SEM at B2B Tech Startups - Just Flirting

Search Engine Marketing, or SEM, is a pretty sexy topic. What is Search Engine Marketing? SEM is basically a form of online advertising. SEM connects buyers with sellers. SEM is part of your company’s efforts to increase upstream traffic or visits to your site. In my mind, SEM is not search engine optimization (or SEO). I’d say SEO is a subset of SEM. Further, SEM cannot fully realize its profit-driving potential without SEO. SEM is used quite effectively by most consumer-facing marketers but not used frequently enough by B2B tech startups.

SEM is a vital component of the overall marketing mix for those who are addressing the consumer marketplace. SEM is less popular in the B2B arena for a variety of reasons but this is slowly changing.

Why is SEM not used by B2B tech startups? There are a host of reasons. I’ll just talk about the big three reasons here. First, web marketing is very low on the list of priorities as they pertain to a B2B startup’s overall marketing mix. This is a direct result of the go-to-market model and sales cycle as well as a bit of the “why fix what’s not broken” syndrome. Second, lead harvesting, or cultivation, is excruciatingly hard to design because B2B tech marketers typically do not firmly control the implementation and control phases of the program. And, third, there is a severe Web marketing talent gap caused by a generational factor. I’ll get a bit more specific on each of these things.

B2B tech startups do not have sites that get a lot of traffic. It doesn’t get a lot of traffic because it doesn’t use its web site as a direct marketing vehicle. They hire a bunch of really expensive sales people and go after the brute force selling. Infrastructure startups in particular have very poor cost structures and economies-of-scale. The best ones succeed despite these characteristics because of the inherent high margins of the business as well as the very steep (but, profitable) technology adoption curve it can ride once it starts to grow.

For them, websites are nothing more than digital corporate brochures. Pages are generally static and informative. These websites are not part of the purchase cycle. Most B2B tech startups have some degree of “lead” generation built-in to their site but it’s really nothing more than white paper offers or a handful of registration pages tied to a webinar or something similar. In other words, the website serves as a destination to direct and “handle” leads from other permission-based campaigns. So, what about the hot lead customers who volunteer themselves through searches and permit you to sell them? Without SEM in place, many of these prospects will never find their way to your front door. Most startups strike down the thought of making an investment in SEM because they do not have enough site visitors to justify the expense. This is flawed logic. The reality is that your site gets no visitors BECAUSE you do not have an effective SEM strategy and program in place!

Next, marketers easily give up on running truly effective lead generation campaigns because they feel that they cannot be accountable for its outcome. This happens because most B2B startups have a clear division between sales and marketing. SEM is a highly measurable marketing arsenal which has to be closely monitored and iterated on a daily basis. If the wall between sales and marketing is not removed, there is no way to effectively implement SEM. Tossing leads over the fence and praying that sales will act on it in timely fashion is a futile effort. But, unfortunately, almost all B2B tech startups are structured in this way.

And, last, SEM is ignored because marketing VPs do not understand it. Most people who run marketing teams at early to mid-stage startups are folks in their mid-40s to mid-50s. They stick to what they know and outsource the rest. Marketing executives are generally older in B2B tech and infrastructure companies. Given that marketing VPs turnover at a high rate, most of these surviving execs are pretty successful at what they do. They play the musical chairs with new startup jobs because they’re good at what they do – not the reverse. Yes, some are complete imbeciles who get jobs because of who they know (not what they know) but that’s a different topic. For most, much of what they’ve done successfully is the good ‘ole conventional stuff – trade shows, third party list purchases, co-marketing with publishing houses, industry analyst relations, PR, product marketing collateral, case studies, and so on.

Mention something like SEM and the exec will suddenly take the discussion up a notch and get “strategic.” He’ll fight to preserve his credibility and turn the table on you. He’ll talk endlessly about brand image, market positioning, value proposition, segmentation, lead engines, conversion rates, throughput, and so on. Blah blah blah. Ask the person what exact trends he’s seen on the search strings that lead to higher traffic and lower bounce rates then tie it directly into a concrete, tangible profit impact … and you’ll hear dead silence.

Rules to follow –

1. Not everyone needs hard core SEM but if you want your Website to do more than merely serve as a digital brochure, you’ll need to implement SEM (deep analysis of others’ campaigns, paid inclusions, pay per click or PPC ad campaigns, standard paid ads on results, etc.);
2. Do not run a SEM program without getting SEO in place;
3. Remember that SEM gets people to a destination but what happens once they’ve arrived depends on offering relevance (landing pages, content) and immediacy (offers) while gaining permission and trust (focusing on them, not you);
4. SEM alone serves as a more precise way of attracting qualified traffic but it is still an open loop or netting technique – real lead generation and harvesting still needs to close that loop;
5. Whether in-house or outsourced, dedicate resources to SEM as its own medium because it needs to be monitored constantly and continually adjusted by experts.

- John

Comments

[Megan]

Thanks for the great info! :)

[John Oh]

Glad you enjoyed it, Megan!