B2B Companies: Do They Believe the Hype?

Parsing the eMarketer Report on B2B Social Media

Earlier this month, eMarketer released a report titled “B2B Social Media Marketing Heats Up.” eMarketer bills itself as “a business service unlike any other.” It is different from other well-known business intelligence companies, such as Forrester Research, in that it conducts no primary research itself; instead, it aggregates and analyzes all the available research, surveys, and data on a given topic.

I took a careful look at this report and have some thoughts about the following key points, as well as additional observations that might be helpful for B2B marketers thinking about social media.
· Spending on B2B social media is expected to increase significantly
· There are still barriers to adoption for many B2B companies
· Lead generation remains keenly important and is being achieved by many via social media
· Measurement and ROI are also key for B2B companies
· The differences between how B2B and B2C companies approach social media illustrate the differences between audiences and the respective marketers’ needs

B2B Social Media Spending to Increase (or as the kids say, “Duh”)
One obvious conclusion reached by the report is that spending is on the rise for B2B social media marketing (their term, not mine). They lead with a Forrester prediction: B2B firms will spend $54 million on social media marketing in 2014, up from just $11 million in 2009. The $ figures seem small to me, although the report does specify that internal costs such as staffing and training are not included. Since most of the social media channels are currently free or cheap (which may not be the case forever), it stands to reason that increased person-power will comprise the bulk of expanded social media efforts and thus would not be represented in these numbers. Still, given the consistent trend of exponentially increased online budgets from year-to-year, these amounts seem very cautious to me especially over a five year period.

One trend worth noting: the flight of budget from other media to social, especially that of online display advertising.

Nielsen reported that in 2009 B2B display advertising overall declined 8%. My assumption is that this was due to a couple of factors: the failure of many B2B trade media titles and associated Web sites, and an increased understanding by B2B marketers that display ads don’t work, especially when compared to tactics like SEM and email.

However, spending for paid advertising on social media (mostly Facebook ads) increased by 184% (probably reflecting the small $ from 2008 as much as the increased interest in social media).

Barriers to Adoption
The key question B2B companies have about social media is the same question they have about any marketing approach: can it help with their business objectives?
· The number one concern for B2B companies, in survey after survey over the years, is lead generation. If social media can generate leads, then it will be embraced.
· The other main concern is ROI; if the value of social media can be measured and documented, and proved to be acceptable, then they are more likely to use it.

At this point in the evolution of social media, I begin to worry about oversaturation. Users of social media can easily find themselves bombarded with input, and many are simply unable or unwilling to read everything or engage with brands as they had in the past.

Despite this concern, it is worth noting that a significant percentage of B2B companies are NOT using social media and represent a worthwhile business opportunity for communications agencies. 37% said they did not know enough about social media or how to begin, according to an Equation Research study in August 2009.

It’s About the Leads, Stupid
Some important numbers discussed in the report:
· DemandGen June 2009: 14% of companies surveyed were getting more than 10% of their leads from social media (218 companies surveyed); 28% were getting more than 5%
· 35% of respondents expected their number of leads generated via social media to rise by 1% to 5% over the next year.
· Hubspot reported in January of 2010 that the following percentage of B2B companies using the indicated channel have acquired a customer from that channel:
· Company blog 43%
· Facebook 33%
· Twitter 38%
· LinkedIn 45%

These figures are both encouraging AND somewhat daunting. Clearly, social media channels are effective at generating B2B customers as well as qualified leads; however, more than half of the companies surveyed in these various polls have not had success using them. Sobering reality, reminding us not to jump at the hype but rather consider the facts and realize there is risk in every venture.

Measurement of B2B Social Media
As my colleague Don Bartholomew puts it, there is a difference between value and ROI. Sometimes you can clearly demonstrate value without necessarily being able to calculate ROI, which is a financial metric.

Still, being an internet-based engagement process, there is an assumption that social media should be able to be measured and tracked the way that Web site traffic or email opens/click-throughs can be tracked. Lack of clear metrics is a major reason some B2B marketers choose not to engage with social media: 37%, according to Equation Research ("2009 Marketing Industry Trends Report, "August 18, 2009).

It seems clear that more marketers are expecting and demanding a clearer measurement of the value of social media engagement. A lot of people who have built their careers on the fuzzy values of “engagement” or “community” have pushed back that social media cannot fit into the dull box of ROI because its inherent value is much higher than simple metrics.

I am not sure B2B companies will accept that. They are clearly leading the charge over their consumer-oriented brethren when it comes to identifying success metrics and tracking results. Business.com’s report of November 2009 identified the percentage of companies (engaged in social media marketing) using the following criteria for success:
· Website traffic: 68%
· Brand awareness: 61%
· Engagement with prospects: 60%
· Engagement with customers: 52%
· Brand reputation: 47%
· Prospect lead quality: 40%
· Revenue: 38%
· Prospect lead volume: 37%
· Useful product feedback: 26%

To Don’s point, most of these indicate value, but to calculate ROI is complicated. Attributing success to any of a variety of factors can be difficult, so even a clear financial metric like revenue is not easy to connect directly to social media. At FH, we conduct a significant period of discovery and definition to fully understand what factors contribute to a business’s success, and we carefully choose the trackable events that form a basis for suggesting ROI or value attribution to the social media programs we develop for our clients.

Differences between B2B and B2C
The report identifies two key differences between the business audience and the consumer audience:
· Multiple influencers/deciders
· Longer buying cycle = more need/opportunity for interaction

The consumer is usually the sole decider and often susceptible to the spur-of-the-moment purchase. The business decision, in contract, is almost always subject to group input and careful financial scrutiny. The purchasing process is often hard-coded to enforce consideration of multiple providers in pursuit of the best choice and lowest cost. With a buying cycle in multiple stages, the B2B customer will benefit from consistent and appropriate input, which social media can facilitate.

Business.com noted some important differences between B2B and B2C in their survey (September 2009) of social media initiatives.
· B2B companies are much more likely to maintain corporate blogs (74% of respondents vice 55% consumer)
· Business marketers were also more likely to upload content (i.e. white papers, videos) to third-party sites (50% vice 32% consumer); vertical sites like GlobalSpec certainly promote and encourage sharing content via their platforms
· Not surprisingly, Facebook and MySpace were more popular with consumer companies, while more B2B companies were using LinkedIn and Twitter

One more note on Twitter: an October 2009 survey from Chief Marketer, Direct, and Promo found that B2B marketers were more likely than B2C marketers to use Twitter to announce new Website content. On the other hand, B2C marketers tended more to tweet about special offers and locate brand fans.

Ed Linde II, senior marketing manager for Web marketing at IBM.com, seems to be an excellent provider of illustrative sound-bites because he is quoted several times in the report. On this topic, he points out: “In B2C you’re looking for a lot of interaction and collaboration between the individuals who tend to be a youthful audience, and from time to time there’s a celebrity element. In the B2B space, you want subject matter experts who are known authorities on particular topics. They’re credible experts on a particular area that people are trying to learn more about and make educated decisions on.”

I think his latter point underscores what has always been a key difference between B2B and B2C, and why social media is such a good fit for the former: the need for technical credibility. Expertise in B2B is valued in a different way than popularity in B2C, and the technical audience has always sought guidance and instruction on how to apply a given technology to its own needs and application. Social media facilitates that in a more direct and immediate way than any other interaction besides face-to-face meetings, or as we now call it F2F.

Conclusion: Heating Up, but No Slam Dunk
Pardon my mixed metaphors, but it’s important to realize that few B2B companies are willing to jump onto the social media bandwagon simply because of the hype. The ones that have adopted these strategies and tactics are doing so because they see the value, not simply because it is “hot.”

eMarketer concludes the report with a set of conclusions that seem achingly obvious but are nonetheless worth making:
· B2B marketers need a social media strategy
· Social media can and does generate leads
· It is very important to monitor and measure your B2B social media efforts

B2B social media is certainly riding the buzz wave, and most companies are aware of the various channels and interested in learning more, but they approach all marketing efforts with a critical eye and will not gamble their hard-earned and only now slightly-rebounding budgets on strategy or tactics that they don’t understand or can’t properly value. It’s up to us as communications and marketing professionals to explain the value and demonstrate the worth of social media for B2B companies.

We’ll give the final word to Ed Linde from IBM who pretty much sums up the bottom line:

“…at the end of the day, the marketer’s job is to facilitate collaborations between the customer and the seller. If we can use social media technologies to help do that, we will.”
—Ed Linde II, senior marketing manager for Web marketing, IBM.com

The People in the Room

Crowdsourcing at the Highest Level

I recently made a career change, joining Fleishman Hillard in their Chicago office as a Digital Strategist, primarily working on B2B accounts. As chance would have it, the company-wide FH Digital group was holding a Digital Leadership conference in Washington DC shortly after my last day with ARENDS, wherein they assembled as many of their best and brightest Digerati for a meeting of the minds. Through sheer dint of fortuitous timing, with a little on-the-fly schedule adjustment, I was able to attend this conference on my very first day on the job.

It was literally a global event, with attendees from Milan, London, Toronto, and Hong Kong as well as a number of other US cities and the large digital hubs in Washington DC and St. Louis. I found it simultaneously exhilarating and bewildering to be thrust deep into this community without much preamble or preparation. On the one hand, it was a tremendously valuable exposure to this deep and multifaceted network. An office like Chicago can tap into many resources across the world, with specialist skills available for any tactical or strategic need. Case study after case study was presented demonstrating the breadth of capabilities we can offer clients. It was great to meet these team members, and to be able to have a face with which to attach a name as we interact in the future.

On the other hand, there was a good deal of discussion relating to policies, processes, and procedures to which I was unable to add much (given my relative unfamiliarity with the agency). Even this was instructional, of course, exposing me to nuanced discussion of how things really work in an agency this large. It was especially illuminating to see so many brilliant minds, literally at the peak of their profession, bending to the topics at hand.

In fact, the leadership of FH Digital were quite open about tapping this talent mass to help solve (or at least inform) the challenges facing the practice. There were many exercises specifically designed to elicit quality input on business problems, such as how to market ourselves and how to describe the value we represent to our clients. These are things that traditionally come down from management on high; in this case, we were helping build them from the ground up.

Which struck me as being both obvious and inspired. The concept of crowdsourcing is pretty well-established at this point in the interactive space. Wikipedia is the most obvious example, but others abound. The entire Open Source software movement, for example, is based around the idea of presenting a concept to a talented and capable group, and having them dive into it and bang it around so that changes will be found to improve and expand on the original idea. Similarly, some web sites have sprung up that facilitate the outsourcing of graphics projects. Members of these networks review online requirements for a particular need, such as a logo or an illustration, with a posted budget. If the members choose to participate, they submit designs that they develop on spec with the hopes of winning the project. They are then paid the posted price for their work. Most people agree this process is less effective for complex creative projects, but it is a good way of leveraging the web to expand on the traditional creative process of submitting three options for the client to choose one.

However, I am not sure how many companies utilize the strength of their own people in a similar way to approach the challenges of business operation. Collaboration is encouraged and supported in many, of course, or at least in theory. Large manufacturing technology companies will use intranets to facilitate sharing of ideas and information between design engineers, for example, and the growth of blogs and wikis as tools for feedback and data-gathering is certainly part of this. But these are all based around support for the effort of the individual member to address his or her individual problem; for a company to use the collective abilities of its own people to work on corporate challenges is a little more unique and maybe even visionary.

It’s not hard to hypothesize why corporate leadership might not leap to the concept of using its own workforce to advise on strategic or even tactical challenges. Leaders are supposed to lead, after all. In any industry, the managers are charged with the planning and vision to direct the company in all areas. The worker bees, no matter how sophisticated their abilities or extensive their training or how broad their experience, are the ones who have to actually do the work. It is difficult to imagine that management of any company would willingly cede their authority and control to labor.

But it makes enormous sense to realize that the ones “in the trenches” have a depth of practical knowledge that can be keenly valuable in planning and strategy. And if one has the capability of mining information from each of thousands of persons who do a particular professional task every day, and do it very well, then the sheer aggregate of data will likely produce insight that can point to solutions. Statistically the crazy or poorly considered ideas will be minimized and can be ignored, but any broadly-suggested concept represents the collective wisdom and would merit support. A smart researcher can devise poll questions or other methods that will produce optimal results; technology is available that can make it very easy, and very rewarding, for subjects to participate.

While the FH Digital gathering was limited to the people in the room, and the data collection was not rigorous in methodology (admittedly, according to the FH Digital Research Group which was well-represented), it still revealed the value of approaching an executional work force (in this case dedicated to interactive communication strategy and tactics on behalf of clients) for input on organizational challenges. The feedback received by our leadership will go a long way toward crafting worthwhile strategy effective tactics that represent real-world conditions.

A common trope is to talk about the “smartest people in the room;” if you have a situation where everybody in the room is smart, then it is a smart idea to tap into that talent, especially if the “room” can be metaphorically extended across your company. That’s crowdsourcing taken to a higher level.

Don't Believe the Hype

"Social marketing is a shiny new toy and almost everyone is wising up and getting involved, as they should...There's no question that social applications are becoming central to our online lives, and soon social apps will be a central part of the very operating systems we use...Still, at the heart of it all for marketers is the message. Never forget that these new social technologies are just new ways to communicate. And technology by itself is not persuasive. Beware not to get the media mixed up with the message...Every status update, tweet, and inbox message is nothing more than a communication between a sender and a reader. What you say and how you say it matters."

--Bryan Eisenberg, Social Media Is Not the Message

I love Bryan Eisenberg. He almost always hits the proverbial nail right on the head, and in this case his words ring truer than ever over the buzz around Social Media.

From the earliest days of technology-aided communication, the temptation of the new has always been the demon of the effective, or at least of the cost-effective. Many of us remember the client refrain from the early days of Web 1.0: "We just need a web site!" In other words, we haven't thought at all about what to put in the web site, or how it can help us, we just want one because everybody is getting one. It is the classic case of substituting the tool for the finished object, and that is what Social Media is--a tool, and only a tool, for communicating. Just having a Twitter account means nothing, you have to use the tool in the proper way and most important you have to create good and appropriate content for that tool.

Please don't get caught up in the hype. Think carefully about how you would use Social Media applications to further your business objectives, how you can properly support it, and whether your target audiences will utilize your Social Media presence in a way that furthers your goals. If not, don't bother. Use the money and time you might otherwise put into it for channels and initiatives that will help you achieve your success metrics.