The B2B Digital Marketing Shift (Presentation of results for a commissioned study conducted by Forrester Consulting on behalf of American Business Media)

Agenda What do B2B marketers believe are the most effective marketing vehicles? How effective are online marketing vehicles? How is the B2B marketing mix changing?

Survey Background American Business Media commissioned Forrester Consulting to conduct a survey of B2B marketers Survey fielded July – August 2005 to a screened subset of members of eRewards panel 867 responses across a wide range of industries and titles Click here for more on the survey methodology

Definitions When the respondents completed the survey, they used the following definitions: Business-to-business / trade marketing efforts: targeting large, small, or medium-sized companies, small offices or home offices, retailers, wholesalers, or distributors General business magazines and newspapers: publications that cover broad business issues and economic topics (e.g., Wall Street Journal, Business Week, Forbes, etc) Industry-specific / trade magazines (business-to-business/trade): publications that focus on news and trends affecting a specific industry (e.g., Progressive Grocer, Medical Economics) Web-based events: product demonstrations, briefings, or presentations on clients, product/services, and/or industry topics conducted for customers and/or prospects on the Internet using services like Webex, etc. In-person events: trade shows, conferences, product demonstrations, or presentations on industry topics conducted for customers and/or prospects held in-person at a hotel or other meeting facility. Online marketing: e.g., ads, search, email, directories, and sponsored Web content. In the course of this presentation, we use these additional terms: Online advertising: e.g., search, ads, and content sponsorship on Web sites. Other online marketing: e.g., Web-based events, email lists, and online directories. Marketing communications: e.g., public relations, custom publications, printed newsletters

Key findings – B2B Marketing Mix Industry-specific marketing opportunities of all kinds (trade shows, magazines, web sites) are viewed as more effective than general business magazines or web sites. The most effective branding vehicles include in-person events and industry specific magazines. Online is as effective at branding as general business magazines and TV. The most effective lead generation vehicles include in-person events, industry specific magazines, and online marketing. Fewer marketers will use general business magazines, direct mail, and newspapers, and those using these media will only minimally increase spending, implying a shift of marketing budget allocation toward digital media. 48% of B2B marketers use online marketing today, and spend 24% of their budget online

Confidence interval: + / – 3.3 percentage points Industry-Specific Vehicles Are Most Effective For Branding “How effective are the following marketing tactics at building brand image?” Online is as effective as TV, general business magazines, and newspapers (On a scale of 1 to 6, 1 being “very ineffective” and 6 being “very effective,” the chart reflects the percentage selecting 5 or 6) Confidence interval: + / – 3.3 percentage points (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

Confidence interval: + / – 3.3 percentage points Industry-Specific Vehicles Are Most Effective For Lead Generation “How effective are the following marketing tactics at generating qualified leads?” Online is more effective than TV, general business magazines, and newspapers (On a scale of 1 to 6, 1 being “very ineffective” and 6 being “very effective,” the answers reflect a combination of 5 and 6) Confidence interval: + / – 3.3 percentage points (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

2005 B2B Marketing Spending Events 15% Direct Mail 9% General publications 12% Marketing communications 16% TV and radio Directories 3% Other 2% Online Company web site Trade magazines 7% Industry-specific/trade magazines are viewed as more effective than general publications, but receive a smaller share of budget. (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

2005 B2B Online Marketing Spending Industry-specific/trade sites are viewed as more effective than general sites, but receive a smaller share of budget. Percent of 2005 Online Marketing budget by tactic General sites includes portals such as Yahoo!, search sites such as Google, and general business sites such as Forbes.com (Base: 406 US B2B marketers using online in 2005; Source: Forrester Consulting Survey for ABM)

Almost Half Of B2B Marketers Are Using Online Marketing “Which of the following B2B / trade marketing tactics has your company used in 2004 and/or 2005? Which will you use in 2008?” In-person events 60.8 60.2 Online marketing 54.6 48.7 48.7 Direct mail 56.2 Industry-specific/trade magazines 48.3 45.4 44.1 Custom publications 45.8 TV 44.1 41.4 41.6 2008 Public relations 37.7 2004/5 38.6 General business magazines 41.3 35.6 Newspapers 46.9 35.1 Printed newsletters 43.5 33.0 Radio 35.3 24.8 Printed directories 26.8 (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

Online Marketers Have Already Shifted 24% of the Budget to Online “Using your best estimate, what percent of your business-to-business/trade marketing budget was spent on each of the following marketing tactics in 2005?” In-person events 16.34 14.37 Television 12.20 7.77 Direct mail 9.90 7.42 Newspapers 8.98 5.06 Industry-specific / trade magazines 8.58 5.82 8.22 Your company’s Web site* 10.09 Custom publications 7.73 4.52 General business magazines 6.75 3.37 Printed newsletters 6.44 3.31 Radio 5.80 4.20 Public relations 4.25 5.70 Printed directories 2.81 Offline marketers Online marketers 2.18 Other* 1.83 1.83 Online Advertising 0.17 18.17 Other Online Marketing 0.00 6.18 Note: Offline marketers are defined as those who indicated they are not using any online marketing vehicles in 2004 or 2005. *Adjusted for offline marketers. (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

Online Marketing Will Be More Important Than Direct Mail and General Business Magazines “How much of a role will the following marketing tactics play in your B2B/trade marketing budget in 2008?” Experimental role Major role (Mean rating on a scale of 1 to 6, 1 being “experimental role” and 6 being “major role”) (Base: 867 US B2B marketers; Source: Forrester Consulting Survey for ABM)

Appendix Study Objective and Methodology Marketing Goals Online Marketing Data by BIN

Appendix 1 – Study Objectives And Methodology

Objectives As digital marketing becomes more mainstream, ABM members wonder how it will impact their business. But most research on digital marketing only addresses consumer marketing, not B2B. ABM engaged Forrester Consulting for an independent analysis of the trends in B2B digital marketing spend across 21 categories of B2B marketers. Specifically, the project addressed the following questions: What percent of marketing spend do B2B marketers allocate to digital media? What is the value proposition of digital marketing and how big a role will it play in the future? What are the perceived strengths and weaknesses of each element of the B2B marketing mix? How will spending on digital marketing change in the next three years and where will the money come from? For each of the 21 categories of B2B marketers, what percentage of the budget is currently being spent on digital media and how important will digital media become in the next three years?

Methodology Forrester developed research and screener questions for an online survey jointly with the American Business Media to address the current and future state of business-to-business digital marketing. Forrester fielded screener questions to a predetermined portion of the eRewards panel to identify qualified respondents. Membership into the eRewards panel is by invitation only. Potential panelists can request an invitation through an eRewards sponsor (i.e., American Airlines, Hilton, Hertz, etc.). Once the potential panelist completes an online profile and the request is accepted, panelist will then receive a notification via email. Members can earn up to $1 in e-Rewards for each e-mail they receive, and much more for providing their opinions on periodic research surveys. Once sufficient currency has been accumulated, members can then redeem their e-Rewards for rewards from companies like American Airlines, BLOCKBUSTER, Hertz, Hilton, IBM, Omaha Steaks, and e-Bags. There are over a half million active business panelists. Forrester fielded the entire survey (including screeners) to qualified eRewards panelists and received a total of 867 respondents within 21 various industry areas. Determine quote – we work with clients to determine the basics of what a respondent would look like – they sit in IT, about 1/3rd should come from SMBs, etc. Develop screener questions – we work with the client as we design the survey, to design additional screening criteria that we wouldn’t have access to in a panel database (i.e., Have you deployed Windows or Linux -based solid state thin client devices in your organization?) Field screeners – we field the screener question, as well as questions about the quota (i.e., company size) to panelists to qualify them as respondents. We field the entire survey, as well as the screeners, to the qualified set of panelists. This allows us to again screen the respondents and ensure that they are who they say they are. Companies, like Budget rental car or American airlines, will send customers an invitation to earn more points, etc. and join eRewards. They can use their points toward rental cars or frequent flyer miles, etc. To date, there are around 700,000 active business panelists at North American companies. Click here to return to the presentation

Appendix 2: Respondent data

Respondents By 2005 Marketing Budget (Base: 867 B2B US marketers; Source: Forrester Consulting Survey for ABM)

Respondents By Company Revenue (Base: 867 B2B US marketers; Source: Forrester Consulting Survey for ABM)

Respondents By Title (Base: 867 B2B US marketers; Source: Forrester Consulting Survey for ABM)

Appendix 3 – Marketing Goals One survey question presented respondents with a list of 12 specific marketing goals and asked them to pick the best medium from each from the following list of advertising choices: General business publications Industry-specific publications General business Web sites Industry-specific Web sites Your company’s Web site None of the above The following page lists the 12 marketing goals

Review the statements below and indicate which advertising option, if any, in your opinion best matches the statement The best medium to reach decision makers The best medium to reach senior executives that approve purchases The best medium to reach other purchase influencers The best medium to reach the highest percentage of prospects for my company’s products/services The best medium to raise awareness of my company’s products and services The best medium to enhance the credibility of my company’s products/services The best medium to reach highly involved users/readers The best medium in terms of the frequency the audience reads/uses it The best medium in terms of users’/readers’ level of trust in the content The best medium to generate the most qualified leads The best medium to generate the highest number of leads The best medium for ROI

Appendix 4 – Online Marketing Data by BIN

B2B Marketing Profile -- Agriculture

B2B Marketing Profile -- Agriculture Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Agriculture Base: N=30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Agriculture % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics Base: N= 30 Source: Forrester Consulting Survey for ABM 2008 2004/5

B2B Marketing Profile -- Architecture

B2B Marketing Profile -- Architecture Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Architecture Base: N=30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Architecture % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Automotive

B2B Marketing Profile -- Automotive Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N=32 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Automotive Base: N=32 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile –Automotive % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 32 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Aviation Base: N= 39 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Aviation Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 39 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Aviation

B2B Marketing Profile -- Aviation % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 39 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Banking, Finance & Insurance

B2B Marketing Profile – Banking, Finance & Insurance Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 47 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Banking, Finance & Insurance Base: N= 47 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Banking, Finance & Insurance % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics Base: N= 47 Source: Forrester Consulting Survey for ABM 2008 2004/5

B2B Marketing Profile – Building, Design & Construction

B2B Marketing Profile – Building, Design & Construction Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 45 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Building, Design & Consutruction Base: N= 45 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile –Building, Design & Construction % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N=45 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Business, Advertising and Marketing

B2B Marketing Profile – Business, Advertising and Marketing Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 55 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Business, Advertising & Marketing Base: N= 55 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Business, Advertising & Marketing % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 55 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Computing

B2B Marketing Profile -- Computing Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 69 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Computing Base: N= 69 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Computing % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 69 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Electric Engineering

B2B Marketing Profile – Electric Engineering Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 33 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Electric Engineering Base: N= 33 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Electric Engineering % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 33 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Government

B2B Marketing Profile -- Government Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N=35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Government Base: N= 35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Government % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Healthcare

B2B Marketing Profile -- Healthcare Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N=56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Healthcare Base: N= 56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Healthcare % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Manufacturing & Processing

B2B Marketing Profile – Manufacturing & Processing Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Manufacturing & Processing Base: N= 57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Manufacturing & Processing % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N=57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Movies, Radio & TV

B2B Marketing Profile – Movies, Radio & TV Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Movies, Radio & TV Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Movies, Radio & TV % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Pharmaceuticals

B2B Marketing Profile – Pharmaceuticals Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 31 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Pharmaceuticals Base: N= 31 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Pharmaceuticals % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N=31 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Professional Services

B2B Marketing Profile – Professional Services Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N=56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Professional Services Base: N= 56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Professional Services % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N=56 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Resources

B2B Marketing Profile – Resources Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Resources Base: N=30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Resources % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Restaurant

B2B Marketing Profile – Restaurant Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Restaurant Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Restaurant % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Retail Services

B2B Marketing Profile – Retail Services Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N=57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Retail Services Base: N= 57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Retail Services % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 57 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Science and R&D

B2B Marketing Profile – Science and R&D Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Science and R&D Base: N= 35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Science and R&D % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N=35 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Transportation

B2B Marketing Profile – Transportation Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 49 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Transportation Base: N= 49 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Transportation % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 49 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Travel

B2B Marketing Profile -- Travel Respondent Profile - Annual Revenues Marketing Spend Less than $1 million $1 million to $10 million More than $10 million Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile – Travel Base: N= 30 Source: Forrester Consulting Survey for ABM

B2B Marketing Profile -- Travel % of respondents increasing marketing spend by more than 5% in 2008 % of 2005 budget % using this marketing tactic Marketing tactics 2008 2004/5 Base: N= 30 Source: Forrester Consulting Survey for ABM