Banner Ads Are Alive and Well in BTB

There’s a lot of hand-wringing about the crash and burn of Internet banner advertising. Click-through rates are less than 3 per thousand, and CPMs hover around $1. What a disaster.

There’s a lot of finger-pointing, too. Too much inventory. Too much VC money thrown around. Big-brand advertisers don’t get the Internet. Is it branding? Is it direct response? Everyone has an explanation for the death of the banner.

But you may be surprised to learn that banner advertising is kicking butt in business-to-business. CPMs hold around $40 to $70, advertisers are coming back for more and publishers are making money.

So what’s the difference? Business marketers are doing Internet advertising right. They are targeting carefully, delivering relevant messaging and integrating banner use into their entire go-to-market strategies.

This makes sense, because business buyers are online all the time. The recent Nielsen//NetRatings study confirmed it: The Web ranked at the top of media options to reach business decision makers.

I recently checked in with a few knowledgeable people in BTB banners. Bill Furlong runs B2B Works, the leading interactive marketing company specializing in business markets, and his business is booming. Not that Bill dodged the recession altogether – his employee count is now 30, down from 80 at the top. But he’s still here, and enjoying plenty of activity.

Bill notes that BTB advertising response rates are holding strong compared with consumer click-through rates. He’s not saying what they are, exactly. Like any good direct marketer, Bill knows that there are too many variables – the industry, the specific Web site, the creative, the offer. As usual, the answer is, “It depends.”

But he will say that ads in e-newsletters are the strongest of all, with click-through rates as high as 10 percent to 12 percent for text and HTML. The secret, of course, is in the targeting.

Chris Elwell, vice president and general manager of online at Jupitermedia, notes that the BTB market contains many subgroups. While marketers as a category tend to respond to banners, programmers don’t click much at all. Similarly, the low end of the BTB market – search engines, for example – may be selling for single-digit CPMs while the highly targeted audiences can go for $70 to $90 per thousand.

So let’s review what business marketers are doing right. There are lessons for all of us.

Advertise as part of the larger go-to-market strategy. Banners are only part of the process. They can’t do everything. What are they good for? Generating inquiries and reinforcing the message during the selling cycle. So business marketers are using banners at the points they perform best.

Targeting is everything. When you are selling widgets, and your audience is widget buyers, your media plan can be pretty straightforward. You buy banners on sites where widget buyers hang out. Then, you talk to these prospective buyers about the wonderful features and benefits of your widgets. You help them solve their problems and do their jobs. Your message is meaningful, they respond, you gather a lot of high-quality inquiries. They convert to sales at a satisfying rate. And you happily advertise there again.

Make the call to action the next step in the buying process. We all know that a strong direct response ad relies on a powerful call to action. But business marketers take this adage a step further. They break down the buying process into its component steps (thankfully, business buying is fairly standardized), they identify which stage the prospect is in and they create offers and calls to action that literally move the prospect further along. For example, if the buyer needs to touch and feel the product before buying, the offer might be “Call now for a free demo.”

Conduct a series of touches. Managing a complex selling process, and focusing on a narrowly targeted audience, the business marketer relies on a series of communications. With cookies, an ongoing set of banner touches to a single prospect can be monitored and adjusted to fit the needs of the particular buyer. Banners also are useful in combination with other media – to drive traffic to a Web site, for example, or to gather inquiries for later qualification.

Test like crazy. Business marketers sometimes find it hard to squeeze tests into their small campaigns, but with banners, testing is easy. Internet marketers tend to call it optimization, and they have systems that track every conceivable variable – offers, creatives, the works. The systems are designed to serve up more of what works and scale back the underperforming elements.

Use larger units. Chris Elwell recommends the 360×300 pixel size, which is more than paying for itself with his clients. Business buyers don’t necessarily need the fancy creatives and high production values common for consumers, but the large size is effective, he says.

Try some of the new technologies. Internet marketing services companies are devising new ideas every day. B2B Works, for example, offers a unit it calls the WindowShade, which drops down a menu of customized options when the visitor mouses over the banner or button. Clients can use WindowShade to offer useful features like white papers, product demos and newsletter sign-up.

Create a new revenue stream. Some live-wire business marketers are finding that they can sell banner space on their own Web sites, creating a new source of revenue. GE Polymerland, for example, accepts ads from Tinius Olsen, the maker of testing machinery for manufacturers. When the advertiser is non-competitive, this practice becomes a service to customers.

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