Transcript of B2B Search Trends Podcast Based on Enquiro's Survey Findings

Edited transcript of BriefingsDirect[TM] podcast on B2B search usage, trends and future direction with host Dana Gardner, recorded June 26, 2007.

Listen to the podcast here. Watch the video here. Sponsor: ZoomInfo.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to a sponsored BriefingsDirect podcast. Today, a discussion about online search and its role in business-to-business (B2B) activities, particularly the research and acquisitions process for people who are in businesses trying to find goods and services. They seem to be using search more than ever.

We're going to look at a survey conducted last March, a fairly recent look at B2B users, their relationship to search, and how search is shifting based on the findings. Joining us to discuss this we have the originator of the survey, President and CEO of Enquiro Search Solutions, Gord Hotchkiss. Welcome to the show, Gord.

Gord Hotchkiss: Thank you.

Gardner: Also joining us to add some analysis and perspective on where search for B2B activities is going is Bryan Burdick, COO of ZoomInfo. Welcome, Bryan.

Bryan Burdick: Dana, thanks for having me.

Gardner: It seems that people, whether they're buying consumer goods, small business supplies -- anything from Gorilla Glue to guided missiles -- are using search at some point in this process. Some people start and end with search. They actually buy the products through a search process. I want to start by understanding a little bit about the survey itself and the fact that it’s the second survey that’s been done on this B2B search activity, the first being in 2004.

So, let’s go to Enquiro with Gord. Tell us a little bit about the history and some of the major bullet points of this particular survey?

Hotchkiss: As you said, we did the original survey in 2004 and, at the time, there wasn't a lot of research out there about search in general, even on the consumer side. There was virtually nothing on the B2B side. We knew search was important, just from what our clients were saying and the results we had had, but we hadn’t done anything extensive enough outside our client base to start to quantify how important it was.

The first survey was an attempt to do that. It certainly proved that search was important. We found that online activity, in particular that connected with search activity, was consistent in a large percentage of purchases. In 2007, we added more insight to the methodology. We wanted to understand the different roles that are typical in B2B purchases -- economic buyers versus technical buyers versus user buyers. We also wanted to get more understanding of the different phases of the buying cycle.

We structured the survey so that we could slice the data based on those parameters and get more insight into those areas. As far as the main takeaways from the study, obviously online activity is more important than ever. In fact, we asked respondents to indicate from a list of over 30 influencers what was most important to them in making the purchase decision. Online factors, such as interaction with the vendor Website and interaction with the search engine were right up there with the traditional winner, word of mouth. What we see is a real link between those and looking for objective information and specific detail.

A lot of that search activity happens on specific properties, and we’ll be diving into that a little bit later in the podcast. We did notice an evolution of behavior as you move through the funnel, and the nature of the interactions with the different online resources changes how you navigate to them and how you go to different sites for information. But, online research was consistent through the entire process, from awareness right through to purchase.

There’s a lot of back and forth. Offline factors influence online activity and vice-versa. So, we saw a merging of the online and the offline worlds in making these decisions and trying to come to what’s the right decision for your company or what’s the right product or service.

Gardner: Tell us a little bit about Enquiro. You are a marketing, consulting, and research firm. Is that correct?

Hotchkiss: Yes. We work with clients in putting together their search campaigns in the B2B space, but we also have an active research arm. So, we're continually doing research primarily on the usability and qualitative analysis side, but we do survey work as well. The purpose of that is to provide more insight into how consumers use search and how businesses use search to make buying decisions.

Gardner: Three years between these surveys is probably not a lot for many businesses, but it’s a huge amount of time in the search industry. What would you say was the biggest difference in your results and findings over this three-year period?

Hotchkiss: Surprisingly, we didn’t notice huge trend differences in the three-year period. If anything, we saw increased reliance on online factors and probably just more activity online and more interactions with sites, but it was the continuation of a trend we saw in 2004. We didn’t see any big shifts. We just found increased reliance on online to do that research.

When we say "increased reliance," we're probably talking 10 percentage points up over the three years. So, if 65 percent of the people were doing it in 2004, 75 percent of the people are doing it now. That’s primarily where we saw the trends going.

Gardner: And, you say that that you're also seeing search applied to this process in different ways and different facets. For example, word of mouth would tip someone off to go look for something, and the first way that they look for it is by using search.

Hotchkiss: Yes. When we looked at the different phases of the buying cycle, it starts with awareness. You become aware that you need something. There was a high percentage of people -- in the high 60-percent range -- who said, "Once I become aware that I need something, the first place I'm going to go is the search engine to start looking for it."

A lot of that traffic is going to end up on Google. It was the overwhelming choice among general search engines for B2B buyers.

But, as you move through the process, you start doing what we call a "landscape search." The first search is to get the lay of the land to figure out the information sites that have the information you are looking for. Who are the main vendors playing in this space? Where are the best bets to go and get more information to help make this purchase decision?

So, those first searches tend to be fairly generic -- shorter key phrases -- just to get the lay of the land to figure out where to go. As you progress, search tends to become more of a navigational shortcut, and we’ve seen this activity increase over the last two to three years. Increasingly, we're using search engines to get us from point A to point B online.

As you get into the buying process, you’re familiar with the vendor site. You’ve been on the site. You’ve checked different product information pages. As you come back to that research process, you say, "I really want to find that product spec sheet that I saw on this vendor site." A lot of that navigation to those specific pages happens through a search engine. So, there are multiple touch points through the process.

Gardner: Now, you did this search in March, and you surveyed 1,086 people, North Americans, mostly women -- 63 percent -- average age 43 years old, with 67 percent of them having at least attended university.

Hotchkiss: Right.

Gardner: Can you tell us little bit more about these people? Are these people that you acquired through strictly business activities? How did you know that they were in a purchasing mode?

Hotchkiss: When we structured the study, we used our sampling partner, Survey Sampling International, for access to their B2B decision-maker panel. In two different parts of the survey, we asked, “Are you currently considering a purchase in excess of a thousand dollars?” That was a qualifying question. If they answered yes, they got to continue the survey.

That’s how we determined what role they were playing in this purchase that was happening right now. What were they considering purchasing? What was influencing them? We wanted to use a purchase process they were in the middle of, because it would obviously be fresh in their minds and they could really tell us what they were going through, as far as what influenced them.

We also wanted to get a retroactive view of a successful transaction. So, in the second part of the survey, we asked them to recall a transaction they had made in the past 12 months. We wanted to see whether that initial search led to a successful purchase down the road, and, at the end of the road, how the different factors influenced them. So, we actually approached them from a couple of different angles.

Gardner: Now, 85 percent of these people say they're using online search for some aspect of this purchasing process. It strikes me that this involves trillions of dollars worth of goods. These are big companies and, in some cases, buying lots of goods at over a hundred thousand dollars a whack. Do you concur that we're talking about trillions of dollars of B2B goods now being impacted significantly by the search process?

Hotchkiss: Absolutely. The importance of this is maybe the most mind-numbing fact to contemplate. Traditionally, the B2B space has been a little slow to move into the search arena. Traditionally, in the search arena, the big advertisers tend to be travel or financial products.

B2B is just starting to understand how integral search is to all this activity. When you think of the nature of the B2B purchase, risk avoidance is a huge issue. You want to make sure that whatever decisions you make are well-researched and well-considered purchases. That naturally leads to a lot of online interaction.

Gardner: I suppose if I am making a $100,000 purchases, and I make a mistake, I am not going to be around for long. Right?

Hotchkiss: Exactly. The other thing is that we don’t tend to be as emotionally involved with the B2B purchase. Things like branding play different roles than when you're doing consumer purchases. The brand affinity is something you might have if it’s an area where you don’t have a lot of experience. It may be a new need that’s coming on the horizon for your business. You are really starting from Square One, and that’s the perfect place for search to plug in and be the solution when you start researching those purchases.

Gardner: Right. These folks are looking for practical approaches and real information. Let’s go to Bryan Burdick at ZoomInfo.

This is growing quickly as an overall trend, but ZoomInfo, which is focused on business search, is growing much more rapidly. What’s driving your growth at ZoomInfo, and how does that relate to this B2B search activity?

Burdick: The business information search is a primary factor driving our growth. Our company right now is growing on two fronts. One is our traditional paid-search model, where we have subscription services focused on people information that is targeted at salespeople and recruiters as a source for candidates and prospects.

The more rapidly growing piece of our business is the advertising-driven business information search engine, which I think is a really interesting trend related to the concept you guys were just talking about. Not only does the B2B advertiser spend lots of money today trying to reach out, but the B2B searcher has new tools, services, and capabilities that provide a richer, better, more efficient search than they’ve had through the traditional search engines.

Gardner: By far, the largest player in this is Google with, according to the Enquiro survey, 78 percent use by this group of respondents. Way down the line was Yahoo!, and then far below that was MSN. It strikes me that Google is a general search engine, and yet we are asking for very specific business information.

Bryan, do you expect that we are going to see some sort of a specialization or a cleaving between general search and more vertical specialized search?

Burdick: Absolutely, and, in fact, that’s really ZoomInfo’s mission -- to do for the business-information search world what the Expedia or Travelocity did for travel search. When you think about it, you can actually go to Google and find an airplane ticket, but why would you?

It’s so much more efficient to go to one of these vertical search engines that are looking at the databases, looking at the data, and indexing it in a much more efficient way. You're starting to see that in a lot of other verticals. Travel has been the quickest to adopt that, but everything from business information, like ZoomInfo, to podcasts with Podzinger, and other types of vertical searches, have been focusing on a niche and organizing the content more efficiently.

Hotchkiss: One thing we found in the survey is that there's a natural evolution through the process. Although you might start on Google as you are trying to find those information sites, quite often it’s the verticals that people work into as they are starting to look for specific, more granular information on the companies they're thinking of doing business with. That’s where ZoomInfo and other vertical players fit a need.

Gardner: I suppose another thing that seems the same from 2004 to 2007 is the importance of a supplier’s Website. According to your survey findings, people are very interested in word of mouth. They use the search engine to move from that point to gather more information, but they're very quickly interested in solid, simple, straightforward, text-based information from the suppliers themselves. I suppose that underscores the need for sellers to have a very strong Website.

Hotchkiss: That was a really strong finding, and not really surprising. It made sense, but I think how important the straightforward information was to the people doing the research was somewhat surprising. It’s one of those things where you get findings in research and then afterwards, when you apply common sense to it, you say, "Yeah, that just makes sense."

But, remember these searchers are out to gather information for an organizational buying model. They are gathering information that will, in a lot of cases, be passed on to other individuals to help them make the decision as a group.

You don’t necessarily want to sit through a linear presentation of information, like an online video, or even a podcast, if your intent is just to pickup specific data and pass it along. Now, if you are the user, and this is that something you are going to be using, you may be a lot more open to a linear how-to demo. But, it’s important to match the content on your site to the types of buyers and individuals who are gathering the information.

The takeaway we got from this was to make sure you're covering the basics first. Make sure that you're getting the clear concise product information out. In a lot of cases, you know you are going to be compared to the competition. Why not enable some of that to happen on your site and make the buyer's job easier by arming them with the necessary equipment.

The number one thing that came across as desirable was pricing information, which is really tough for B2B marketers to put on the site, because in a lot of cases these are complex solutions. But, what the buyers are looking for is qualifying it in a budget range.

Is this a $10,000 purchase, a $100,000 purchase or a million dollar purchase? I need to know that to qualify, so I can move on. Please give me that information. It can be ranges. It doesn’t have to be specific, but I need to be able to qualify it.

Burdick: Dana, I would add that some of the typical mistakes that a B2B marketer will make from a search-engine marketing perspective is jumping too quickly or focusing too much on the actual advertising piece. They need to do that, but sometimes they forget about the search engine optimization. Very often, they leave that up to the technical team, which may optimize the search or the site in ways that aren't optimal from a marketing perspective.

Then, as Gord was saying, they get the user, or the potential customer, in there and the customer gets lost on their own site, searching for the type of information that they're looking for. It’s not like a consumer model, where the consumer already knows, in most cases that they are looking for a DVD player or whatever it is. They may even have a model number, and they're looking for the best price online. It’s much more of an information-gathering process in the B2B case.

Gardner: Perhaps the takeaway here would be that people want to get just the facts upfront and they want a ballpark figure, but they also want to be able to use search to get to that information fairly quickly.

So, if you’re going to optimize your site, your key information can’t be 18 pages deep into the search process, but you also have to consider that factual information needs to be as accessible as your main branding page.

Burdick: Absolutely.

Hotchkiss: One more point on that. A lot of B2B marketers like to capture as much information about a lead as early in the process as possible, so it can be handed over to the sales department, which can close the sale.

But, what happens in a B-to-B purchase is that the first touch point with your vendor Website is typically not the decision maker, the ultimate decision maker? It tends to be somebody who is gathering information to help arm the company to make that eventual purchase decision.

So, if you push to establish contact with that person, they're not ready to establish contact with the vendor, because they don’t have the buying power. Even if you do push to get it, your salespeople are spending a lot of time following up on leads that aren’t qualified buyers. They have to retrench down the road and try to re-establish connections with the person who has the economic power.

So, it’s really a "date," and, in a lot of cases, it’s a long series of dates. If you push too fast you are just going to push the prospect away.

Gardner: You don’t want to propose on the first date.

Hotchkiss: Yeah.

Gardner: On the other hand, one of the findings from the survey was that 50 percent convert to a sale online. So, that means that when the research, winnowing, triage, and the comparative shopping are over, the economic buyer, who is empowered to make a decision, will go back online and consummate the deal. Does that make sense?

Hotchkiss: Yeah. Here's some further insight into that, because we saw that number surprising when we did the overall data. When we pulled the data apart, we found that a lot of those purchases tended to be things like computer systems, where they might have been buying through a Dell or someone like that.

Gardner: The direct model.

Hotchkiss: We thought that was a really high online conversion rate. As we looked at the data a little more, we saw that in a lot of cases it was smaller software purchases or system-based hardware purchases. That made a little more sense, as we went down that road. There was a fairly strong manufacturing component, where people were buying parts and different things. In those cases, a lot of those purchases are made through an electronic marketplace. We're seeing that as an increasing trend too, e-commerce-enabled market places.

Gardner: I suppose it's also logical that when the price or the total purchase price is less than $50,000 or closer to $10,000, they’ll be more likely to do that online confirmation and make a purchase. To me, this says that small- to medium-sized businesses selling small types of goods should be very focused on search and B2B online activities. Does that follow?

Hotchkiss: Everybody needs to be focused on search. I can’t see an exception. You mentioned the percentage that said they would go online. We segmented out the group that didn’t indicate they go online to see what was unique about them.

The only thing unique about them was their age. They tended to be older buyers and tended to be with smaller organizations, where the CEO was more actively involved in the purchase decision. That was really the only variants we saw. If it’s a generational thing, then obviously that percentage is going to get smaller every year.

Burdick: Dana, could I ask Gord a follow-up question to that?

Gardner: Of course.

Burdick: I'm curious whether, as you dug into the data, you saw any differences between online follow-throughs to purchase on hard goods versus services. I'd think that people buy computers online, but if they're buying services from a B2B company, that tends to be offline.

Hotchkiss: When we were looking at influencing factors, B2B services was the one where word of mouth edged out online factors by a significant margin. When you're trying to retain a service, word of mouth is still very influential. In pretty much every other category, online was right up there with word of mouth, in some cases edging it out as an influencing factor.

Gardner: Okay, another number from this was that 95 percent said they use search to find what they want at some point or another, but 37 percent were still seeking other sources. There seems to be a recognition that search is very powerful, that it’s a tool that shouldn’t be ignored under any circumstances, but that it's not getting the entire job done. Bryan, I wonder if you could respond to that. What else needs to happen in order for these people to get what they need?

Burdick: The short answer is they just need to come to ZoomInfo.com. Seriously, I don’t think it’s a matter of needing more information, but, in some cases, finding better information. When you think about the traditional search engines -- the Googles and the Yahoos! of the world -- there are so many consumer-oriented search transactions on a day-to-day basis that they have optimized their experience with the consumer in mind.

Search engines like ZoomInfo and some of the other business-information search engines are taking a different approach and optimizing the search experience, and therefore the relevance of the results, with the business-information searcher in mind. You can much more efficiently and quickly get to the information you're looking for.

The simple example that I like to use is that if you search for "enterprise routers" on Google, you are going to get 32 million results that will include everything from Enterprise Rent-A-Car to the latest episodes of Star Trek. Search for that on a business search engine like ZoomInfo and you'll get 150 companies that sell enterprise routers or manufacture enterprise routers. It just becomes a much more efficient process.

Gardner: Well, even the alternatives cited in this survey are still very general. There was Business.com and Thomas Register. This is every good under the sun. It might as well be a general search. KnowledgeStorm was also mentioned, but it's very specific to IT. It seems like there’s a whole category that needs to be filled here around vertical business search.

Burdick: The original survey that Enquiro did for us in 2004 was a key factor in our decision to move to more of a search-engine model, because what we see happening is the same kind of evolution that happened with the big search engines way back. It’s happening now in the vertical-search categories, where search engines started out as directories or, if you think back to Overture in their early days, totally paid listings.

Eventually those two forces came together to provide a best-of-both-worlds situation, where you’ve got not only great relevance on the results, but also great relevance on the targeted ads, and now that’s starting to happen in the verticals as well.

So, you’re starting out with some of the business-directory sites or the business paid-listing sites, because those are easy to do. As the technology gets more sophisticated and you can provide more relevant results for the business information seeker, you are delivering the value that the information seeker is looking for. Plus, you can target the ads better and provide an overall better experience.

Gardner: Let's go back to Gord on that. The survey found a larger percentage of people looked at the organic results on the left, but they were pretty much limited to the top four. A smaller percentage, about 12 or 13 percent, said that they look over to the right-hand side for the ads. That 13 percent might sound small, but compared to a click-through rate in a Web advertising model of usually less than 1 or 2 percent, 13 percent is still a pretty large chunk of people. What’s your impression of the impact of the advertising model in search for B2B activities?

Hotchkiss: Those percentages, by the way, aren’t that different from what we've seen in consumer-based research. Those breaks between organic and sponsored tend to remain fairly consistent across a number of different channels. One thing that’s just golden about search is it will connect a motivated and engaged user with the content they are looking for.

If that content is provided by a relevant ad, then they're open to that. In fact depending on where they are in the buying cycle, they may even be biased toward that, because they are ready to get information from somebody who is trying to provide them what they need to decide whether this is the thing they need to buy.

There's a totally different interaction when you're on a search engine actively engaged in a task and actively looking for information. You're far more receptive to messaging at that point. You're actively looking for it. And this seems to be slowly breaking into the consciousness of most advertisers. They're getting it, but they're getting it slowly. Anyone who moves into the search space, if they do search in a smart way and they capitalize on the potential of it, is just amazed by the return they get on this.

Gardner: Let’s beg a little more from these results than was intended. I started to see in the findings some patterns about typical processes, about how people would go about this activity -- the awareness, the research, the purchasing, and so forth. It seemed to me that there was, on one hand, a pattern of word of mouth that led to a search, that led to a Website, that then led to a refined search based on what they found, which then led to a hand-off to a purchasing activity by maybe a different department or individual.

There also seem to be offline influences, perhaps trades shows, perhaps traditional sales calls and activities, but that also took into consideration word of mouth that then identified what to search on, and so on. Am I reading too much into this, Gord, or were there patterns of process around the use of search in the purchasing activity?

Hotchkiss: It goes back to what I said before. Search tends to be the thing that connects you, as you move through the buying process, and it’s used in different ways and places as you progress through that. As far as identifiable patterns and usage behavior, if you did an end-up study of a large enough dataset, patterns would emerge. They always do emerge, but I'm not sure we would be confident enough diving into this particular dataset to try to tease that out of it.

What we did see is that B2B buying decisions are tremendously complex when they are compared to an individual consumer buying decision, where you have one person going through all the phases. You have multiple individuals influenced by different factors going back and forth.

What is consistent in that is whatever is influencing you -- whether it’s online or offline, a discussion with a colleague or a recommendation by a paid consultant -- there tends to be a mirror activity, in which whatever happens offline generates some kind of online activity that typically is initiated through a search engine. Then, you pull that information back, and it dances back and forth between the online and the offline world.

Gardner: So, there’s a barrier here in some senses. I'm sure most companies, especially the larger ones, have a standard operating procedure about how purchases will happen. It will be form x, y, z, and it will go through process review a, b, c, and then we’ll have to get signatures from individual g, b, h. How can we bridge this value that people see in search, and somehow bake that into a procedural process inside of an enterprise. Or are we asking too much here?

Hotchkiss: One of the interesting things, being both a researcher and a vendor, is we get to see both sides of it. We have access to more information than ever before, and buyers out there are armed with better information before they ever initiate contact with a vendor. They are gathering a lot of information and then they are trying to cram it into an existing buying process, whether that’s an RFP process or whatever.

So, like most things with the Internet, the traditional systems are being challenged by this new access to information that we never had before.

Over the next two to three years, what we're going to see is organizational buying processes being streamlined and being able to incorporate the fact that you have better informed buyers than you may have had before. The whole RFP process was to eliminate risk. The reason was make sure that you are considering alternatives and to make sure that you are almost forced to gather the information you need to make a dispassionate judgment about what was the best choice.

Now, in a lot of cases, the decision is already 80 percent made before the RFP process ever begins. Somebody has researched a vendor, has a very strong feeling about the vendor but now has to try to fit that into the established procedure, and they say, "Okay, now we've got to go out and find two or three more alternatives."

Heaven help the other two or three alternatives that are getting involved in that process. They have to go through the whole dance, but usually the preferred vendor on the front end gets the business on the back end. The other two or three players are just used as negotiating chips to try to get the price down. It’s interesting to watch how information from the Internet is changing virtually everything out there. This is no exception.

Gardner: This might be a little bit out in the future, but the role of search could morph into the role of auction and brokering activities. Does that make sense?

Hotchkiss: Yes, and for players in the space -- I suppose ZoomInfo as well -- if we can streamline the marketplace, if we can take this access to the information and make the buyer’s job easier, that’s a tremendous saving. I would hate to think of the number of man-hours that are invested internally in an organization for a fairly major purchase decision. How much more efficient you can make that process by simply empowering them with the information that they are going out to look for anyway?

Gardner: Bryan, you said that the Enquiro survey in 2004 made an impact on ZoomInfo in terms of its direction. Have the findings from 2007 had a similar influence? What new directions might you be heading in?

Burdick: As Gord had said earlier, the findings in 2007 reinforced what they had already learned three years ago. So, in one sense, it confirmed our own strategic direction as well. We re-launched the ZoomInfo.com site back on April 1, and moved into more of a traditional search-engine model, where all of the content, all of the search capabilities on ZoomInfo.com are free and subsidized by advertising.

We’ve seen that piece of our business take off like crazy in the last couple of months. Search traffic has grown dramatically. We’re up to close to 5 million unique visitors a month doing about 16 or 17 million searches a month on our site. All that is really driven by this need, this desire, among B2B buyers to find a more efficient process to get at this type of buying information.

Gardner: What advice would you have for those folks that are on the selling side of this? What should they do to position themselves in order to take better advantage of what’s occurring on the buyer side, particularly, in their use of search?

Burdick: There are a couple of landmines or traps to avoid. The first is to try to avoid competing with the consumer brands, either on the traditional engines or with the same types of keywords. If you are buying the same keyword as a consumer brand is buying on one of the traditional engines, you are typically going to get drowned out by the noise.

The other thing is to make sure that your own search marketing is coordinated with channel partners. I’ve seen lots of examples where the manufacturer is buying a set of key words and their value-added resellers are buying the same keywords. They end up bidding up the same keywords just to attract the same eyeballs. At the end of the day, the manufacturer is going to direct them to one of the resellers anyway.

Gardner: So that leads to confusion, rather than streamlining that particular process.

Burdick: Exactly. The other key thing, which we already touched on, is leveraging not only on the marketing side, but the search-engine optimization of your site in general, and optimizing the search-for-information experience that the buyer has once they get to your site.

Hotchkiss: One thing I would add on a more fundamental note is to make sure that the perspective you are using to evaluate your search strategy is the customer’s perspective and not your internal one. One of the common pitfalls we see is companies get into a bad case of "internal think." They look at everything from their internal perspective, and they are not shifting the looking glass 180 degrees and looking at it from their prospect’s perspective.

It’s amazing how enlightening it can be, when you start looking at what types of sites they are going to. You need to catch their attention, and know what kind of messaging you have to present and what kind of onsite experience you have to present, once you are successful in capturing the click. If you can force yourself to see from that perspective, you're going to do more to improve the effectiveness of your campaign.

Gardner: Well, thanks very much. We’ve been discussing the recent survey by Enquiro Search Solutions. It was Enquiro’s 2007 B2B search survey, and to help understand it better we’ve been joined by Gord Hotchkiss, the president and CEO of Enquiro. Thanks, Gord. Is there anything meaningful in the survey that we didn’t cover and that you think we should?

Hotchkiss: The original release covers the high-level findings. What we're working on now are three follow-up white papers that will be available on the site through the next three to four months. We're going to take each of the three buying roles that a lot of people within the survey fell within -- the economic buyer, the technical buyer, and the user buyer.

We're going to do insight from that particular buyer on how to search more effectively, plod through the process a little bit more, and how those hand-offs happen from role to role. I imagine there are going to be new insights out of that. We're taking different slices of the data. So, for those of you who are interested in that, keep checking out on Enquiro.com and we’ll ping you as those white papers become available.

Gardner: Terrific. And we’ve also been joined by Bryan Burdick, the chief operating officer at ZoomInfo. Is there anything that you’d like to cap the discussion with, Bryan?

Burdick: Only that I think from a vertical business information search perspective, that we’re really in the first inning here. A lot of interesting trends and enhancements are going to be coming down the road. One in particular that may have an influence in the next year or two is the community aspect within the search.

Gord, talked earlier about how there are multiple people that influence the B2B buying decision. I think that you’ll start to see a marriage of, not only B2B search, but also online community and a factoring into that whole process. Then, who knows where we’ll go from there? But I appreciate you having us on.

Gardner: I suppose that this notion of word of mouth being so important in shaping people’s direction that you might use search to find the word of mouth.

Burdick: Right, the word of community.

Gardner: There it is. Okay, well thank you, Bryan. This is Dana Gardner, principal analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for joining.

Listen to the podcast here. Watch the video here. Sponsor: ZoomInfo.

Transcript of Dana Gardner’s BriefingsDirect podcast on B2B search usage, trends and future direction. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Transcript of BriefingsDirect Podcast on Future Trends in Search and Advertising

Edited transcript of BriefingsDirect[TM] podcast with Dana Gardner, recorded Jan. 23, 2007.

Podcast sponsor: ZoomInfo.

Listen to the podcast here.

Listeners of this podcast are invited to learn more about B2B advertising opportunities with ZoomInfo. Just go to www.zoominfo.com/adpodcast to learn how Zoominfo's business search portal provides a rich online B2B advertising opportunity.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to a sponsored BriefingsDirect Podcast. Today’s discussion focuses on the future of search and search marketing; and how businesses, corporations, companies, marketers, can better avail themselves of the tools that are now available through search.

We'll discuss the incredible power that’s now being leveraged through access to people’s information, company’s information, market collateral and data -- a rich trove of information. Now is the time to figure out the best way to approach it and to leverage it.

Joining us on this call are an analyst and an executive from ZoomInfo. Let me introduce Shar VanBoskirk, a senior analyst at Forrester Research. Welcome to the show, Shar.

Shar VanBoskirk: Hi, Dana. Thanks so much for having me.

Gardner: Also Bryan Burdick, chief operating officer at ZoomInfo. Welcome, Bryan.

Bryan Burdick: Thanks, Dana. Thanks for having me.

Gardner: We want to look at where we are, but, more important, where we’re going with this whole notion of search as applied to marketing and business -- getting things done in a new and innovative way. I suppose that in order to know where you’re going, you have to have a strong sense of where you are. I’ll throw this out to either of you. What is the state of search marketing, and how did we get to this point? I’m principally interested in business drivers and technology drivers. What has gotten us to this point of where people are starting to look at search for business purposes?

VanBoskirk: I can start off. I’ll just weigh in by saying that what has made search so popular today is that it's proven both very effective at getting users to take action, and very effective at giving marketers a way to measure their effect on advertising and consumers. If we look at the history of the interactive medium specifically, around 1999 advertisers were really looking for the next big thing. They had gotten a good result and a good return from display ads, but no one was very clear about what was the sweet spot of the online channel. Overture had a couple of attempts with some paid search ads, and the people who gave it a try realized that they could put some money in and see some immediate returns. That's the kind of cost effectiveness that has lead to the boom that we see today in search marketing.

Gardner: Overture is part of…

VanBoskirk: Now part of Yahoo!

Burdick: I agree with that, and also would add to it that one of the business-model effects of search engine marketing is the ability to very cost effectively try new things. You can try new keywords, see how they work, get immediate response, understand the ROI, do more of what works, and try new things along the way.

Gardner: So, it seems that advertising online and in all the other modalities and channels for advertising often required a gut instinct as to what was going to work and what wasn’t. You could see what went in at one end and you could just look at the results, but figuring out how they came together was sort of guesswork. It seems to me that search, using contextual ads and keywords, removes the guesswork and it gives you clarity and visibility into the thought process that brings people from research to an actual business decision. Does that make sense?

Burdick: It really does, and it also really shortens the time cycle of that whole process. You can try keywords and paid-placement advertisings on Google or Yahoo!, or wherever, today and get results literally in a day, sometimes even in hours, depending on the overall volume.

VanBoskirk: I think search works, because it catches people at the point where they are raising their hand for information and for marketing messages. So, the guesswork of advertising that search doesn’t apply to was always assuming, "Hey, maybe my user is interested in my product or if I catch them at this time, it looks like they might be really responsive." Search took all that guesswork away, because it basically said, "I, as a user, am actively searching for more information about something I’m interested in. If you, Mister Advertiser, can actually give me the information that I want, I’m going to respond to that."

Gardner: When we think of search, we often think about people looking for maybe medical information. "I’ve got a wart on my hand. How do I get rid of it?" or "How do I get rid of the fleas on my dog?" -- consumer research and questions. I think more and more we’re seeing search being used for real business research. People could have $20 million or $30 million budgets and be looking for procurement efficiencies and new avenues for finding products, services, personnel, partners, and ecologies. How does this translate into business? Did the consumer use lead to the business use, and is business catching up? Is that what’s going on?

Burdick: We’re definitely starting to see some of those trends. Consumer advertisers were certainly the first to adopt, and jumped on to the search-engine marketing and advertising bandwagon. In a lot of ways, it goes back to their ability -- as Shar was just saying -- to present a very targeted message, and get an immediate response and ROI, whereas the B2B sales cycle tends to be longer.

As the model is proven out on the consumer side, B2B advertisers are starting to find ways to leverage those same technologies and those same avenues. New avenues are developing. We see new vertical search engines that are really targeting the business consumer or the "prosumer," as the case may be, and delivering even more targeted results to the B2B searcher.

Gardner: I suppose companies think of this in two ways. One being, "I want to use search to improve how I gather information, research, do business, find partners, and find suppliers." But they're also saying "I want all the people who are looking for my goods and services to be able to better find me." What should companies be doing now in order to be better found?

VanBoskirk: The fact is that 71 percent of users are using search engines to find Websites. So, thinking about your question of which came first, the business need or the consumer behavior, I think the answer is that we’re all users of the Web. Whether we’re using it for personal or business reasons, search has become just a natural way for us to begin finding information. What that has led to then is a need to capitalize on that behavior, whether you are a B2C marketer or B2B marketer. There are similar best practices for both.

I always tell marketer clients to think first about their natural search engine optimizations. So, really they should be thinking, "Is the content on my site related to the searches that my users are doing for me, and is it presented in a way that’s easy for Web crawlers to get around?" That’s work that, if you do it once, can pay off for you for years to come.

Then, you can think about some paid search ads that might be really related to the specific, more timely searches or the specific offers and timed programs that you might be running. They should think of all within this notion of, "Who is my user? What are they looking for from me? What is the language that they’re using to conduct that search or to find that information?" You need to understand who those users are, how you can optimize your site to meet their needs, and then look at the paid search ads. It’s the same best practice that works for either a consumer or a B2B marketer.

Gardner: I suppose a consumer doesn't need to have a presence on the Web in order to use it, whereas for a business, their presence, and the amount of content, trackable media, and information that they put out is what’s going to help them get into this mode of being a part of online commerce.

VanBoskirk: That’s an interesting question, because we’re seeing a lot more consumer-generated content appearing in search engines. While it’s true that you have to have some sort of Web presence to appear in search results, what you have to do to create a Web presence is much different today then it was even a year ago. You might actually have information that is about one consumer talking to another consumer about a product, as opposed to that product’s Web page appearing as the most relevant search result in a search results page.

Burdick: That raises the ante for businesses that need to control brand image across the Web, and need to control their digital image. It’s not just about what goes up on their own Website, but, as Shar was saying, it’s about what the blogs are saying. It’s about what the press is saying. It’s about what review sites are saying.

As search engines go to the next generation and do things like semantic search, like we’re doing here at ZoomInfo, we actually are able to aggregate that content across these entities and pull together a complete picture of people and companies. That same technology will start to apply to other entities and other search engines down the road.

Gardner: So, whether I’m a business buyer or a consumer, when I do a search on "buggy whips," I’m not just going to see results from Acme Buggy Whips Co., I’m going to see chats and blogs and all the information about the state of buggy whips.

Burdick: Right, and it will move from buggy whips as a keyword to buggy whips as a concept or entity. A great example that I like to use is, if I search for "enterprise router" on one of the traditional consumer search engines, I’m going to get lots and lots of results. They will include everything from Enterprise Rent-a-Car to the latest episodes of Star Trek, including a lot of results about enterprise routers. They’re looking at those as keywords versus a more semantic search that understands that an enterprise router is a product. "Here are the companies that sell enterprise routers" is the kind of result you get from a semantic engine like ZoomInfo.

Gardner: So, the search can be better for me if it knows that I’m a business user in a business mode.

Burdick: Exactly. Again, "router" is a great example. If I search for "router," as a consumer I might be interested in a woodworking tool, but if I’m doing it for my business perspective, I’m clearly interested in networking connectivity or the like.

VanBoskirk: Bryan is touching on the next phase of search and the next phase of search marketing that a lot of marketers haven’t yet prepared for. If we look at the most sophisticated marketers today, they’re very good at understanding the broad suite of keywords that they need. They’re probably purchasing a lot of keywords, and they’re maybe even doing some smart bid management to figure out how much they should be paying for certain keywords, based on the profitability of the traffic that they’re getting from each of those term.

What’s next is this notion that Bryan’s talking about around creating an increased relevancy in the results. It’s not determined by some sort of magic algorithm that counts how many mentions of a word are on a page or how many links are linked to that page. It has a bit of a learning embedded in it.

It can understand that if this user has searched for these things in the past, we know that this is the type of user they are, or other people have found satisfying results from these types of searches or these types of results. We know that they’re going to be the most relevant for people who are just like them. There’s a lot of evolution that’s happening that we're going to see evolving in 2007 around figuring out how to increase the relevance of search results.

Gardner: I suppose for consumers there is generally some reluctance to put too much personal information out there that might help them in their searches, but might have detrimental effects otherwise. For businesses, that are in business mode, they might be a little bit more willing, and it might be in their best interest to get more information out there about what kind of business they are, what sort of activities they’re involved with, what their direction is. Is that what you’re alluding to, that the companies can start sharing more information, and therefore empower search and marketing through search among and between different businesses?

VanBoskirk: Sure, the most important information is less personally identifiable information and more relevant information about the types of searches you’ve done. It might be just a catalog of the history of your searches. On some of the social search sites you can actually vote or tag pages that have answered a need for you in a past search. So, on del.icio.us, which is a part of Yahoo! you can actually tag pages that you feel are related to a search. Go back to the example of enterprise routers. I do that search. I find a couple of results pages that are really going to meet my needs. I tag them "business routers," but then I do another search that has something to do with my "Star Trek" interest and I tag those pages "Star Trek."

Now, I’ve got them cataloged in my own del.icio.us page, and somebody else who wants to use del.icio.us can view my tags and realize, "Hey, this is someone who likes Star Trek. I’m going to check out the pages she found that were related to her interest in that particular topic." It’s less about actually giving up personal information about you as a searcher and more about just being willing to share the searches that you’ve done, and even voting for pages that you felt like were relevant answers to your question.

Gardner: So, either voluntarily, or as part of the process, we’re creating a layer of metadata on top of the search activities that then makes the next search activities even richer and more powerful.

VanBoskirk: Exactly.

Gardner: One of the things that’s interesting to me about this business approach for the future of search in marketing is that it’s not just for the big subjects. It can be for something extremely specific.

For example, suppose I’m an engineer designing a cell phone, and there is an integrated circuit that I just want for a very specific task on a very tiny circuit board I’m designing. If I want to make sure that it’s a supplier that’s trusted and so forth, I can do a very discrete search on the SKU, on the actual number of the circuit, almost like taking a serial or model number and then finding out who’s got them and where. This could be very discrete in terms of how search can aid commerce. Is that sort of a long-tail effect we should expect?

Burdick: Definitely. In fact, the search engine marketing space has evolved, as both advertisers and searchers have gotten more sophisticated, and that long tail has continued to get longer and longer.

The other thing that it’s driven is the proliferation of more vertical search engines, because it's relatively simple for somebody who’s developed a new search capability to drive into a particular vertical and start to monetize that right away. With the different ad networks that exist out there, even if you haven’t put together an ad sales force on your own, you could put Google AdSense or one of these other networks up on your site very quickly and start to monetize that. This is going to drive more people to have more niche sites available for the targeted search needs.

Gardner: It sounds like this could hypothetically scale down to a single buyer in the world and a single seller actually finding each other.

Burdick: One of the things that Shar and I were actually taking about a couple of weeks ago was: Is there a future where eBay meets Overture, and you actually have classified ads being placed by individuals in a search engine marketing type of a format?

Gardner: Now, let me understand this. If I go out and do a “search,” in a sense I’m also offering an auction saying, "Here is what I’m looking for. Who is ready to bid on it?"

Burdick: Potentially.

Gardner: What do you think of that, Shar?

VanBoskirk: One of the nicest things that search marketing introduces is level playing field for the little guys to compete against the big guys. It provides a way for a small local advertiser to find the customers that are actually engaging in information that they can provide.

Not a lot of other media can do that. You’re limited in how much television you can afford, and there is no way that a small local bank can compete against Citibank. In this case, a small local bank could actually buy more specific keywords for their target audience in their geography than could a large national bank. Why couldn’t an individual seller of apartments available in particular areas, or used equipment, use search as a way to reach out to people who are willing to find their specific product?

Burdick: You’re already starting to see some of that evolution, particularly in the help-wanted space. Companies like Indeed and SimplyHired, and some of the other job-board aggregators, have started to put together pay-per-click models that are driven off the same types of platforms, the same auction-based model as the consumer advertising in the traditional search engines.

Gardner: Let’s take one of the points we made earlier. We have more visibility into what’s actually taking place in this marketing-to-sales activity. Then, we’ve got this long-tail effect, where I don’t need to take an ad out on the super bowl for $2.5 million. I can find my audience for fairly short money. If we combine these two, can’t even very small mom-and-pop shops demonstrate an ROI for an advertising or marketing approach on the Internet, even if we’re only talking about a few hundred dollars? Is it that granular?

VanBoskirk: It could be. We haven’t seen a real solid local effort from any of the big players. Google and Yahoo! have been really working to develop a local presence and local set of marketing services for individual local advertisers. I don’t think it’s quite there, but as we see smaller search engines unfold, they may be more niche focused on a particular type of user or on a particular vertical or industry.

Also, as we start to have mobile search unfold, where I’m traveling through a certain area and I’m searching for information, we’re going to start to see local opportunities play out in a bigger way for some of these mom-and-pop advertisers. They can purchase keywords on national search engines today, but the commerce opportunity may be more difficult for them. If I’m in San Francisco and I see a paid search ad for a regional restaurant in Boston, they may show me the ad, but they’re probably not going to get my business.

Gardner: So, it's a waste of time and waste of money.

VanBoskirk: This year we’re going to see some more opportunities that will actually help realize that local opportunity for the local advertiser better than it has been to date.

Gardner: Another major trend is globalization. While there’s local commerce that might aid and abet certain business, there are other businesses that are happy to be expanding their potential market to anywhere, anybody that can find me. I can put it on a UPS or a FedEx truck and it’s off, out my front door and it’s in your front door two days later. Is this business opportunity and a long tail and globalization somehow related?

Burdick: I think that it is. In the B2B world, where you’re really not trying to reach a local consumer, you’re trying to do business anywhere in the country or the world. As different vertical search engines evolve and create more targeted inventory, those companies are going to be able to better leverage the keywords in those vertical search engines, versus competing for the same keyword in the consumer engines, where they're competing with the consumer advertisers.

Gardner: Because they’re doing this through search and contextual ads, they’ve got more visibility. They can say, "Wow, I just spent a $1,000 on keywords, but I generated $4,000 in new business from customers that I never knew existed."

Burdick: The model will be slightly different in the B2B space than it has been in the consumer space. The consumer space really is about direct marketing, it’s about driving a transaction. I’m Circuit City. I buy the keyword "DVD player." I’m trying to sell a DVD player. In the B2B space, there will be some of that, but it’s largely going to be more lead generation. I’m looking for somebody who is interested in the product category that I’m trying to sell.

I’m trying to bring them in as a lead, send them more information, and not necessarily close a transaction online right then and there. You’re also going to find that the number of searches, done in the B2B space are smaller in terms of total number of transactions, but the transaction value is a lot larger.

So, I think as B2B -- and Shar, you might have some numbers around this -- but as the B2B advertisers move online, the opportunity is actually bigger in the B2B space. A smaller number of transactions, but bigger dollars per transaction.

VanBoskirk: I can chime in too with some stats to support that. We know that 46 percent of B2B marketers use search engines during the awareness phase of their purchase process. If you think of the purchase funnel going "awareness - consideration - preference - purchase," consumers typically use search engines in the consideration phase. I already know what I want and I’m just going out to compare one provider to another. Or, I’m going out to do a little bit more research around price and features.

In the B2B environment, people are engaging with search engines before they have even created their shortlist. They’re actually using search engines to help them decide who they should be conducting additional research with, and then that research could happen online, through a sales call, or through any kind of the regular in-person sales channels that a business marketer might leverage.

Not only is the opportunity for the end transaction greater in a B2B environment, but it exploits the channel more completely. It’s not just relying on, "I’m researching the product, get me while I’m doing that and get me to buy," it’s actually using the medium to brand a company and introduce a new brand into a market. It’s using the medium to provide information and help a user research the product.

It may even be using the medium to qualify users. They’re actually going to be able to determine, "Is this the person making the decision on the product, or is this just the person who is the research assistant doing a little bit of the homework to pass on the info to their boss who’s actually the one buying the product.

Gardner: So, we’re really automating a marketplace regardless of geography, regardless of budget. We’re really matching up buyers and sellers, but with this much more powerful insight into when they show up and what caliber of seller are they. Do you want to put a sales person on this call or not, or do you just want to zap them a brochure URL of some kind? This is really almost an extension of what we’ve know as commerce. Right?

VanBoskirk: The risky thing in taking that perspective is that search engines are still, first of all, a tool for finding information. We can’t completely turn them into a marketplace, because consumers are pretty savvy these days too, and they know that they’re being used as a marketing audience when they’re conducting searches. They’re also aware of declining value in search results. The more ads they see or the more they feel like they’re being promoted to, the less relevant they feel like the results are.

The caution kind of lands on the marketer to understand that this is an extremely valuable medium for reaching very targeted customers, but that they have to actually facilitate the user accomplishing their goals, to get them the information they need. If that’s to provide information or if it’s enable a purchase, both are valid user goals that the marketer sometimes doesn't want to acknowledge. They’re focused on purchase. We have to hang on to this notion that the search engine is still a user tool for finding information. It's not just a marketplace between buyers and sellers.

Burdick: That actually points to a really interesting evolution that we’ve seen particularly in paid-placement ads. When you think back to 1999 or 2000, when Goto, now Overture, was just rolling out, and others started adopting this paid-placement model, there was huge uproar about "How could you put sponsored links above natural organic search results and the relevance of those?"

Overture, Google, and the others were really smart about saying, "We’re going to make sure that these advertisers, these sponsored links, are relevant to the user." Now, you actually find that for certain types of searches people view those ads as the most relevant results -- "That’s exactly what I was looking for." Shar points out that advertisers need to be careful not to go too far the other way on that.

Gardner: So trust is an essential ingredient or people won’t go back for more. It won’t become a marketplace. It will be gamed. It will be jaded. Now, we’ve seen many attempts at gaming these systems already. Is there a necessary "Switzerland" of B2B online commerce that can, in a sense, protect and provide some neutrality to the goal of this commerce, and therefore be trusted by both the buyers and sellers?

VanBoskirk: A part of that is the focus on increasing relevance that we were talking about earlier. Google will maintain that its goal is to organize the Web and to continue to always focus on providing user relevance. It does that now through kind of a formula of figuring out which sites are the most related to keyword searches that are being done. But, there are a lot of other ways to add relevance.

Bryan was talking about what ZoomInfo is doing around creating entities and some intelligence around what is actually meant by the search. There are also a lot of these tagging and voting technologies, understanding who is searching for the same type of information.

Rather than thinking about a board, if you will, that will determine who is trustworthy and who is not, that community of searchers will weed out the folks who are just not generating relevance for them. They will force search engines, like they are with the big guys, Google and Yahoo!, to reevaluate what they’re doing to determine relevance. If the big guys can’t adjust to it, then a lot of smaller search engines are going to come into mainstream use, simply because the results that they provide are going to be a lot more relevant. It will be the user community that determines that, rather than an entity on high that kind of establishes, "These are the good guys -- these are the bad guys."

Burdick: The whole premise of search engine marketing is that the market forces are so efficient to begin with that they will weed out the wheat from the chaff very quickly.

Gardner: Okay, so we’ll have a market force that can help segment search into different niches for B2B relevancy, and we’ll have a self-monitoring effect in that people won’t get burned twice, and they know how to exercise and vote with their attention, with their dollar, with their business. So, what’s the opportunity for a company like ZoomInfo? How do you enter into this with a preferred business search and marketing capability. What’s the secret sauce that you have?

Burdick: Our secret sauce is actually this semantic search model that I was talking about before. In one sense we're similar to regular search engines in that we have crawlers and spiders that go out on the Web and find information. But, then we’ve got a series of about 15,000 different natural-language processing (NLP) algorithms that can understand the content and then create relationships between the entities, even relationships that aren’t explicitly stated anywhere on the Web.

A simple example would be, we know that this person is the CEO of ZoomInfo. We know that ZoomInfo is located in Waltham, Mass. Therefore, we know that this guy works in Waltham, Mass., even though that content was never stated anywhere. That’s a simple example of what we mean by semantic search that allows us to create these connections between entities.

The net result of that is when you come into something like the zoomlist.com, which is our preliminary company search product on the Web. You can do a search for "venture capital," find all 2,800 companies in the U.S. that are in the venture capital business, and it automatically creates drill downs into different types of venture capital. Were you interested in life sciences or technology or different branches of venture capital, the search engine and the algorithms completely, automatically drive all of that. There’s no human involvement in creating those links.

Gardner: So, a lot more context around what's going on, taking advantage of what metadata and other inference materials are available. Shar, where do you think this can go? What would be the next steps in the evolution of this B2B, Internet-based and search-based marketing?

VanBoskirk: We’ve talked a lot about the relevance need, and this is poised squarely in that. We’re going to see a lot of change this year, just in the name of helping to refine search engine results. Most users are feeling like it’s almost too much now to search the entire Web. I don’t really need the entire available universe of information. What I need is an answer to my question. It’s almost as if the search engine becomes a bit of a concierge, and the Zoom model is poised very well for that.

We’re also going to see an exploration of other media, and how search can help catalogue information that’s available in other media. Bryan and I were talking about this a couple of weeks ago, as well. The mobile opportunity for search is poised to take off this year.

We see a lot of helpful examples in that space too. I might be doing a mobile search, and I’m looking for Bank of America ATMs, when I’m traveling somewhere, and I get an ad for a Wells Fargo ATM. That's a keyword-based ad that they’ve purchased that’s just like you would place on a online search, but it’s related to the mobile search that I provided.

So the next place for Zoom and for any search engine is to think about what happens beyond the Web. Are there ways that the same sort of search capability can move into other media that also needs the same functionality, the same type of cataloging and information provided back? Why not extend the kinds of information searches that we’re doing on the Web into other media that we’re using just as actively.

Gardner: What would be some other examples of media that a company might be able to bring into this to add even more context, to make them a richer source of information and therefore a contextual relationship through search?

VanBoskirk: A couple of thoughts come immediately. Mobile is here now. We also see RSS content being searched and being used as place-to-place contextual ads.

Gardner: You mean like podcasts?

VanBoskirk: Podcasts, RSS feeds, if you’re getting actual text content delivered to you. I think television is the next logical place for search to go. That one’s not here yet, but as people start to store digital files of video on their cable boxes or on their digital video recorders, we’re going to want to search that information. So, there will be another kind of catalogue that will evolve, where we can search information. Why not allow that to be sponsored and have paid search ads that are adjacent to the video content you’re storing as well.

Gardner: So, more opportunity to bring rich content into this mix that can help provide a richer contextual binding of interest, between perhaps buyers and sellers in a B2B sense or even just discovery, just information.

VanBoskirk: Sure.

Gardner: Very interesting. Well, thanks. We’ve run out of time. We’ve had a very enjoyable and deep discussion about the future and some of the implications for search and marketing and B2B, and how B2C is morphing and providing some tools to business. Joining us on this discussion we’ve had Shar VanBoskirk, a senior analyst at Forrester Research. Thanks for joining, Shar.

VanBoskirk: Thanks very much, Dana.

Gardner: Also Bryan Burdick, he is the chief operating officer at ZoomInfo. Thanks, Bryan.

Burdick: Thanks, Dana. This was great.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to a sponsored BriefingsDirect Podcast. Thanks for listening.

Listeners of this podcast are invited to learn more about B2B advertising opportunities with ZoomInfo. Just go to www.zoominfo.com/adpodcast to learn how Zoominfo's business search portal provides a rich online B2B advertising opportunity.

Listen to the podcast here.

Podcast sponsor: ZoomInfo.

Transcript of Dana Gardner’s BriefingsDirect podcast on future trends in search and advertising. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Transcript of BriefingsDirect Podcast on Business Webs and Relationships-Oriented Business Search

Edited transcript of BriefingsDirect[TM] podcast on Business Webs and search with host Dana Gardner, recorded Jan. 9, 2007.

Listen to the podcast here. Sponsor: Zoom Information Inc.

SPECIAL OFFER: Listeners of this podcast are invited to try ZoomInfo's Business Web search and discovery benefits through a special free-trial offer. Just go to www.zoominfo.com/businesswebpodcast to obtain free access to Zoominfo's advanced business search capabilities.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, a sponsored podcast discussion on the burgeoning "Business Web," the concept around how companies and commerce-focused organizations can discover one another and create partnerships, relationships, and alliances.

In doing so, they can exploit and leverage the search technologies around the Semantic Web and around the new opportunity for discovery of assets, resources and tacit knowledge. Joining us to discuss this is a representative from Zoom Information Inc., Russ Glass. He is the vice president of product and marketing at ZoomInfo. Welcome to the show, Russ.

Russ Glass: Thanks for having me.

Gardner: Also joining is John Blossom, president of Shore Communications and a noted analyst covering these topics. Thanks for joining us, John.

John Blossom: Thank you, Dana.

Gardner: Search has been around for a number of years. It’s been used for many -- I suppose you could say -- pedestrian purposes, and has increasingly been focused on business. But business relationships and finding partners is as old as business itself. Finding the right partners can make or break an activity, a go-to-market, an innovation, and any new process that’s brought to the market.

Now, we’re starting to bring these things together, perhaps a "Reese’s Cup" moment -- chocolate and peanut butter, if you will -- a whole greater than the sum of the parts. This seems to be particularly relevant now because we’re entering this Web 3.0 era, where semantic information is more readily available, and context scales massively, but also scales down to the long-tail or micro niches.

So, we want to talk about the need for aggregation, the fact that there is just a tremendous amount of information, even an overload, given what search is capable of. We also want to explore how this new semantic opportunity and how business relationships and the Business Web can be brought to bear on overload and discovery.

I want to start with you, John. Could you help us understand just how large this ocean is that we’re roiling about in with search. What is the need for aggregation, context, or pertinence when it comes to this huge trove of disparate business information that it is now available through the Web?

Blossom: Sure thing, Dana. The Internet as everybody knows is a growing database of information, accessible globally. We used to measure things in megabytes and gigabytes, then terabytes, then petabytes and exabytes. Basically, we just keep on putting the zeroes behind the ones, and we have untold quantities of information that are being produced every day around the world and are being published on the open Web.

What’s happening in today’s environment though is that businesses are getting much more intelligent about how they use the Web to present themselves as not just companies with shareware sites, but as publishers that provide in-depth information about their activities.

At the same time, individuals in business are learning how to expose themselves through that instrument also. Why did they bother? Well, our research shows that most people in business start on the open Web when they’re trying to solve a business problem and find business information, as opposed to going to internal subscription services. Certainly, subscription content is still a very important part of the equation, but many people, knowing that companies are out there publishing information on the Web, are going out to search engines to find the answers to their business questions.

So, search engines have become a natural first point for not just Googling individuals to find general information or haphazard information, but to solve real, specific business and sales problems in the process. In today’s environment, with so much information being published by individuals and institutions, search engines don’t necessarily provide the level of filtering that the average businessperson needs to be able to do solve problems effectively.

Gardner: All right, let’s move to Russ. Russ, it's a given that search is become a front-end for more and more business activities. When we’re thinking about exploring new opportunities in different markets, partnerships -- and given that more and more companies are in fact partnering and aligning themselves -- what can be brought to this opportunity and how can we then at the same time solve this overload issue?

Glass: When John talked about how much information is on the Web and how fast it’s growing, he nailed it right on the head. John Battelle calls it the "Database of Intentions." where the Web is now this huge repository for what companies are doing, what partnerships they’re signing up, who works within different companies, what industries they’ve worked in in the past, where they went to school, etc. If there was a way to tie all that together in an efficient manner and with a search interface that made sense for the business user, there’s tremendous value to get out of it.

At ZoomInfo, we’ve got a product called PowerSearch, which is essentially the front-end interface that’s targeted to the business user to be able to pull out these intentions: who’s working with whom, what are they trying to accomplish, how can I discover markets to use in my day to day business life?

Gardner: So, it really isn’t just about businesses. It’s about individuals, because businesses are composed of people. I might be dating myself here, but there was this time when your Rolodex was your standard. How good your Rolodex was indicated how good you were at partnerships and relationships and what your past business history was. That’s now given away to the Web, but again we hit overload. What’s being done technically to align business user needs with some an automated approach? In a general sense, are we talking about crawling, and is it traditional, or do we have to go a step further technically in order to accomplish this notion of a Business Web?

Glass: We need to go a step further. Obviously, crawling is a starting point for all search engines. You have to have a mechanism to get out there and actually find the information, but it’s not just enough to say, “Oh, these keywords exists out there.” For example, my name, Russell Glass, is actually two keywords in the eyes of the search engine, when Russell Glass is really an entity. I’m a person. You have to take that level of understanding beyond just crawling, to be able to say that I’m a person, I have certain attachments, I belong to certain organizations, I’ve worked for certain companies.

I have all these characteristics when you really get to semantics, the Semantic Web side of this. I have all this metadata, if you want to call it that, from a technical standpoint, which defines who I am. The next step for search is really to understand that metadata and use that to create a more useful and filtered experience for a business user. For example, if I am looking for people within a certain industry -- let’s say the healthcare industry -- I need to be able to tell that search engine that the results I want are people, and those people have to work within the healthcare industry. That search engine has to be a lot smarter than just bringing back certain keywords that are found out there on the Web.

Blossom: That’s a key point, and what you’re pointing out from my perspective, Russ, is that for many years people were talking about the Semantic Web and the need for metadata, so people will be able to do these kinds of searches. But the Web is not self-organizing in the way that it’s published. The information is out there and it can be extracted, but people are not publishing content with that structure in mind.

The technologies that are becoming more prevalent in this era, and that sometimes get bucketed into the label "Web 3.0," are about being able to extract that semantic structure from content that’s been published without semantics in mind. They provide the hooks that will allow specialized searches to go out there and provide semantic structure across a wide range of information, regardless of how it was initially published.

Gardner: John, let’s take a step back for a moment, and for our listeners benefit, give them a timeline of Web 1, Web 2 and Web 3. I’ll start with a very broad overview. Web1 was HTML content, pretty straightforward and basically a push, it was just, "Here’s a brochure" type of affair.

Web 2.0 is characterized a lot by relationships and user content discussion, give and take, bringing this more to the level of a village, but with massive scale but also massive niche or long-tail opportunity.

Help us explain now this next progression to Web 3.0, what do you mean by "semantic" and "Web," and what sort of tools can be brought in this newer era to align business interests and cut to the wheat and get rid of the chaff.

Blossom: It’s always dangerous to use labels like Web 3.0, especially when it’s so vague and undefined that Wikipedia has locked down the page for Web 3.0, and won’t even allow people to make an entry on it. What I think we can say safely is that everything old is becoming new again, through the advancement of technology on the Web. If you think of pre-Web information services, they were oriented around databases. Those databases were highly structured and you had indexes and needed specific words to be able to organize records in that database.

Gardner: You practically had to be a developer to know how to approach the database to get basic information?

Blossom: Absolutely. If you look at some of the interfaces that were available in early information products, such as Dialog and other databases of that sort, with a virtual programming language unto itself just to do a simple query. Then, along comes the Web, and what's now termed Web 2.0, and people said, “Well, let’s just not worry about structure too much, let’s put the information out there." There is enough intelligence in search engines for us to be able to find stuff that’s been pushed out there on the Web.

It was a huge step forward, when the search engines provided the ability for information to be aggregated in new ways without the structure of a database, but on a rather ad-hoc basis. Sometimes it was guided by popularity and sometimes by semantic structure, but whatever the combination, information was more easily aggregated from any number of sources regardless, of its structure.

Web 2.0 is probably best described as the read/write Web, where there is an increasing proportion of content that’s being pushed out by individuals as opposed to institutions. We have a broader mix of sources and a broader mix of information going out from a range of publishers. It has some default structure in it because of the standards that are being applied, but it’s still fairly loose information.

Gardner: At least those individuals are not only contributing content, but they also, in a sense, contribute ranking opportunity by voting with their attention, with their activity, and with their links, which information is relevant, and this helps codify into some categorization.

Blossom: Exactly, and the ability for people to be able to build up webs of links, to be able to indicate what’s important, provides a level of importance to semantics. That begins to highlight information more effectively to people, when they’re trying to figure out what’s relevant in a trendy topic.

Gardner: If it works for finding people who are interested in your baseball collection, your baseball card collection, then it might also help in putting together your business community or ecology as well.

Blossom: Absolutely. Business publications and corporations are all beginning to latch onto this idea and to use Web 2.0-style publishing to be able to reach people. We have individuals out there in business with Weblogs. We have CEO’s with Weblogs. We have PR departments with Weblogs. Everybody is pushing out and trying to engage the world in a conversation. Now, with all that information out there, the question is how we structure it. What we’re beginning to see in the Web environment is the use of more sophisticated content extraction technologies and analytics to be able to take those relationships and to present them more effectively to information systems.

So, to bring it back to what I was saying originally, we’ve gone back to trying to provide structure in our information, but with a much more sophisticated publishing environment than people used to have in standalone databases. Now, in effect, the entire Web has become a database because of the ability to structure information on the fly.

Gardner: Okay, so the best of the old and the best of the new. Russ, you’re in the position now of creating product and then bringing that product to market at ZoomInfo. What is it about this next step of the best of the old and the new that is exciting to you as a search product developer?

Glass: John made a key point -- when he was talking about how Web 2.0 was driven by the individual -- moving from totally unstructured information to a world where now users can start to give feedback. Businesses have started to follow the individuals' lead to Web 2.0, but they have then taken the next step because all that information is useful to a business only if it’s structured and if it can be efficiently incorporated into the business environment.

Businesses are really leading the drive toward these "Web 3.0" technologies, moving from unstructured to structured information. As a product guy in this space, that’s what excites me, because I think that companies like ZoomInfo, which are focused on semantic technologies, are going to find the most success in the business world in the short term, because the ROI is there. Businesses can make tremendous amounts of money in both the cost side and the top line by aggregating this information and using it effectively.

Gardner: It seems to me that this notion of a Business Web isn't really, "Let’s build it, and see who’ll come." This is really business responding to an opportunity, recognizing that they have need of finding an audience, of finding channels, of finding partnership, extending into new markets -- globalization. Help me understand the chicken and the egg here when it comes to the Business Web?

Glass: Sure. I don’t think we’re creating the Business Web. I think the Business Web’s already out there. It’s out there in the form of Websites and press releases and SEC filings and blogs and anything else with business content. What we’re doing is taking technology and making all of that information accessible in an efficient way. That’s really the next step, because as we’ve talked about already, there’s just too much information out there to absorb. It’s in too many different repositories, in too many different formats.

When we have something that can tie it all together in a way that makes sense to a business user who can then use it to define markets and find people within those markets and do competitive research on different companies within those markets, etc., that’s where the real value is going to be extracted from the Business Web.

Blossom: It's interesting that the sorts of problems that businesses are trying to solve on the open Web are very similar to the problems that they’re also trying to solve behind the firewall and their intranets and extranets. Even inside corporations, they have created many repositories of different types of information. Being able to unify that effectively with analytics-driven aggregation systems is key for their internal operations. Increasingly, businesses are seeing the open Web as an extension of their business operations. It’s just the matter of which IP routers are you going through to be able to extract business intelligence.

Gardner: Perhaps we have dual track here. On one hand, we’ve got progression toward the Semantic Web, but at the same time inside the firewall, as you point out, we’ve got a long-term progression toward the semantic enterprise. We’ve been using warehousing and mining business intelligence, and a number of other trends over the past 10 or 15 years.

Help me understand, John, how these come together. What is this "whole greater than the sum of the parts," when we apply the semantic enterprise to the Semantic Web?

Blossom: It’s the same problem solved in a different environment, although there are more structured databases inside your typical corporation. With the proliferation of departmental Web servers and Web 2.0 applications within the corporate environment, there’s not a lot of homogeneity in their internal information. When the corporations look out to the external Web, they are more open to the idea of this being a resource that they can use for business purposes, not just because of the tools that are out there, but because they understand this is the same sort of problem that they have had to solve internally.

There’s a greater openness to look at Web information as the same type of resource that they have available on a corporate basis, and they're more open to the idea of being able to transform it into a resource that has semantic structure and usefulness for enterprise-ready applications.

Glass: Think about it from the end user’s perspective. If I’m a businessperson and I need access to information, at the end of the day, I don’t really care where it comes from as long as I know the authority of the source, and as long as I’m able to quickly and efficiently use the information. Just make sure that it’s holistic, that I get as much information about the topics I’m looking for, and that it’s easy and efficient to use.

Blossom: Users in the corporate environment use open Web search engines as their first point to find information. The internal search engines that they have in the corporations are literally competing for attention with those. It only makes sense that those users are going to be very open to more sophisticated resources that are available to them on the Web.

Gardner: I suppose it boils down to, they want to know what they don’t know about what's going on out in the greater business environment.

Blossom: Absolutely. And, the Web itself is becoming the most efficient channel through which to communicate that information. There’s less need for the info-media ways of the past.

Gardner: Let’s drop down from a few thousand feet to the basement and get concrete here. Are there some examples of companies that have gone out -- perhaps beta customers for you at ZoomInfo -- and applied this kind of cutting edge innovative basis and had some payoffs?

Glass: We’ve got on the order of a couple of thousand customers that are using this technology now and getting bigger ROI out of being able to use this information that's just been gathered and display it efficiently from the open Web. Adobe is a good example. They use us within their field sales force. The problem they face is that their field sales are disparate. They look at a lot of different types of companies and a lot of different types of industries that all have different value props for using Adobe products.

A tool like ZoomInfo can define markets and really give a good holistic look at which companies play in a certain market space in a certain location. So, their field sales force has a good understanding of where they can go look for opportunities, all the way down to the specific person within the company -- whether it be the VP of marketing or whoever else would buy Adobe products.

Gardner: So you can take that notion of the Rolodex and just explode it. Not just shooting in the dark, but pinpointing the right people to talk to at the right time in certain companies. That gives you a much better chance of saying, “Aha, you’ve got a problem? I’ve got a solution.”

Glass: It’s a context. It’s understanding. Your Rolodex gives you a name in a company, but if you know that that person makes decisions about certain products, and you know that the person knows someone else that you already have as a customer, it really helps you be able to both warm the call, get yourself in the door, get your foot in the door, and then close the deal.

Gardner: If I'm selling and I find one company that’s a likely candidate for my universe, then I can apply the same criteria and probably come up with a bunch of similar companies, and then come up with an expanding universe of prospects.

Glass: That’s exactly right. It’s kind of like the crystal set. You need that one little crystal to form the entire large crystal. Once you know a single company in a certain area, you can pivot around that company and discover all the other companies that do exactly what that company does.

That’s all because of the way the Web works. Every company is out there trying to describe what they do. Having an intelligent technology that can take the metadata out of that, take the semantics out of that, and understand which companies are actually doing the same things is very powerful for business.

Gardner: I can apply that to sales and marketing prospects, looking for buyers, but I suppose I can apply the same approach of the Business Web to looking for partners, saying, "Here is a company that is doing something close to what I’m doing and there’s a natural affinity. Let me find all the other companies that could also potentially be in a partnership or a symbiotic relationship with me. Then, I'd have a whole new opportunity to expand my universe.

Glass: As we’ve all seen that in the Web and the hi-tech world today, "co-opetition" is the name of the game. You’re competing with companies, and at the same there are great efficiencies to working with them. If anybody has defined that, it’s Google. I don’t know of a single company that doesn’t have some sort of relationship with Google, even if it’s as simple as AdSense or using them to place ads on their content, but at the same time they’re often competing with Google for advertising dollars.

Blossom: What seems to be happening in the midst of this is that the Web is becoming a more effective tool over time to classify businesses than traditional industry classification schemes. The competitors I had three months ago are not necessarily the competitors I’m going to have three months from now -- or even today -- because business changes at the speed of light, as the Internet pumps information around the world and business strategies change on the dime.

In that sort of environment, it becomes more effective to be able to classify companies and individuals through semantics and relationships that are defined through Web content, than to rely exclusively on databases based on long standing industry classifications and formal relationships. Being able to get those webs of competitors and relationships right on the fly requires an environment like the Web, where that information changes every day.

Gardner: John, it seems to me there are some other mega trends that accelerate this. Globalization, we’ve mentioned. It seems that as companies go more to business-process outsourcing -- if they’re looking to employ services oriented architecture and software-as-a-service, it seems that its what wires and connects companies together becomes more important than having it all internal, doing it all yourself. Am I too far out here?

Blossom: Not really. There is a great example that Don Tapscott uses in his new book, Wikinomics. He talks about a gold mining company up in Canada that recognized all of a sudden that they had all sorts of potential deposits of gold, but they had no idea exactly where they were, and they wanted to get at them most efficiently. Their CEO happened to go to a seminar that was talking about open-source software and Linus Torvalds's development of Linux.

He said to himself, “Well, let’s open-source our functions." He put all of their normally secretive information about geology and mineralogy, mineral deposits that were on that property, and he put it out on the open Web and asked people to find the gold. He put out a little reward money. They got input from over 1,000 people, and doubled the yield of that property in just a matter of weeks.

Glass: Wisdom of crowds, right?

Blossom: The wisdom of crowds, which sounds a little bit frightening at times -- and at times it can be -- but the idea that corporations benefit most from wherever today’s most insightful people are at the drop of the hat, pushes people towards Web infrastructure, where they can collect that knowledge and wisdom as efficiently as possible in an open environment. That doesn't necessarily mean that they have business relationships with those people, but being part of that Web is becoming far more important over time than segmenting too much intellectual property behind the firewall.

Gardner: So, it sort of takes the notion of the knowledge economy a step further, that the coin of the realm is information in the right people’s hands at the right time?

Blossom: Absolutely.

Gardner: And search is a very powerful tool to bring that about. Well, great. This has been a good exploration of this notion of the Business Web. I was sort of fuzzy on it, and now I have a much better handle on it. Was there anything else that we needed to bring to the table for people to appreciate business Web? How about when this notion, still nebulous as it is, of Web 3.0 and the Semantic Web? Are we in the fifth or sixth inning of a nine-inning ballgame here, or are we only just in the first few minutes of this in terms of what’s going to be possible in the next few years?

Glass: We’re in the first few minutes. The Business Web and what's happening with tools like ZoomInfo is the first step. You can almost think of the Business Web as a microcosm for what's going to happen to the rest of the Web. This will be the first step toward a truly semantic type of search, where you can aggregate all this information and use the power of unstructured content to, as John said earlier, be able to recognize things on the fly, as they’re changing real time, and not have to rely on old categorizations and old information. The rest of the Web will head this direction, led by what's going on in the Business Web -- one big content nation comprised of individuals and institutions cooperating and collaborating to create knowledge that’s going to help all of us.

Gardner: That’s a high note to end on. I want to thank you both for joining us in this discussion of exploring the definition of a business Web, some of the tools that are available to explore that now, and what we can expect in the future. We’ve been taking this discussion to a new level with Russ Glass, Vice President of Product and Marketing at Zoom Information, and John Blossom, President of Shore Communications. Thank you, gentlemen.

Blossom: Thank you very much.

Glass: Thank you, Dana.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You’ve been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and join us next time.

SPECIAL OFFER: Listeners of this podcast are invited to try ZoomInfo's Business Web search and discovery benefits through a special free-trial offer. Just go to www.zoominfo.com/businesswebpodcast to obtain free access to Zoominfo's advanced business search capabilities.

Listen to the podcast here. Sponsor: Zoom Information, Inc.

Transcript of Dana Gardner’s BriefingsDirect podcast on Business Webs and relationships-oriented search. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.