personas by large companies. This is not across the board. Smaller and medium sized companies use the concept of personas much less. Although ironically itís a, itís not an expensive process. And can be very useful. So a persona is, itís a theoretical buyer. It is someone that youíve defined from their name, their, how many kids they have to the kind of executive they are, what part of the country theyíre in. And what that lets you do is really start thinking about your marketing, your website design, every element of your marketing and sales process through the eyes of the customer. What weíve done for this guide is to create a series of personas, one of our research team members comes out of the agency world where personas are very often used, and so we asked her to go through all of the information that MarketingSherpaís got doing all these case studies and interviews. And to use those to build I believe there are 13 profiles and personas, in the guide looking at you know how is it that, you know a CEO of a small company views their media somewhat differently than a large company CEO, that sort of thing.
It can be a great exercise not only for the end result but for I think the process itself. Marketing teams that go through the process of creating personas tend to have a real vested interest in how they develop them, and it can be a great team building exercise and you know thereís nothing like, the analogy would be usability study where thereís nothing more educational than having someone sit down in front of your website whoís never used it before. And watching them move through it and realizing how very differently people view that content than you thought they would or than you do. And so using personas is a way of betting that objectivity in-house which is, can be invaluable.
Anne Holland: And also helps you of course with certain end marketing because youíre figuring out what are the kinds of warnings these people use to describe either the business problem that your technology solves or what committee theyíre on that is looking for this technology. For example if youíre an email service provider, do they see ESD, email broadcast firm, or do they say list house, do they say email list vendor, do they say blast provider? I mean all the different words, different kinds of people might use just for that one technology and itís probably not the word youíre using yourself, that may not be the word youíre advertising under.
Stefan Tornquist: Thatís absolutely true. Your key words are a great place to help build those personas, because that is the voice of the customer.
Anne Holland: The other thing you may want to build personas around are different types of prospects such as a very price conscious prospect versus a prospect who is extremely worried about customer service versus a prospect you know whoís main concern is gee, you know theyíre already working with your competitor and theyíre disenchanted and are you really going to be better or not because now theyíre very, you know are all vendors part of the same brush, type of deal. Unless anyoneís bought sermon services, it would be five years and they all became very worried about whether it really was something that was going to work for them or not. How do you prove that yes our industry has evolved and weíre incredible now, you should trust us again. There are all different worries and concerns that people bring to either your home page or the landing page theyíre coming to, and you canít address them with one average sort of lure the leader in, or you know general answer. You have to say hereís, you know the ROI information for the price conscious person. Here is the why weíre trusted and our little award we just won, you know the reader review award for the disenchanted, trust-worried person. You have all these different things for these different people.
Now of course turn to the next page and youíll see a couple of personas. And these are not one-page personas. Personas usually go on for about two pages. Theyíre not huge and gargantuan but my experience theyíre usually two or three pages long. But often, yes you do have a picture of a real person that you put in there. It may not actually be one of your customers. Youíre kind of making up a faux person. So itís a, you donít want to use a real person, you want to use a fake person but you can go to places like ďI Stock Photo.comĒ and you know pick a picture that you, everyone can visualize, yeah itís that person. Actually, it really helps with the visualization as youíre copyrighting. Think about writing your copy, just to that gal or that guy, and I canít tell you how great a tool this is for creativity. It helps you change your voice.
We actually included 13 different sample personas and industry profiles in the guide to get you started. So take a look at them. Weíre not saying these are the ones that are going to fit you, but theyíre definitely one to get you started, get you thinking well how would, read it through and then say, and then look at your website or look at your white paper and say how is this person, what would they think of this? Would they be interested? Would they not be interested? Would they be like oh, my gosh, you know would it alarm them? So use this as your major creative tool and your search engine-marketing tool and you can, tool for how to title your white papers because different personas will care about different words. Itís just an amazing marketing tool.
Of course I think Iím a little too in love with them, but I really do find them so, useful as a writer, and as someone who is a creative person approaching the marketing process. And it is a someone scientific one because you really are basing everything on what the prospect cares about on their pain points. And not on just the glory of your service, and here are our product features. So it helps you turn the marketing around and make it so much more powerful. And to that end, Iíd like to say thank you for having come to our teleseminar, our annual teleseminar today. And if I was going to summarize what we talked about today I would say itís the big three. It is you need to have fabulous content, content that may be built around personas or for personas, content thatís written by someone who is truly passionate in your organization about your technology, about what it can do. Theyíre probably not in the sales department. They may not be in the marketing department and they may not be in the management team. Itís often someone in the tech team. You have to find that person though. It could be all different job titles. There may be several of them.
You also need to focus on evangelizing. You need to focus on getting your own customers to be wonderful word-of-mouth people, whether itís forwarding your email, whether itís forwarding your firewall campaign, whether itís just telling their friends yes I trust this company. I know the others canít be trusted but this is the trustworthy one. And we all know how important that is in certain categories.
Next, you also need to focus on multiple touch points. As weíve seen here, search is wonderful but it is by no means the only influencer. And it is by no means the only influencer you should use. Youíve got to be out there at trade shows. Youíve got to be in email newsletters. Youíre got to be in search. Youíre got to be in magazines. Youíre got to get the PR going. It is to me, I think joy and excitement of being a business and business marketer. You know unlike mass consumer marketers who often find themselves slotted into these little niche jobs, I am in charge of you know the radio campaign to Hispanics in Miami. You know business marketers are doing all media often and theyíre doing campaigns of every possible type. I mean you may be doing direct mail. You may be doing a podcast. You may suddenly be going off for the trade show. Itís a very exciting career to be in. Iím just thrilled to death by it. And Iím thrilled to have come from business-to-business.
Anyway, if you have specific questions about todayís presentation please feel free to contact us at firstname.lastname@example.org. Yes, that is a real person who mans that email address. It is not a junior box that nobody looks at. And we are in there constantly and Stefan and his research team will answer any specific questions, no problem. If they canít find the answer, they will also let you know that. So they will get back to you. And if youíd just like to see the complete table of contents for all the charts, and the personas, and all the information in the larger business technology marketing benchmark guide, take a look, thereís a hot link there on the very last page of our presentation. We have a complete table of charts, 151 charts, and tables. On that page you can see that the answers to the questions you need answered, take a look and I urge you to take advantage of it. Thank you very much for your time today. Good afternoon.
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