February 22, 2000

FULL COVERAGE - Online Marketing Loses Out: Exclusive Internet Market-Maker Survey Results

SUMMARY: No summary available
Last week MarketingSherpa polled Net
market-makers (a.k.a. B-to-B vertical portals) on how they
spend their marketing budgets. Online marketing was the
big loser -- 82% of respondents spend less than 20% of
their total marketing budgets on online advertising.
Where does the money go instead?

--Trade-Show Spending: 52% spend 20%-30% of their budget
on industry shows. 15% spend more. This is where you
meet customers face-to-face, remember?

--PR/Media Relations: 52% spend 10%-20% of budget on PR,
while 33% spend even more. This number could be
affected by the number of respondents (about half) still
seeking VC funding. And nothing warms a prospective
investor's heart more than good buzz in the trades.

With all the VC cash floating around B-to-B these days, 70%
of respondents say budget size is not based on their e-
marketplace’s yearly transaction volume (e.g. real
business conducted). At this early stage of the game,
69% of respondents expect a yearly transaction volume of
less than $50 million. 15% will see more than $100
million in transactions this year. Their marketing
budgets ran the gamut, ranging from less than $200,000
(27%) to more than $1 million (46%).

Additional results:

--19% of respondents set this year's Marketing
Budget higher than $5 million.

--11% DO believe the Internet is an important
way to reach potential users, spending a hefty
35%-50% of budget on online ad media.

--33% de-emphasize trade shows, spending less than
30% of budget on industry events

--We know that offline marketing is important, but
15% of B-to-B Net market-makers are heavily investing in
old media, spending more than 50% of budget on offline ads.
--15% believe that PR is worth less than 10% of budget.

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