how b2b marketers can benefit from a new performance marketing strategy

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NETWORKS TW Performance Advertising HOW BUSINESS-TO-BUSINESS MARKETERS CAN BENEFIT FROM A NEW P AY -FOR-PERFORMANCE STRATEGY

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Performance advertising is a new online marketing strategy based on an innovative pay-for-performance model. For business-to-business (B2B) and technology marketers who are focused on lead generation and demand creation, this strategy exceeds the capabilities of traditional space advertising models.

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Page 1: How B2B Marketers Can Benefit from a New Performance Marketing Strategy

NETWORKSTW

Performance Advertising

HOW BUSINESS-TO-BUSINESS MARKETERS

CAN BENEFIT FROM A NEW

PAY-FOR-PERFORMANCE STRATEGY

Page 2: How B2B Marketers Can Benefit from a New Performance Marketing Strategy

In brief

Performance advertising is a newonline marketing strategy based onan innovative pay-for-performancemodel. For business-to-business (B2B) and technology marketers who are focused on lead generationand demand creation, this strategyexceeds the capabilities of traditionalspace advertising models.

Key benefits are minimal risk,payment only upon performance,real-time results with highly qualifiedleads, and measurable response.

PERFORMANCE ADVERTISING 1

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PERFORMANCE ADVERTISING

Seeking an attractive alternative to traditional advertising

For decades, the most visible component of message delivery for most B2B and technology marketers hasbeen space advertising — first in print, and in recent years also online. Marketers pay publishers of trademagazines, technical journals, and Web sites or portals to run ads in their space.

This model still represents a successful part of the marketing mix for advertisers desiring brand building.However, space advertising has become ineffective for successful lead generation. It requires advertisers topay well in advance for results.Yet marketers receive few responses to these ads, often discover many ofthe responses they do receive to be of low quality, and find it difficult to calculate their return oninvestment (ROI).

In this era of increasingly scarce resources, many marketers — and their management teams — demandmore.They require quantitative measurements of predictable returns on their marketing investment.Theywant more and better-qualified leads.

They demand a new form of advertising that can cut their risk and ensure profits through sales growth.

Introducing performance advertising

In performance advertising, a marketer runs advertising content on a publisher’s Web site or portal underan innovative new model.

In this model, the marketer relinquishes control of ad location and frequency to the publisher. In return, the publisher agrees to forego payment in advance. Instead, the advertiser pays only after a validated lead or otheraction of value — such as a click, a download, or a registration by a prospect who meets agreed-upon qualitycriteria — is generated.

In other words, payment comes only upon proven performance.

Performance advertising changes the whole dynamic of online advertising. Instead of purchasing spacebased upon desired locations and ad frequency, then hoping for results — marketers can now just buy actual results.

This new strategy is highly measurable. Performance advertising provides marketers with insights thatsurpass traditional Web metrics such as page views and click-through rates.A performance advertisingmodel instead allows such measurements as qualified lead generation and prospect conversion rates.Thesepermit marketers to perform real-time campaign customization and more accurate calculation of ROI.

True results-based performance advertising (also called performance marketing or affiliate marketing) is new to the B2B space.Yet its revolutionary potential has been demonstrated in another, even larger, arena.

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It’s already a proven success in online consumer and retail marketing for companies such as Amazon, eBay,Staples, Marriott, and Target. In fact, it’s currently a $6 billion channel to market — with a 13% annualgrowth rate.

Performance advertising now is proving to be a natural fit for B2B and technology marketers as well.As inthe consumer realm, B2B advertisers have products and services they wish to sell on the Internet, andnew customers they wish to access. Publishers have advertising space on their online sites for which theyseek new advertisers. Performance marketing brings them together. It can forge a mutually beneficialrelationship based on this new pay-for-performance model.

Benefits and results

This new results-based strategy is already proving an effectiveway for B2B marketers to maximize the value of their onlineadvertising dollars, while eliminating hazards associated withtraditional pay-for-play advertising.

Several key benefits have become apparent:

Low or no risk. As one practitioner put it succinctly,“Withperformance advertising, marketers can stop buying eyeballs —and start buying actions.” This strategy eliminates the risk ofspending large sums to purchase impressions that may or maynot translate into prospect interest, let alone prospect action or actual customer sales.

Advertisers can be sure a performance advertising lead is aninterested prospect. Because that prospect has already expressedinterest through an action such as downloading a white paper or registering for a Webinar. If the advertiser has designed thataction properly, the action itself draws the prospect well downthe path toward becoming a paying customer.

The marketer’s budget is never at risk. If a given message doesn’t reach or resonate with an interestedaudience, and no actions result, the advertiser simply doesn’t pay for it. Instead, the marketer can devotehis or her funds to running another message or trying another publisher.

Payment only upon performance. Here is where performance advertising most directly meetsmodern marketers’ — and management’s — demands for maximum cost-effectiveness.

Publishers have become highly creative in offering advertisers performance-based products.These haveincluded Webinars or seminars with pay-per-registration agreements, videos with pay-per-viewarrangements, e-newsletter sponsorships, and e-mail blasts.

Advertisers who purchase participation in products like these agree with the publisher beforehand onwhat parameters will constitute a qualified lead.As a campaign runs and site visitors begin to take actions

Case 1: Introducing Industrial TechnologyOn a tight budget, an industrial supplierneeded a hard-hitting introduction for itslatest technology.The company’s marketerschose a 60-day performance advertisingcampaign. Online ads carried by two Webpublishers offered a free white paperexplaining how the technology could beapplied in the target market.

Results> Impressions 62,871> Click-throughs 2,084> Qualified leads 289> Cost per lead $60> Lead conversion rate 14%> Total cost $17,340

Performance advertising generated strongbrand recognition, excellent lead qualityand qualification, and numerous quotationsupon sales follow-up.

PERFORMANCE ADVERTISING 3

How Performance Advertising Performs

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PERFORMANCE ADVERTISING

that tentatively identify them as leads, their information is instantly compared against given lead parameters. Nonvalid leads are weeded out, and advertisers are not charged for them.

Advertisers pay only for proven performance and real results.That’s why proponents declare thatperformance advertising takes advertiser ROI to a whole new level.

Real-time results. Unlike print-based media, performance advertising generates leads in real time.Demand can be created for a product or service almost immediately.

Example: in less than 2 weeks, one life sciences software firm acquired almost 100 qualified leads through a single performance-based ad placed on one Web site.

Measurable response. Since performance advertising isconducted online, it’s possible to measure almost everythingabout it, as it occurs.

For instance, whether or not a given lead meets preset criteriafor validity can be determined immediately — not weeks ormonths after a media placement. In addition, the advertiserknows what ad and publisher generated the lead, and whatincentive the lead responded to.

A well-designed performance advertising measurement systemcan efficiently capture full prospect data and providecomprehensive metrics on campaign performance. It can alsoshare this data with the advertiser’s customer relationshipmanagement (CRM) database. Precise CRM data will be vital for future marketing campaigns, as well as for increasinglyvaluable lead nurturing efforts.

As one industrial advertiser said,“I was amazed that eachmorning, a number of leads were deposited with full prospectdata in my CRM database, ready for immediate follow-up.The leads were extremely high-quality and produced many quotations.”

This immediacy and wide prospect information bandwidth make it easier for advertisers to justify a given marketing expenditure.

Tracking and reporting

Ensuring that the predetermined criteria for lead qualification are met and performing subsequent campaign analyses are important components of any successful performance advertising campaign.

B2B publishers offering this strategy must employ full-fledged performance marketing infrastructures,such as TW Solutions’ LinkShadowTM system, to perform these functions.

The infrastructure monitors and logs visitor activities, tracking actions such as click-throughs andconversions. It provides Web landing pages and registration forms that interface seamlessly with the

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Case 2: Capturing Life Sciences LeadsA life sciences company decided to testperformance advertising to support its lead generation program.A 30-daycampaign run with one Web publisheroffered a free scientific paper on FDAcompliance for a specific type of laboratorytesting.The company’s marketers acceptedonly North American leads.

Results> Impressions 12,029> Click-throughs 409> Qualified leads 68> Cost per lead $60> Lead conversion rate 17%> Total cost $4,080

Performance advertising achieved a costper lead significantly lower than thecompany’s traditional advertising program.The marketers determined to mainstreamthis strategy for future lead generation.

How Performance Advertising Performs

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advertiser’s Web site. It captures full prospect data (minimally name, job title, organization, phone, and e-mail),answers to lead qualification questions, and survey responses in real time to populate lead and CRMdatabases, while also closely tracking costs — all across multiple campaigns and Web sites.

Advertisers receive comprehensive campaign performance reports.These enable them to calculate real-timemetrics from cost per lead through full campaign ROI, for continual measurement and efficient optimization.

Values and costs

In the current economic climate, advertisers are almost universally cutting budgets. So ROI, conversion rates,and cost per acquisition are more critical than ever — as is the avoidance of risk.

With performance advertising, payment for ads and links that a publisher carries on its site or portal is madeonly for performance, according to rates the advertiser negotiates with the publisher.These rates are basedon variables such as the value of the offered product or service, lead qualification parameters, site traffic, orthe circulation of a given e-newsletter.The accompanying chart shows the underlying value driving thesecosts.The higher the degree of interaction with a given message, the more valuable the action becomes tothe advertiser.

Costs for campaign startup and creative are the same as with traditional online advertising. In addition,performance advertising all but eliminates the inevitable waste accompanying traditional campaigns —campaigns that attract both qualified and unqualified eyeballs alike, and generate unwelcome percentages of off-target leads.

Performance-based payment is made only after the advertisement has performed its task of motivating aspecified action by a validated prospect responding to a specific offer or incentive. So lead streams arecertain to be of the very highest quality.

PERFORMANCE ADVERTISING 5

Higher-value interactionsbetween your site and visitorsdemand greater prices

$ CPM (page views and impressions)

$$ PPC (clicks)

$$$ PPA (actions – downloads, views, site interaction)

$$$$ PPL (lead conversions)

$$$$$ PPS (sales)

Perceivedvalue by

advertiser

Revenue potential

$ CPM (page views and impressions)

$$ PPC (clicks)

$$$ PPA (actions – downloads, views, site interaction)

$$$$ PPL (lead conversions)

$$$$$ PPS (sales)

RRevenue

pottenttiiall

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PERFORMANCE ADVERTISING

The result: for the right messages delivered to the right prospect in the right environment, performanceadvertising excels. It achieves significantly lower costs and higher values than with traditional models.

Using this scorecard, performance gaps and successes in the marketing program are revealed quickly,and the company can adjust accordingly.

Messages and incentives

Since they are paid only when results are produced, publishers tend to give more prominence and frequencyto offers and messages that they’re convinced will attract strong responses. If a particular message orcampaign doesn’t possess or can’t be given impactful creative and a strong incentive, it’s unlikely to succeedwith this model.

Thus well-crafted creative messages plus high-value offers and incentives are essential to making performanceadvertising a success. Strong attractors are required to motivate the click-throughs, actions, and registrationsthat are keys to performance-based strategies.

In B2B, knowledge-based content and offers have proven especially effective.That includes incentives such as these:

>White papers

> Case studies

> Management or application briefs

> Webinars and seminars

> Downloads of free software

> Videos and podcasts

> Online cost calculators and configurators

Summary

Performance advertising represents a powerful new tool for B2B and technology marketers. It shows provensuperiority as a lead generation channel when compared to traditional space advertising. It demonstratesadvantages such as minimal risk, pay-on-performance value, real-time results, and efficient measurement andtracking. Performance-based advertisers combine targeted messages with strong incentives to achieveunprecedented sales growth and success.

TW Networks can provide further details on performance marketing methods and results.Visitwww.twnetworks.com or call 781-793-9389 for more information on this innovative marketing strategy.

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PERFORMANCE ADVERTISING

About TW Networks

TW Networks is the leader in online business-to-business (B2B) performance advertising. It is theonly marketing firm that operates performance-based B2B networks reaching markets such asindustrial automation and processing, OEM manufacturing, medical devices, pharmaceuticals, lifesciences, utilities, oil and gas, logistics and supply chain, and electronics.The company offers acomprehensive portfolio of services that covers every step of the performance marketing process,including network and campaign development, commission structures, publisher and advertiserrecruitment, network management, and creative services, plus campaign analytics, measurement, andoptimization.

TW Networks is a division of Tiziani Whitmyre, Inc., www.tizinc.com, a Boston area-based marketingservices and strategies agency that builds brands, generates sales leads, and delivers ROI to maximizepayback on any marketing communications budget. Founded in 1991, its services include Internetmarketing (such as affiliate marketing and performance advertising, search engine optimization, andWeb site design), public relations (PR), advertising, direct marketing, graphic design, and corporatebranding strategy.

© 2009 Tiziani Whitmyre, Inc. All Rights Reserved.

2 COMMERCIAL STREETSHARON, MA 02067 U.S.A.

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