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Ellis Booker

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Title: Ellis Booker


1
  • Ellis Booker
  • Editor

ebooker_at_crain.com312 649 5457 www.btobonline.com

2
Agenda
  • Trends in b-to-b marketing
  • Real recovery?
  • Recent surveys
  • Business media
  • Internet
  • Predictions for 2004
  • QA

3
Real recovery?
4
Question
  • Whats your prediction for the U.S. economy
    during the next 6 months?

Double-dip recession?
Zero growth?
Modest growth?
Higher-than-predicted growth?
5
BtoBonline.com poll (9-9-02)
6
Expectations
University of Michigan/eePulse Inc. Leadership
Pulse study of 920 worldwide business leaders
7
Is it wise to cut?
During the 1974/1975 recession
Companies that did not cut advertising had the
highest growth in sales and net income during the
two study years, as well as the following two
years.
Those that cut advertising had the lowest sales
and net income during the same period.
Source American Business Media
8
Assessing the effects
  • Should Firms Increase Advertising Expenditures
    during Recessions (--Marketing Science
    Institute)
  • 2,662 firms
  • Studied 1972-2000
  • Divided into consumer-product, industrial
    product, service firms
  • Looked at annual accounting stock data
  • Regression model

9
Assessing the effects, conclusions
  • Consistent with earlier research
  • Advertising contributes to financial performance
    for up to three years
  • Spending during recession produces bigger
    benefits
  • But
  • Consequences of spending decreases during
    recessions did not have much impact
  • Best advice maintain budgets if possible

10
Where companies cut during a downturn
  • Push for price cuts from suppliers 48
  • Reduce marketing/advertising 44
  • Reduce sales and earnings targets 41
  • Lay off employees 39
  • Exit some businesses 31
  • Reduce RD spending 30
  • Close facilities
    24

Source Winning in Turbulence, Bain Co., 2001
11
Budgets on the rise?
  • North Kingston, R.I.--Sales and marketing budgets
    are expected to increase in 2004, according to a
    survey conducted by "Sales Lead Report," a
    newsletter published by Mac McIntosh Inc.
    Nearly 58 of the executives polled said their
    sales budgets would increase somewhat or
    significantly next year. Only 11.5 of executives
    said their sales budgets would decrease somewhat
    or significantly in 2004.Nearly 54 said their
    marketing budgets would increase somewhat or
    significantly in 2004, and only 7.7 said their
    marketing budgets would decrease somewhat or
    significantly. The report was based on
    responses from 3,900 subscribers of the
    electronic version of "Sales Lead Report."

12
Advertising employment
  • Down 1.4 in Dec. 03
  • Total employment dropped 2.4 in 2003 to 430,600
  • A third consecutive annual loss.
  • BtoBs own survey confirms the trend
  • What are the staffing plans for your marketing
    department in 2004?
  • Increase 30.2
  • No change 64
  • Decrease 5.8

13
BtoBs Spending Plans Priorities survey
14
BtoBs Spending Plans Priorities survey
15
BtoBs Spending Plans Priorities survey
16
BtoBs Spending Plans Priorities survey
17
BtoBs Spending Plans Priorities survey
18
Business media (print)
19
Getting better
  • 2001
  • Magazine spending fell 17.7
  • Events fell 3.2
  • Net decline of 12.7
  • 2002
  • Magazine spending fell 13.3 (to 11.2 billion)
  • Events fell 1.2 (to 8 billion)
  • Net decline of 8.7

20
Projection
  • 2004 Advertising growth of 4.1 in general
    roughly 3 for b-to-b
  • Compound annual growth rate of 4.8 for
    2002-2007, reaching 24.2 billion in 2007
  • Veronis Suhler Communications Industry Forecast
    Report

21
Publisher challenges
  • Titles closing survivors jettisoning assets to
    pay down debt
  • Many struggling to pay for substantial Web
    investments
  • Lots of excess banner inventory tumbling CPM
    rates
  • Publisher predicament
  • Advertisers demand new pricing structures
  • Advertisers demand new, better ROI measures
  • Advertisers interest in online must be revived

22
Impact on publishers/editors
  • No more mega launches.
  • A dot-com focus is old-think.
  • The big story today is how large, established
    organizations are taking what Internet
    start-ups learned to increase their efficiency
    and profits. --Jim Daly, former editor, Business
    2.0
  • Emphasis on reporting metrics.
  • Emphasis on integrated products.

23
More impact
  • Moving from broad to targeted.
  • ...its taken a permanent piece of the IT media
    market from the broad media guys.
    --TechTarget CEO Greg Strakosch
  • Packaging and programming to dominate.
  • Editors who lead by readership surveys and
    demographic research.

24
Macro changes in publishing
  • Integrating print/online/event assets
  • New online ad formats
  • Targeted publishing vehicles
  • Providing much more measurement
  • Making guarantees

25
BtoBs Media Business
Launch June, 2003 Monthly September,
2003 Sections Features (2), News, Ad Sales,
Online, MA, Events, Circulation, People,
Benchmarks Audience Business publishing
decision-makers Extras E-newsletter, PDF
26
Watchwords
  • Integration, integration
  • Targeted
  • Measurement ROI

27
But holes in measurement, integration
  • Nearly three quarters of marketing executives in
    the U.S. and U.K. believe their company can't
    effectively measure campaign ROI.
  • Sixty-five percent also struggle to integrate and
    share customer data across their
    organizationdata they need to understand what
    their customers think and want.

28
More holes
  • Only 28 of business marketers measure program
    effectiveness by measuring most of their
    communications tactics and of that, only 37
    track sales as a measure of success when
    determining the ROI of a marketing program.
  • Tactical metrics to justify marketing budgets
    68 Web logs, email response logs 54 Survey
    research 51 Lead-tracking databases46
    Response codes versioned for specific ads, web
    promotions, direct response vehicles 44
    Internal anecdote gathering among sales force
    26 CRM or third-party analytics package 25
    Magazine sponsored readership studies 6 Other
  • Mobium Creative Group survey, Sept. 10, 2003

29
Internet
30
Digital Marketing Dialog survey
  • Sponsored by BtoB, CMO Council, USA Today
  • High points
  • Nearly two thirds of marketers now view digital
    marketing having a high or very high level of
    strategic importance
  • Nearly 40 plan to spend more than 20 of
    marketing budget on digital efforts

31
Digital Marketing Dialog survey
  • Perceived advantages of digital
  • Low cost of implementation 64.7
  • Speed of delivery customer response 58
  • Measurable ROI 58.1
  • Top purposes
  • New customer lead generation 84.5
  • Brand awareness recognition 70.7

32
Digital Marketing Dialog survey
  • Obstacles
  • Spam legislation/privacy
  • Analytics
  • Deliverability
  • Integration with other marketing assets

33
BtoBs NetMarketing 100
  • An annual ranking of the best b-to-b sites
  • Judged on navigation, design, content, technology
    extras, e-commerce features
  • Shades of difference among the top 20
  • Poor execution still out there
  • Old content, no search, hidden contact info
  • Trend toward tools

34
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38
GE Plastics
  • Site has a tool that allows outside engineers to
    design virtual prototypes
  • Click to connect button
  • A new engineer for one of the Big 3 automakers
    was using the site
  • A GE salesperson determined, based on this users
    activity, some sourcing needs.
  • Based on this, GE sold 500,000 lbs. Of materials

39
GE Plastics
  • The site provides a click to connect button to
    access GE Engineers either by text chat or phone.
  • Engineers are on hand 25 hours a day, 6 days a
    week.
  • Answer questions in 9 languages.
  • Site contributes more than half of GE Plastics
    total revenues

40
Lessons from Amex, GE, others
  • The most effective Web sites drive branding and
    transactional activity together
  • Few marketers have the skills or capital to meet
    this challenge
  • Continually evaluate the content application
    needs of your audience
  • Revisit how customers prefer to be reached, how
    they consume information and marketing messages
    and how their habits for both are evolving.

41
E-mail
  • E-mail marketing to reach 15 of all online
    advertising dollars by 2004, up from 3 2002
  • E-mail sent for customer retention had an average
    click-through rate of 10, with a conversion rate
    of 5
  • E-mails sent for customer acquisition had an
    average click-through rate of 7, with a
    conversion of 2.5

42
Spam crisis
  • Deliverability of messages is a huge problem
    facing e-mail marketers.
  • 71 of respondents said spam filters were
    erroneously blocking their messages, and 59 said
    they have experienced decreased click-through
    rates as a result.
  • Only 39 of marketers that use a hosted Web
    technology service for e-mail delivery use
    click-through rates to further target recipients
    after an initial mailing, and only 41 use open
    rates to further target recipients.
  • "The State of E-mail Marketing Perfecting the
    Appropriate Mix of Art and Science," Jupiter

43
More spam
  • 11 of consumers have switched e-mail service
    providers in the last 6 months another 14 are
    considering switching in the next 6 months
  • CAN-SPAM compliance
  • Should you consider alternative mechanisms?

44
Basic anti-spam
  • Scew up the unsubscribe
  • Fail to answer the e-mail
  • Sell a name
  • Trick people into giving permission
  • Rent a spam list
  • Mail too often
  • Spam your own customers
  • Ignore the angry people
  • Bore your readers
  • Break the law
  • Loose control over your lists

45
Search marketing
  • 25 total Web advertising
  • Rapid growth
  • 43 increase in 04 to 2 billion and more than
    7 billion within four years.
  • 76 of marcom execs use it today 64 plan
    increased spending
  • Trends
  • Local search, portals
  • Contextual search products

46
Communities, online off
  • Event trends
  • Why Webinars havent supplanted luncheons
  • Will big shows return?
  • Webinars
  • Newsgroups and discussion groups
  • These hubs are filled with influencers

47
2004 predictions
  • On-going noise-to-signal problem (Spam)
  • Search
  • Online video
  • Analytics
  • SMB
  • Tech marketing rebound
  • In Nov., IDC said it expected IT spending to grow
    4.9 in 2004. Now it believes the market will
    growth by 6-8.

48

QA
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