The Shift from Print to Web

Tessa Wegert, a writer and consultant specializing in Internet technology, and a regular contributor to the Technology and Business sections of The Globe & Mail. www.tessawegert.com

B2B Marketers Blaze the Online Trail
by Tessa Wegert

As recently as a decade ago, spending on print advertising was as much a part of marketing campaigns as colder temperatures are a fact of winter. Lured by their glossy façade and ability to reach niche audiences, marketers -- particularly those in the business-to-business realm -- relied almost entirely on print catalogs and trade publications to promote their products and services.

Slowly, however, the marketing landscape began to change. Instead of boasting increased print ad sales for the quarter, marketing magazines featured headlines that read, "Print spending slips yet again." Instead of investing in costly print catalogs, marketers were exploring new alternatives. Responsible for this shift in promotional spending was the same medium that had also begun to attract TV and radio advertising dollars: the Internet.

Way back in 1999, Catalog Age Magazine published a study on Web spending by companies who regularly send out catalogs. Even though at the time the Web accounted for only a small portion of their catalog sales, 30 percent of the participants in the study were found to be spending more than $50,000 annually to maintain their Web presence.

By 2001, their impetus for this seemingly unjustified budget allocation was made clear. The Fall 2001 Catalog Industry Trend Report from DoubleClick's Abacus division found that fewer online consumers were making catalog purchases in lieu of spending on the Web. Catalog sales for the 12-month period ending June 2001 dropped 5.7 percent from the previous 12-month period, and the average catalog order size was also on the decline.

"The data allows us to conclude for the first time that the decline in catalog sales is most likely due to a shift to the online order channel, along with a combination of fewer mailings and more cautious spending," said Brian Rainey, president of Abacus. "The data reveals a high cross-over between online and catalog and demonstrates that catalogers require an effective strategy to acquire, retain and market to online customers."

Business-to-business spending on advertising has taken a similar course. In 2000, a study by JupiterMedia and Media Metrix concluded that B2B online ad spending was increasing faster than the industry average and was expected to reach $3 billion by 2005. While data for 2005 has yet to be released, a recent study on B2B trade marketing tactics by Forrester Research shows that B2B online marketing is now the third most popular form of B2B promotion, behind in-person events and direct mail, with almost 50 percent of B2B marketers having used online marketing in 2004/2005. Newspapers and custom publications appeared fourth and fifth on the list, garnering nearly 47 and 46 percent respectively, while general business magazines came in ninth with just over 41 percent.

What is it about online marketing and advertising that has driven so many B2B marketers to forgo traditional channels? It's those same benefits that were initially believed to give the Web its edge over offline mediums -- and then some.

Internet media, for example, continues to be superior to mediums like print where measurability is concerned. Print media and catalogue readership can be difficult to gauge, with circulation numbers being made somewhat nebulous by "pass-along" readership, which is nearly impossible to track. Online, however, even rich media ads that incorporate video can be tracked and measured to determine whether Internet users watch them to completion, what percentage click through to a site, and how they proceed from there.

Of course, Internet media has also proven itself to be cost-effective. Because marketers can track consumer interaction with online ads, they can more easily determine their return on investment (ROI) and optimize for improved response rates. The greater a marketer's knowledge of the effectiveness of a campaign, the greater the opportunity for cost-efficiency and overall success.

That more companies are relying on the Internet for their business needs -- whether that involves seeking out partners on the Web or researching potential new products and services -- is also a factor in the popularity of online advertising among B2B marketers. According to a recent study by GartnerG2 and Insight Express, 53 percent of all business executives start their business day by going online. Fifty-eight percent of business executives and 56 percent of all C-level executives, meanwhile, consider the Internet to be the most important source for information on business, placing it well above newspapers, magazines, television, and industry trade publications.

Increasingly, Internet users expect to see B2B marketers promoting their businesses with online ads. They look to the Web to find out more about B2B products and services, and even spend more time interacting with the related advertising they encounter.

In December of 2005, a new study from rich media company Eyeblaster found that Internet users actually spend more time interacting with expandable banners launched by B2B companies than those that derive from any other consumer-oriented businesses. Sports, entertainment, gaming, apparel, even automotive-themed ads simply didn't engage users the way that B2B ads did.

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