Reaching Global Executives: Megatrends In B2B Marketing

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12Reaching Global Executives:Megatrends in B2B MarketingA special marketing paper for our clients

Preface12 Megatrends in B2B marketing is an in-depth look at the challenges facingmarketing executives across the world. This special marketing paper wascompiled by the Economist Intelligence Unit’s sales and marketing team,drawing on a survey of our clients and other organisations active in B2Bmarketing. The conclusions outlined in this report are based on our annualmarketing survey as well as our own experience in offering B2B marketingsolutions. The Economist Intelligence Unit has impressive thought leadershipcapabilities and works with many clients to meet their marketing objectives.Who took the survey?A total of 136 companies responded to our survey. All were engaged inB2B activities, and generally had substantial international operations.Respondents most commonly had responsibility for operations in AsiaPacific and Western Europe, but executives with responsibility for NorthAmerica, Latin America, Eastern Europe, the Middle East and Africa wereall well represented. The respondents operated in a range of differentindustries, including technology and telecoms, consulting and legal,finance, media and healthcare. Marketing executives constituted 42% ofthe sample, followed by sales and business development executives andcommunications executives. The sample was split evenly between Economist Group clients and non-clients. The survey was conducted in 2006.Lou Celi, SVP and Publishing Director, Economist Intelligence Unit,and Jeremy Eagle, Global Director of Marketing, Economist IntelligenceUnit, conducted the survey and wrote the marketing paper.March 2007

Reaching global executives12Megatrends in B2B MarketingA special marketing paper for our clientsThe Economist Intelligence Unit conductedan annual survey of business-to-business(B2B) marketing that was designed toidentify the challenges that face marketing executives the world over. Our research drewon two main initiatives: an online survey of morethan 130 marketing executives from a wide listof B2B firms, including a cross-section of industries, geographical locations and sizes, and viewsexpressed by our clients.Our position as a leading provider of objective research, publishing and conference servicesprovides a bird’s eye view of promotional strategies, objectives and practices. Our survey deliversa number of insights across a range of sponsorshipactivities and media.Specifically, our survey reveals that sponsors andadvertisers are:l shifting dollars away from single-media promotionin favour of integrated thought-leadershipprogrammes featuring print ads, sponsoredresearch, publications and conferences;l improving return on investment (ROI)measurement techniques to track lead generationand new business;l seeking much closer collaboration with partnersto find new ways to achieve unique marketingobjectives;l going higher and deeper into organisations, targetingnot just decision-makers but also key influencers;l pursuing a broad range of target company sizes;l more closely integrating marketing strategy,messaging and medial still relying on advertisers and public relations(PR) firms—but expecting their capabilities toevolve to meet their changing needs;l placing greater emphasis on selling globally,particularly in emerging markets—and tocompanies domiciled in emerging nations;l exploring new media—with high growth from Web2.0 initiatives on the horizon;l increasingly outsourcing their research andconference activities.The following paper examines these megatrends,investigates the differences between key industrysegments, and outlines how the Economist Intelligence Unit can help executives meet their promotional objectives. The Economist Intelligence Unit 2007

Reaching global executives1MEGATREND ONEThe shift to 360º thought leadershipAsked to rate the value of various marketingactivities on a five-point scale, meetings/conferences and research/surveys top the list.Today B2B providers view a broad array ofsponsored programmes, such as conferences andwhite papers, as a valuable means of capturingattention and persuading decision makers.This is not to say that traditional advertisinghas lost its appeal. Instead, the conclusion is thatorganisations seeking to promote their businessesare increasingly relying on a range of channels,including print.Specifically, these cross-channel programmesengage, inform and motivate target markets acrossa broad range of both active (meetings, webcasts,user communities) and passive (print) promotionalchannels.The way forward is clearly a heavier reliance oncreating a programme of thought leadership thattakes advantage of multiple-entry-point messaging.1. How important are the following non-traditional categoriesof marketing activity to your organisation?(Mean score out of e papers, executive summaries, articles3.61Website advertising and sponsorship3.40Rankings, economic analysis and original content3.25Webcasts, podcasts and interactive forums3.012Source: 2006 sponsors survey (134 respondents)M E G AT R E N D T WO The ROI imperativeSponsorship and print-based promotion areknown to deliver the intangible benefits ofproduct awareness, brand recognition and theestablishment of thought leadership.While these remain critical objectives, the surveydemonstrates that marketing and advertisingprofessionals want something more from theirpromotional investments: they want tangible returns.Indeed, when asked their top overall sponsorshipobjectives, respondents cited the concrete goals The Economist Intelligence Unit 2007of generating leads, building new business andawareness of services. The study turned up manyexamples of this trend toward more measurableROI. For instance, one well-known high-technologyconsulting firm now takes a systematic approachto determining the ROI of events by measuring thenumber of leads from a sponsored meeting, thenumber of subsequent one-on-one sales calls and thesize of the business actually generated.Although sponsors are increasingly stressing

Reaching global executives2. What are your top sponsorship objectives?Build awareness of services66%Generate leads66%Build new business65%Position firm as thought leader58%Improve brand perceptiontangible benefits, qualitative objectives areimportant to firms in certain circumstances.Examples: a company seeking to improve atarnished image in the marketplace or a technologyfirm seeking to showcase an area of managerialexpertise.51%Reach high-quality audience51%Meet senior executives39%Increase press coverage36%Associate with a leading brand21%Build relations with government, influence policy19%Gain management support9%Source: 2006 sponsors survey (134 respondents)“Me too” sponsorship on the waneOur experience shows that sponsors todayaren’t looking merely to pay a fee in exchangefor brand association with a multi-sponsorconference, research report or website. As themarketing director of a professional service firmasserted, “We do not want ‘bimbo sponsorship’where we just pay money to get our name on anevent. We want a well-thought-out programme thatpresents us uniquely in the marketplace.”The trend towards more tailored programmes is borneout by the survey. For example, asked what they look forin choosing a media solution, respondents cited threekey objectives: achievement of marketing objectives;standing out from the competition; and the generationof new ideas. Of course, these goals can only be achievedthrough active collaboration between sponsors and theirmedia partners.3. How important are the following in choosing a media solution?Of particular interest, we note(Numbers are rounded to nearest tenth)that if a media relationship isAchievement of marketing objectivesable to deliver on the top-three75%8%17%Stand out from the competitioncriteria, price becomes less of53%28%13% 3% 3%an issue. In short, sponsors areNew ideas46%30%16% 7% 1%willing to pay a fair price in orderPriceto achieve their objectives and34%32%10% 42%24%Integrated media platformto differentiate themselves from33%7%13%21%27%their competition.1 Very important2343MEGATREND THREE5 Not important The Economist Intelligence Unit 2007

Reaching global executives4MEGATREND FOURGoing higher and deeper into organisationsB2B companies are pushing higher and deeperinto client organisations, and they are becomingmore expert at targeting relevant key functionsin both the senior and mid-levels of management.For example, the survey indicates that promotionalstrategies are targeting executive decision makers,4a. What level executive are you targeting in your B2B marketing?SVP/VP/Director66%Head of business unit/product head66%C-level54%Head of department47%Board member(47%), finance (42%), information technology (IT)(37%) and strategy/business development (36%).In addition, they are also targeting specific jobfunctions such as procurement (33%), supply-chainmanagement (27%), human resources (26%) andrisk management (23%). The rising emphasis onprocurement is in line with the greater role that thisfunction plays in many firms.There are some interesting industry trends. Forinstance, professional service firms differ most fromthe norm and focus mainly on the upper echelons ofmanagement in large multinational organisations.Technology firms, on the other hand, are interested ina broader set of titles.35%Country manager34%Manager4b. What job functions are you targeting?31%General management31%Marketing and salesRegional manager55%Economist/analyst9%47%Finance42%such as business unit heads and senior vicepresident/vice-president/director, in addition todepartment heads, C-level/senior executives andboard members. However, companies are also goingdown the hierarchy to country managers (34%),managers (31%) and regional managers (31%).While many managers are influencers, B2B marketershave a bias towards mid- to upper-level executives, whoare more likely to drive actual purchases.Survey respondents are also moving across abroader range of activities within organisations.For example, the top-five functional targets includegeneral management (55%), marketing and sales The Economist Intelligence Unit 2007IT37%Strategy/business 0%Supply chain management27%Human resources26%Risk management23%R&D18%Information/research16%General counsel/legal12%

Reaching global executivesOne size does not fit allIn terms of size, survey participants arepursuing a surprisingly diverse range ofcompanies. Although B2B firms tend to targetthe largest organisations, they are increasinglypursuing smaller ones.In short, the survey demonstrates that B2Bcompanies see pockets of opportunity in virtuallyevery size-based demographic.5MEGATREND FIVE5. What size company does your organisation want to reachthrough its marketing over the next year?Over 5 billion49% 1 billion to 5 billion50% 500 million to 1 billion53% 250 to 500 million46% 50 to 250 million39% 50 million or less35%Integrated marketing on the riseConsistent with the growing importanceof 360 thought leadership, sponsors areintegrating the management and budgeting oftheir worldwide promotional activities.For example, asked to what extent they managetheir promotional strategies on an integratedbasis, 59% say they do so most or all of the time.Additionally, over half, 52%, say that the ability toprovide an integrated media platform is important totheir process of selecting media partners.6MEGATREND SIX6. To what extent does your organisation manage/budgetmarketing on an integrated basis?Most of the time 37%All of the time 22%Some of the time 28%Rarely/never 12%Don’t know 1% The Economist Intelligence Unit 2007

Reaching global executives7AMEGATREND SEVENThe changing role of advertising and PRs companies move towards greater integration of a wider range of promotional activities, advertising agencies and PR firms stillexert considerable influence.For example, in terms of their role in selecting andmanaging sponsorship programmes, 13% describeadvertising agency and PR firm influence as verysignificant, and 21% as moderate. About one-thirdof companies, 34%, describe advertising agencies as“somewhat” influential.Advertising agencies and PR firms aren’t so muchdriving the trend towards integrated promotion asthey are being positioned as specialist suppliers.Advertising agencies and PR firms are moreinvolved in helping to come up with ideas andplanning out the multi-channel campaigns, and areless involved in price negotiations and the formulation of strategy. As the dynamics of B2B marketingevolve, so too must the capabilities of advertisingand PR firms.7a. How influential are advertising agencies and PR firms inselecting and managing sponsorship programs?7b. What role do advertising agencies or PR firms play foryour organisation?Somewhat 40%Development of ideasModerate 26%Media planningVery 16%Do not use 14%Don’t know 4%60%52%Influencing strategy26%Price negotiations21%NA/do not use18%Other4% The Economist Intelligence Unit 2007

Reaching global executivesThe allure of emerging marketsThe geographic demographics of today willbear little resemblance to those of the nextten years. We predict that by 2017 China willbecome the world’s largest economy when growth ismeasured on purchasing power parity. Growth ratesin emerging markets are two to three times those ofdeveloped economies.Accordingly, our clients are already thinking interms of positioning themselves for the changingworld marketplace. For example, in terms of geographic prioritisation, the survey shows that for2006, sponsoring organisations are targeting Asiaand central/eastern Europe more than the Americasand western Europe.8. In which markets will your organisation work to build itsbusiness and professional exposure over the next year?Asia-Pacific66%Central and eastern Europe54%Americas52%Western Europe46%Africa/Middle East35%A new marketing opportunity: Domcoms9. Which customer segments will you pursue?Multinational companies73%Domestic companies*58%Financial institutions47%Public sector45%The public21%High net worth individuals21%8MEGATREND EIGHT9MEGATREND NINEEstablished multinationals remain the top priorityfor our clients. Nearly three-quarters (73%) cite thiscategory as a primary target.However, there is a growing belief that the high-flyers of the next decade will arise from the ranks of today’sdomestic companies (domcoms) in emerging markets. At58%, this category achieves second position even oversuch traditionally favoured prospects as financial institutions (47%) and the public sector (45%).Institutional investors14%Foreign direct investors13%Shareholders10%Pressure groups/lobbyists7%*in emerging markets The Economist Intelligence Unit 2007

Reaching global executives10 IMEGATREND TENThe global decision matrixntegrated global marketing campaigns arecomplicated and frequently require complexdecision matrices, especially in accounting andconsulting firms. Our survey shows that decisionscan be made at different levels and often need to bejointly agreed. Many marketing directors recognisethat global decisions made at corporate headquarters without the support of local management canlead to poor results.The survey indicates a slight bias toward centralised sponsorship and promotion decisions (37%).However, the results are mixed: 25% make the decision at the local level; 13% at the regional level; and23% decide jointly.10. Who at your organisation typically makes decisions onsponsorship and advertising?Corporate management 37%Country management 25%Joint decision 23%Regional management 13%Don’t know 2%Choosing A Provider The Economist Intelligence UnitThe survey* shed light on theresearch and promotional objectives, weof helping their organisations associaterelative quality and value ofcame out at the top. For example, 46% ofwith a leading brand. Forty-three percentvarious providers of confer-participants say that we are better in termssay that we are better than the competi-ence, research, publishingand promotional services. In terms ofHow we compare in achieving the following objectivesquality and value, and meeting sponsorship/research objectives, the EconomistIntelligence Unit scores highly in the viewof survey participants.Asked how our brands and associatedBetterthan thecompetitioncapabilities compare with the competition in terms of achieving key sponsorship,*including a mix of EIU clients and non-clients10 The Economist Intelligence Unit 2007Associate with a leading brand46%Reach a high-quality audience43%Meet senior executives41%Position clients as thought leaders37%Improve brand perception33%Obtain press coverage25%

Reaching global executives11New media poised for rapid growthThe survey shows that website advertising and sponsorship, at 3.4, are becoming more important forB2B marketing. However, new Web 2.0 initiatives—webcasts, podcasts and blogs—have not yet becomecommonplace. We expect new media to continue to growin popularity, particularly as a way to build a “community”of executives with common interests.Consider also the other trends from this survey. Companies want tangible ROI; they seek integration in their messaging and wish to target specific executives. Electronicmedia can achieve all of these goals. As one marketingdirector said: “in the future, we will not consider workingwith a company that has no new media capabilities. Asexecutives increase their use of these web tools internally,we will see the rise of their use externally”.MEGATREND ELEVEN11. How important are the following categories of marketingactivity to your organisation?(Mean score out of e papers, executive summaries, articles3.61Website advertising and sponsorship3.40Rankings, economic analysis and original content3.25Webcasts, podcasts and interactive forums3.01Source: 2006 sponsors survey (134 respondents)tion in terms of reaching a high-qualityat assisting our clients in positioning theirquality and value of services of the Econo-audience. Given the strength of our brand,companies as thought-leaders.mist Intelligence Unit, and its division,37% say that we are better than the restFinally, respondents were asked to rate theEconomist Conferences. Again, our brandsand related capabilities scored favourably inHow do we compare in quality and value?Research/surveys53%Rankings/economic analysis41%White papers/executive summaries33%Meetings/conferences29%all categories.Betterthan thecompetition The Economist Intelligence Unit 2007 11

Reaching global executives12 OM E G AT R E N D T W E LV EThe growing appeal of outsourcing12. Now and in the next three years–do you outsourcethe following?utsourcing is already prominent among B2Bmarketers. The survey, however, shows thatthe next three years will see further growth inthe number of organisations choosing this approach.For example, over half of respondents (53%) saythat they currently outsource research and surveys.However, that figure rises to 63% over the next threeyears. Similarly, while 26% of respondents say thatthey currently outsource conference organisation,that figure rises to 40% over the next three years—awhopping 54% increase.Outsourcing gaining popularityResearch/surveys63%Website advertising or sponsorship49%Meetings/conferences40%Rankings or other original content40%White papers, executive summaries36%Webcasts, podcasts31%TodayIn 3 years% /other content29%40%38%Meetings/conferences26%40%54%White papers/executive summaries/articles23%36%57%ConclusionStronger focus on ROI; greater integration ofmarketing and messaging; more precise targetingof market segments; deeper penetration ofemerging markets; higher levels of outsourcing: the keyfindings of our survey demonstrate that B2B marketingis becoming increasingly sophisticated.Moreover, we expect this sophistication to furtherincrease as more companies expand their programmesto include new media tools, such as webcasts,podcasts, microsites and interactive forums.12 The Economist Intelligence Unit 2007

AppendixB2B Marketing MegatrendsAppendicesDemographicsThe preceding survey was executed in 2006 and completed by 136 companies, half of which were clients ofthe Economist Group. The demographic profiles of ourrespondents are as follows.Survey participantsEconomist Group clients 51%What is your principle business activity?Tech/IT/telecom 26%Consulting/legal 22%Non-Economist Group clients 49%Banking/finance 14%Media/PR/agency 7%Healthcare/life sciences 7%Energy/utility/chemical 2%Education 1%Government/trade body 1%Other 10%For which region(s) of the world are you personally responsible?Africa/Middle East26%Asia/Pacific46%Western Europe43%AmericasWhat is your personal area of responsibility?Marketing 42%28%Central and Eastern Europe35%Sales/businessdevelopment 29%Thought leadership/practice leader 10%Corporatecommunications/PR 7%Other 13% The Economist Intelligence Unit 2007 13

AppendixB2B Marketing MegatrrendsPartnering with the Economist Intelligence Unitto reach global executivesAt the Economist Intelligence Unit, we believe the best wayto reach executives is through thought leadership. Our multiple-media approach provides you with a highly effectiveway to engage with your target audience.360º thought leadershipCustom research and briefingsManagement surveysExecutive interviewsAdvisory boardsPublishing servicesWhite papersCustom websitesArticles and newslettersBusiness rankingsWeb 2.0Content-rich advertisingWebsite sponsorshipWebcastsMicrositesExecutive programmesCorporate network by regionFunctional executive groupsExecutive meetingsExecutive forumsBusiness roundtablesGovernment roundtablesOur custom approach to thought leadership is uniquein the business advisory market. We can draw on a rangeof media to position your organisation at the forefront ofdebate on critical management, industry or regional issue.We value our partnerships with clients and offercomplete sponsorship and advertising programmes thatare flexible, high-profile and effective. And our researchorientation ensures high interest from global opinion-leaders and the media.n A brand that business leaders trust The EconomistIntelligence Unit is a leading provider of country, industryand management analysis. For nearly 60 years we havedelivered vital business intelligence to influential decisionmakers around the world. Our extensive global reach andunfettered independence make us a trusted and valuableresource for international companies, financial institutionsand government agencies.14 The Economist Intelligence Unit 2007n Where global means global The Economist IntelligenceUnit is the world leader in global business analysis. Clientprogrammes are enriched by our extensive local businessknowledge, combined with an insightful internationalperspective. We employ 130 full-time country specialistsand economists. Between them they speak 25 languages,and have a deep understanding of politics, economics, risk,industry and management issues. Our team is supportedby a global network of over 500 expert contributors in over200 countries.n Unique access to senior executives Our clientscomprise over 5,000 organisations worldwide, with manyindividuals at the top of their fields. Executives come to usfor analysis and insights they can’t find elsewhere.Over 1.5m business users are authorised to use our websites. There are executives who attend our 250 conferencesand meetings throughout the world each year, or read ourwhite papers or survey results, or the research we distribute through online partners like Bloomberg, LexisNexisand Thomson. We maintain a survey panel of over 20,000executives globally. We also draw on The Economist Group’sunique global database of 6m past and current clients,which includes all subscribers to The Economist.n Working for you We recognise that you have communications goals as distinctive as your business. So we createan integrated thought leadership programme aligned withyour objectives.Whether you want to reinforce your position as a thoughtleader in a particular field, benefit from association withour brand, or create networking opportunities with yourtarget clients, we work with you to achieve your aims.

Whilst every effort has been taken to verify theaccuracy of this information, The EconomistIntelligence Unit Ltd. cannot accept any responsibilityor liability for reliance by any person on this paper orany of the information, opinions or conclusions setout in the paper.Project DirectorsLou CeliSVP and Publishing DirectorEconomist Intelligence Unit111 West 57 StreetNew York NY 10019212 554 0632louceli@eiu.comJeremy EagleGlobal Marketing DirectorEconomist Intelligence Unit111 West 57 StreetNew York NY 10019212 554 0649jeremyeagle@eiu.comRegional business coordinatorsBarry Rutizer, Vice-President,Business DevelopmentEconomist Intelligence Unit111 West 57 StreetNew York NY 10019212 554 0611barryrutizer@eiu.comRichard Hargreaves, Regional SalesDirector, Sponsorship & Advertising UKEconomist Intelligence Unit26 Red Lion Square,London WC1R 4HQ 44 (0)20 7576 8162richardhargreaves@economist.comTim Hill, Director, Sponsorship Sales,Asia PacificEconomist Intelligence UnitRoom 6001, Central Plaza18 Harbour RoadWanchai, Hong Kongtimhill@economist.com852 2585 3859Chris Williams, Business DevelopmentDirector, CEEMEAEconomist Intelligence UnitOlzeltgasse 3/7A1030 ViennaAustriachriswilliams@economist.com 43 (0)1 712 4161

LONDON26 Red Lion SquareLondonWC1R 4HQUnited KingdomTel: 44 (0) 20 7576 8000Fax: 44 (0) 20 7576 8476E-mail: london@eiu.comNEW YORK111 West 57th StreetNew YorkNY 10019United StatesTel: (1.212) 554 0600Fax: (1.212) 586 1181/2E-mail: newyork@eiu.comHONG KONG60/F, Central Plaza18 Harbour RoadWanchaiHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: hongkong@eiu.comVIENNAOlzeltgasse 3/7A1030 ViennaAustriaTel: 43 (0) 1 712 4161Fax: 43 (0) 1 712 4165E-mail: vienna@eiu.com

an annual survey of business-to-business (B2B) marketing that was designed to identify the challenges that face market-ing executives the world over. Our research drew on two main initiatives: an online survey of more than 130 marketing executives from a wide list of B2B firms, including a cross-section of indus-

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