B2b media cannot live on lead generation alone, but by every additional product or service for which a marketer will pay. In all but a few vertical markets, the question is no longer whether to offer lead generation, but how to integrate lead generation into a mix of offerings that will ultimately yield profits.
At e.Republic, Exec VP Don Pearson analyzed what the company's business would look like if it relied exclusively on lead generation for revenue. Except for Governing (acquired in late 2009), all of e.Republic's media brands compete in the technology sector, the vertical that has seen the greatest competition and commoditization in lead-gen pricing.
“We looked at the total traffic we could potentially generate among our markets and we looked at all our costs,” Pearson said. “Then we asked what we would have to charge per lead to make a profit.” That number came out well over $1,000 per lead, incrementally more than the market would bear.
So e.Republic, like most other media companies competing in lead generation, has learned to make the economics work by wrapping lead-gen in multidimensional programs where margins can be lifted with display advertising, research, social media consulting, virtual and face-to-face events, and a growing array of marketing services.
Marketers want leads. This year customer acquisition is the No. 1 goal of three quarters of b2b marketers, according to research conducted for BtoB's “2012 Outlook: Marketing Priorities and Plans.” (The study was based on an online survey of 343 b2b marketers, conducted between Nov. 21 and Dec. 12.) While that goal seems clear, marketers and media companies still don't always see eye-to-eye when it comes to defining a lead—or a lead-gen product.
Chris Chariton, senior VP-product management and supplier marketing at GlobalSpec, said, “Every customer we work with may have a different definition of what they think is a lead, and most media choices blend lead-gen and branding. Clients who advertise in our e-newsletter will get a different type of lead than they get from a 40-minute custom webinar. There's a different level of branding and engagement,” she said.
Tom Cintorino, exec VP-digital media at Northstar Travel Media, said: “There has been too much focus on trying to categorize [media] products as lead-gen or not. We could say webinars are lead-gen, but they have other roles. Some display advertising can incorporate downloads and other lead capture. Is that lead-gen, or branding? What about online education? If someone signs up to learn more about a topic and a sponsor gets those names, isn't that a lead?”
B2b media companies have had some success charging a premium for the leads they generate by making the case that their leads are of higher quality than those that come from companies using SEO, SEM and other less-targeted methods to acquire leads. Media companies hope the increasing adoption of Internet marketing software by clients will help in this effort by connecting the lead, and its source, directly to the ultimate sale.
When marketers have the ability to track the progress of leads through their own pipelines, as well as to automate lead nurturing, “we see it as positive,” said Bob Melk, senior VP-group publisher and CMO at IDG Enterprise. He added that IDG's process of generating leads offers additional benefits marketers cannot get through their own systems, such as tracking the potential lead's interaction with editorial content or competitors' assets.
Scott Vaughan, CMO of UBM TechWeb, said b2b companies go through a three-stage process after they implement marketing automation. “Marketing automation comes into play on the marketer's website, where they are trying to capture and track leads. So the first thing they realize is that they need to feed in more leads to make it work. The second phase is when marketers start moving prospects through a nurturing process, when they realize that they need to create content that is matched to each of the phases of the purchasing process,” he said. Many b2b media companies, including TechWeb, are expanding their content marketing services to meet this demand.
“In phase three, marketers recognize that this is really hard work and that publishing is not their core competency,” Vaughan said. “At that point, they may decide to outsource the process altogether or they demand that their lead-gen partners bring in more qualified leads.” Although marketers will likely pay more for better qualified leads, Vaughan added that marketing automation, in itself, “is not a game-changer.”
One veteran of b2b media sales who asked to remain anonymous agreed. “When lead-gen becomes automated, marketers tend to think everything will be OK if they just press a button,” she said, but additional organizational effort is required to close the loop between marketing efforts and sales results. As b2b companies get better at this, “the question will no longer be which media company has the best audience, it will be who has the best real-time intelligence on prospective buyers,” she said.
B2b media companies cannot stand still if they want to remain competitive in lead generation, and those that are committed are continually refreshing offerings and approaches.
Even GlobalSpec, launched in 1996 as an online search engine in the manufacturing space with a lead-gen revenue model, now incorporates lead-gen within a wider array of medialike offerings. GlobalSpec now publishes more than 70 electronic newsletters, has branched into virtual events and recently debuted a program of custom webinars.
“Our newsletter business is now growing more rapidly than our original catalog and directory products,” GlobalSpec's Chariton said. “Newsletters offer branding, reach and frequency in front of a targeted audience, which is the traditional advertising model. Combined with that, we can generate contacts and inquiries each time a reader engages with advertiser content in the newsletters.”
Last fall, e.Republic hired Justin Greeves as corporate VP-research, a new position. He came to the company with two decades of experience in public affairs, public opinion and market research.
“Original research allows us to take a step away from anybody who might be called competition,” Pearson said.
“We'll be turning traditional lead generation on its head by developing authoritative, high-quality business intelligence,” Greeves said.
Among other efforts, Greeves will help build out single-topic special reports, which e.Republic has been using in the education tech field with its Converge brand. These programs, with original research at their center, are sold in a one-price package to a limited number of sponsors. They include a BPA-audited print publication, leads from downloads of the research reports, webinars based on the research and invitations to an exclusive face-to-face event.
“We have to raise the awareness that lead-gen is not just a marketing stat,” Pearson said. “We leverage the demand for lead-gen when we put together an integrated campaign of engagement in the marketplace. Having a mix of offerings allows us to have some profit margin—and a future.”
TechWeb's Vaughan expressed a similar view. “You have to integrate lead-gen into your business model so that it's additive,” he said. “Our target is to get half of our revenue from the end-user professional and half from the marketing client, of which a portion is lead generation.” At the heart of TechWeb's “marketing as a service” strategy, geared to the most sophisticated tech marketers, is a sustained, ongoing relationship with the client. “We've been able to expand from doing lead generation to generate contacts to layering on the services that qualify those professionals for marketing organizations,” Vaughan said, adding that most of those services are fee-based.
As a company, IDG has an ever-growing number of lead-generation programs designed to fit the needs of tech marketers. Over the past 16 months, IDG Enterprise has introduced three programs primarily focused on lead generation—LeadAccel, the White Paper Configurator and Knowledge Vaults. “Over the last one to one and a half years, advertisers are expecting a second layer of qualification or lead nurturing,” said Melk, who became IDG Enterprise's CMO as well as senior VP in October 2011.
LeadAccel is a premium, full-service program. Using proprietary technology, LeadAccel tracks a user's consumption of content. The program provides clients with an engagement profile for each lead that lists all the topic-specific content that person has accessed, including editorial and competitors' content; scores leads based on engagement with that content; and provides a plan to move prospects through the purchasing process in an ordered sequence until a target lead score is reached.
The White Paper Configurator makes the most popular lead-gen asset more useful to the tech buyer by customizing content based on the way a potential lead answers questions about their interests. The Knowledge Vaults also provide a customized experience for the tech buyer by allowing the user to choose any content, at any time, from the vendor's “vault” once the person registers. “Information in a Knowledge Vault is broken down into bite-size nuggets and different media types, including PowerPoint presentations, short videos, links to webcasts and other types of assets,” Melk said. “The environment does the lead nurturing while giving freedom to the user.”
The latest offerings from e.Republic, TechWeb, GlobalSpec and IDG Enterprise have one thing in common: They are all designed to provide more useful content for b2b buyers.
“Marketers are being asked to be publishers and increasingly coming to media companies to find the expertise on voice, to understand what's needed at various points in the purchase process and to get help creating content or enhancing their current assets to make them more effective,” Melk said.