"The Value of Advertising with Online B2B Publications"

By Jim Spanfeller, President and CEO, Forbes.com

A Special Contributor to BusinessMedia

I recently predicted that historians will look back at this moment in time as the inflection point on the curve of media history. This is the result of two converging trends: the ascendance of the Web as a communication medium, especially as a vehicle for reaching affluent business decision makers, and the increasing pressure for advertisers, and hence media, for accountability. It also underscores the value of advertising with online business-to-business publications.

The Ascendance of the Web as a Consumer Medium

According to eMarketer, household penetration for the Web will shortly reach 68%, surpassing cable TV's 67% and outdistancing newspapers at 55%. While TV/radio and magazines still exceed the Web with household penetrations of 98% and 84% respectively, the Web is still a growth medium while the others are either static or in decline.

For example, the percent of the population reading a daily newspaper has been in steady decline for the past 30 years, but the decline has accelerated with the rise of the Web. The data would suggest that the Web is most disruptive to high frequency media like daily newspapers and TV.

When looking at select market segments (such as affluent business professionals) in MRI (the magazine syndicated study), the data reveals that usage of the Web approaches the 100% penetration level that is found in traditional broadcast media.

A recent survey conducted by Forbes.com and GartnerG2 on the media habits of C-level executives showed that more top executives are going to the Web first thing in the morning to start their business day than are reading a daily newspaper. And more of these business leaders tell us that they now consider the Web as their most important source of information on business over any other media. This trend will only continue.

Research from Professor Jeffery Coles at UCLA shows that the more experience people have with the Web, the more time they spend on the Web. Moreover, the more time people spend on the Web, the less time they spend with other media. Advertising follows eyeballs and more eyes are on the Web than ever before.

Increasing Pressure for Accountability

As Bob Liodice, President and CEO of the Association of National Advertisers recently told attendees of the TV Bureau of Advertising Conference: "Chief marketing officers are under enormous pressure to demonstrate returns on investment. CEOs are holding marketers accountable for the effective management of billions of dollars in marketing expenditures. There is little tolerance for soft measures, excuses and explanations."

Certainly the Web's ability to measure and verify advertising results perfectly positions the medium to meet this challenge. The recent surge in search-related advertising is evidence of the focus on direct response. However, online advertising's unique capability to create an immediate interaction and to influence behavior long-term through brand oriented advertising, has brought a strong influx of advertisers with traditional branding objectives.

The combination of having solid research such as cross-media case studies from the Interactive Advertising Bureau (IAB) and credible media planning tools such as those from Atlas DMT and others will, further drive increases in online advertising. For example, the Korean-based giant - Samsung - is on a mission to overtake Sony as the preeminent worldwide consumer electronics brand. To accomplish this, they obviously need to produce high-quality, innovative products. But they also need to increase their brand value in comparison to Sony.

A critical component of their strategy, especially in the U.S., is the Web. Samsung is advertising on more than 100 different Web sites - including Forbes.com - with a significant year-long, premium positioning strategy. This is purely a branding initiative. You can't click on their ads and buy anything directly from Samsung, as they only sell through other retail channels. Did it work? Interbrand's ranking of the world's leading brands shows that Samsung has made significant improvements in the critical measurement of consumer brand favorability.

Another example highlights Circuit City. They have seized the Web as a critical component of their sales funnel - driving people from ads on the Web to purchase. And they have implemented the back-end measurement systems to track the success of the program with both direct sales and "view through" response. These are people who have been exposed to the ads online, but who visit their site and purchase an item at a later date. The result? Circuit City increased its online budget for the recent all-important Holiday buying season and saw a positive and measurable sales lift.

Finally, aerospace and defense industry giant, Northrop Grumman, used Forbes.com to reach opinion leaders and investors in key geographic markets, such as New York and Washington, D.C. Their focus is solely "corporate reputation" oriented advertising. You can't click on a Northrop ad and buy a high-energy, laser defense missile system - at least not yet!

Northrop measured the impact of the ad campaign using research from independent research firm Dynamic Logic. The results showed that their advertising had a significant, positive impact on building awareness and favorable attitudes toward the company. Northrop now has more actionable data from this campaign than they've ever had from any previous advertising effort in offline media. From B2B advertisers like HP, Intel and IBM to upscale consumer advertisers such as American Airlines, BMW, and even Cartier, more and more are using online advertising to drive their measurable brand awareness.

The dual trends of changes in media consumption and the increased requirement for advertising accountability will result in a boon for online advertising and a highly-efficient medium for B2B marketers.