Vertical reality

Jan 01, 2007 10:30 PM  By

Business-to-business merchants have always had a reputation for being slow to embrace new marketing techniques. Their attitude toward the not-so-new channel of online search is a case in point.

There is solid evidence that b-to-b marketers who allocate significant resources to both search engine optimization and keyword buys can get far ahead of their competitors. The reason: Their customers are researching purchases for their companies online, and their competitors generally aren’t there to greet them yet.

More than 70% of b-to-b search marketers had search-marketing budgets of less than $50,000 in 2005, according to a study published during the summer by New York-based JupiterResearch. Moreover, 31% said they planned to spend the same amount on search in 2006 as they had in 2005.

Also, b-to-b pitches represent just 3% of search-related ads served overall, according to Dale Hursh, CEO of Boulder, CO-based search marketing agency SmartSearch Marketing. In one blatant example of b-to-b search-engine neglect, it has been estimated that only 15% of marketers in manufacturing run paid-search campaigns, Hursh says.

The b-to-b merchants, as far as search goes, “are kind of late adopters,” says Hursh. But it appears that their prospective customers are not. Just less than half of business executives who responded to a survey by Harris Interactive this summer said a b-to-b Website had led them to recommend a product to their organization, and 35% said they made business purchases online.

“The consumer behavior is there, but the advertising behavior isn’t there to match it,” says Hursh. Bottom line: While business buyers increasingly use search to begin researching products and services, b-to-b marketers are apparently still focused on more-traditional channels. The folks at SmartSearch Marketing contend that b-to-b marketers need to wake up to the “opportunity gap” the market presents and shift more marketing funds online.

The key to effective search engine marketing (SEM) for b-to-b merchants is understanding how to use search in conjunction with the rest of the marketing mix, says Hursh. It’s also important to understand that many b-to-b sales cycles that begin online will convert offline, he adds. Though long sales cycles are nothing new in b-to-b, most business merchants are still working to figure out how the Internet fits into the mix.

“We’re generating activity online, then the closure of the sale occurs offline,” Hursh says. “What we call an online-to-offline conversion is kind of a new phenomenon [in b-to-b].”

One highly promising area for b-to-b marketers is vertical search, or search engines devoted to specific industries or categories. The idea behind vertical search is that specialized search engines can eliminate a lot of the irrelevant search results that naturally come from business queries on the major consumer search engines such as Yahoo! and Google.

Arguably the best-known vertical engine is Business.com, which provides resources to small and midsize businesses. Like Google, Yahoo!, and MSN, Business.com offers b-to-b marketers a pay-per-click advertising program in which marketers bid on the keywords likely to be used in searches for their products or services. The top bidders appear in the results pages, and the marketers then pay the bid price for every person who clicks on their links.

Keyword prices tend to be higher in vertical search marketing, says Jake Winetraub, founder/CEO of Business.com, but the leads tend to be more qualified. “For example, ‘800-number’ on a general search engine is going to be somebody looking up an 800-number to call,” says Winetraub. “On Business.com, ‘800-number’ is going to be a small business looking for lines for their company. That customer is worth $6 or $7 a click on Business.com. The price on Google or Yahoo! may be a lot less, but it’s because you’re getting a lot of people to your site who are never going to buy from you.”

Santa Monica, CA-based Business.com currently has about 6,000 advertisers, says Winetraub; 70% of its audience is made up of executives from companies of fewer than 100 people. As a result, Business.com’s advertisers are generally those who sell products that every business needs, such as office supplies, computer equipment, and Web hosting.

Other b-to-b vertical search properties include BitPipe.com, GlobalSpec.com, IndustryBrains.com, and IT.com.

Be the customer

Currently there are few b-to-b vertical search engines, according to JupiterResearch. To find out what kind of online resources exist in a specific category, Patricia Hursh, president/founder of SmartSearch Marketing, recommends searching the way a customer would. “Start doing some searches online, pretending you are your audience,” she says. “Find out where the information is that’s related to your business.”

Also, the Hurshes stress that even if a vertical search engine is available for your industry, it is never wise to eliminate Google, MSN, or Yahoo! from your SEM strategy. “They just constitute way too large of a proportion of all searches,” says Dale Hursh.

Effective b-to-b search marketing, vertical or not, requires quick and efficient handling of leads from the channel. “The reason search is so powerful vs. other forms of advertising is that the user is telling you what their intent is,” says Business.com’s Winetraub. “If somebody’s coming off a query, that’s a highly motivated person, and they need to be dealt with,” he says. “You need to figure out how to funnel them into your sales system so that you can capture that sale.”

Simply being responsive can make all the difference in closing or losing a sale, Winetraub continues. Too often it takes a business weeks to respond to search leads. “If the lead form goes into their system and sits there for weeks, by the time they get to that person, he may be out of the market because he bought from someone else,” Winetraub says.

Although speedy response to online leads is crucial, the Internet does not shorten the overall b-to-b sales process. “The people who are searching are motivated, but it still takes a while for someone to get the approvals and do the vetting and all the other stuff they need to do,” says Winetraub. “If it takes six months to develop a client offline, it’s not going to take 24 hours to do it online.”

A crucial element of b-to-b lead handling is determining what type of prospect your company’s offering is likely to generate via search queries, says Winetraub. “There are different types of buyers,” he explains. “There are buyers who are eager to get this thing checked off their list, and if the nature of the product allows them to do so, they’re going to want to get it done right now.”

The nature of many b-to-b marketers’ offerings, however, doesn’t allow for an immediate sale online. “There are a lot of products that are too complicated [for a fast online sale], or the person just wants to talk to someone,” Winetraub says. “So they may come to a site and read all about, say, the safety signs that you have, but maybe they need to customize the signs in a way to put their property name on it. Often they’re going to want to pick up the phone or e-mail someone at the company.” And some products will never be able to yield an online transaction, he says, “because they’re just too complicated and need an explanation.”

Get on tracking

The companies that are best at converting leads generated via search and tracking their ROI also typically get a higher quantity of leads and better-quality leads from the medium, says Winetraub. What a marketer pays for a click on search engines such as Business.com and Google determines how high it appears in the results. The more a business is willing to pay, the more volume it will get, explains Winetraub. “If you are not doing a good job converting the leads, they’re not going to generate a good ROI, so you’re not going to be able to pay a lot, and you’re not going to get much volume.”

As a result, you should track leads that comes through search by keyword and engine, just as you track the response of rented names by the source of each list. “That way you can track their value and figure out what you can afford to pay,” Winetraub says.

But it’s not enough to track how leads from search queries convert online. You should also track offline conversions by which search engines drove the initial inquiry, says Winetraub. You can do this by providing a different landing page and telephone number for people who find you via, say, Google, than for people who come from Business.com — something that relatively few b-to-b marketers do.

Winetraub says it’s not unusual to see a b-to-b SEM effort generate six phone calls for every lead form filled out online. “If they were just measuring ROI based on the click, it would look good enough to keep buying, but if they could take into account those six phone calls they were getting, they could bid more and get more volume,” he adds. “Conversion tracking is really important. You wouldn’t mail a mailing list without knowing what sales came from that list.”