Nov. 14, 2006

Lisa Phillips, eMarketer senior analyst says "B2B (business-to-business) marketing has undergone significant changes in the last few years. Overall spending on B2B advertising and marketing has regained the momentum lost five to six years ago, and the Internet is causing major shifts in advertising strategies among businesses of all sizes."

Although various trade magazines and B2B publications will maintain a leading share of advertising for the foreseeable future, online spending in the B2B category will hit $2.4 billion in 2007, up 23.7 percent, according to Veronis Stevenson.

Growth rates will increase by double-digit percentages through 2010, while spending on older media, particularly magazines, will decrease.

"Some B2B people have been behind the curve on digital spending, but everyone realizes that their future success really depends on adopting integrated marketing online strategies," said Tom Kemp at Veronis Stevenson.

"The Internet is now an integral part of doing business for US companies, large and small," says Ms. Phillips. "Virtually all, 98 percent of the 220 manufacturers surveyed by SVM e-Business Solutions have a Web site, and 87 percent have had one for over three years.

More than half consider their website to be their most powerful marketing tool." While B2B online advertising only grew 5 percent last year, local newspapers and consumer magazines saw declines in B2B spending.

Network TV spending increased by 4.8 percent, to $1.49 billion and cable TV networks saw a healthy 15.9 percent growth rate, to $1.12 billion.

So what online ad formats are the dollars shifting to? "Results for the first half of 2006, released by the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers show that search advertising still makes up about 40 percent of all online ad revenues.

At the same time, classified and referrals / lead generation each posted share gains of two percentage points, to 20 percent and 8 percent, respectively, when compared to the first half of last year," says Ms. Phillips.

"The gains are impressive, considering that online ad revenues grew 37 percent, to $7.9 billion, for the first six months of 2006.

For example, revenues from lead generation actually increased over 82 percent, to $633 million from $347 million last year. By contrast, display ads, which include rich media, banner ads, sponsorships and slotting fees, lost three percentage points in share of the total, but spending still increased 28.6 percent, to $2.5 billion."

Measured by online ad impressions, the business category is definitely putting more money online. Between March and April of this year, B2B online ad impressions rose over 6.8 percent, to 7.5 billion, according to Nielsen//NetRatings.

"The Direct Marketing Association says "in less than two years from now, online marketing efforts in the B2B segment will be the dominant medium for new initiatives."

Source: eMarketer