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Mar. 28, 2007 at 8:40am Eastern by Patricia Hursh

Studies: B-to-B Search Is Poised For Continued Growth

A close look at recent market studies sheds some light on what's happening in the world of business-to-business marketing, and provides several interesting insights regarding search marketing. It appears that business marketers' perceptions are changing and as a result—budgets are starting to shift.

Slower Adoption Rates

As part of Forrester's Marketing Effectiveness Survey, conducted in the second quarter of 2006, the research firm asked B-to-B marketers about the tactics they currently deploy. Not surprisingly, the top practices reported include all the usual suspects... trade shows (used by 91 percent of those surveyed), public relations (deployed by 89 percent), and print advertising (77 percent).

More telling, however, was that search marketing only reported in at 59 percent of the B-to-B marketers surveyed.

The fact that business marketers have been slower to adopt search marketing than their consumer-oriented counterparts is also reflected in Marketing Sherpa's 2007 Search Marketing Benchmark Guide. It compares B-to-C and B-to-B online marketing budgets and found that while consumer-focused marketers devote between 35 and 60% of their online budget to paid search, in contrast, business marketers only devote 20 to 45% of their online funds to search ads.

It appears that, today, search marketing plays a relatively small role in the overall B-to-B marketing picture, but the research also reveals that things are starting to change...

Shifting Budgets

When Forrester asked business marketers about their plans to either increase or decrease spending, the two channels with the largest reported increase were "emerging online tactics" and search marketing. In fact, a full 61 percent of respondents said their organization planned to increase its investment in search engine marketing.

Where are the funds coming from? The study provides a clue. More than 20 percent say they are decreasing spending in all three of these traditional marketing channels: print ads, trade shows and direct mail.

Another source of data supporting this shift is the Search Engine Marketing Professional Organization's 2006 State of Search Engine Marketing Report. SEMPO's research indicates that 20 percent of advertisers surveyed are shifting money from print ads to search, and 16 percent are moving direct mail dollars to search marketing.

Changing Perceptions

In many ways business marketers are simply catching up with their consumer-oriented counterparts and shifting funds from traditional channels to online. Why? Like all marketers, B-to-B professionals are being challenged to improve accountability for marketing results and demonstrate ROI.

Although the majority of B-to-B businesses don't actually sell products and services online, there is a growing appreciation that search marketing (combined with an effective online experience) is a critically important way to find prospects, encourage education and interaction, engage buyers, and proactively move them through decision making stages. Search plays a critical role in the buying process—even for companies with prolonged sales cycles and high consideration products and services.

I believe that more and more business marketers are embracing search because they can no longer ignore that fact that decision makers and, yes, their target buyers, are spending a significant amount of time online, using search engines on a daily basis.

A Marketing Sherpa/Enquiro study conducted a few years ago asked business Internet users where they go to find out more about a product or service. Search engines were the #1 destination, followed by manufacturer websites, portals and review sites. Business users reported using search engines very early in their research process, as well as for product and service comparisons, and finally to select and find a provider or partner.

B-to-B marketers are looking for cost-effective, measurable ways to support brands, launch new products and services, find prospects, generate inquiries and support the sales effort with qualified leads. Search marketing, executed properly, can play a significant role in achieving all of these goals. (More details in my next column on how search marketing specifically addresses B-to-B marketers' top challenges).

Just the Beginning

In its report Forrester recommends that business marketers significantly increase efforts and investment in interactive marketing, enabling businesses to interact with prospects directly, and engage customers throughout the entire buying process.

Furthermore, the research firm identifies search marketing as a potential "killer app" for B-to-B customer acquisition efforts. Those of us who have been working on business-oriented search marketing programs for years couldn't agree more. We have the data and case studies to prove that for many companies search marketing is the most cost-effective method of lead generation and customer acquisition they deploy.

I believe that we are at the beginning of a major and long-lasting growth trend. Early adopters move over: B-to-B search marketing is going mainstream!

Patricia Hursh is president and founder of SmartSearch Marketing, a Boulder, Colorado-based search engine marketing agency. You can reach Patricia at patricia@smartsearchmarketing.com. The Strictly Business column appears Wednesdays at Search Engine Land.

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