Shakeout Looming in B2B Communities?

B2B communities are typically places where birds of a feather flock together. They may be function oriented as in a marketing community, industry oriented as in a vertical community, or topic oriented as in a community focused on Linux.

They sometimes engage in e-commerce but that may not be their primary goal. Exchanges or online marketplaces, on the other hand, are established specifically to conduct e-commerce. They typically bring together buyers and sellers in one way or the other; they may be procurement services that feature consolidated purchasing from numerous partner vendors, conduits, or e-malls for general online buying, or bidding/auction-oriented sites.

Is there a shakeout coming in these types of web properties? Forrester Research says “e-marketplaces” will capture 53 percent of all online business trade by 2004. GartnerGroup believes that they will account for almost $3 trillion in sales transactions by 2004. In April 2000, Forbes reported that there were more than 500 exchanges funded with at least $5 million and that by 2003, there would be 2,000 of them.

Not all the predictions about B2B marketplaces and exchanges are rosy, however. Despite their dramatic expansion, potential problems could hamper ongoing growth. A high-profile meeting of e-commerce executives held in May 2000, the Association of Strategic Alliance Professionals Summit, said that a majority of B2B marketplaces will vanish within two years. They gave as their reasons antitrust issues along with fierce competition and stealing each other’s personnel. Additionally, Deloitte Consulting recently predicted a sharp drop in online marketplaces within the next two years.

From a marketing perspective, growth or decline in this area should not divert you from considering communities and exchanges in your promotional efforts. They remain an excellent way to reach target audiences on the Internet. For example, suppose you want to reach small businesses. These are just some of the leading communities and exchanges available that target this niche:

www.allbusiness.com services small businesses through a site that provides an advertising platform for companies that want to advertise their services, as well as advice and resources for the small-business owner.

www.bcentral.com, Microsoft’s entry into the market, promotes Microsoft’s own products and services, of course, but it is also a legitimate information site with plenty of helpful resources and useful links for the small-business owner.

www.bizbuyer.com matches up sellers and buyers by letting small businesses automate the RFP process.

www.buyerszone.com provides purchasing tools and advice for small to midsized businesses, covering more than 75 types of business purchases, and everything from 401(k) plans to fax machines to voicemail systems.

www.office.com targets small and midsized businesses, offering them information, community areas, independent reviews, assessment tools, and one-click purchasing.

www.onvia.com offers the ability to review suppliers, products, and prices quickly and easily.

Once you identify the communities and exchanges that serve your target market, find out what you can get from these sites by asking the following questions:

Which Free Services Are Offered?

Does the community offer free services you could take advantage of, such as email, home pages, chat, discussion groups, etc.?

What Opportunities for Free Publicity Exist?

Does the community have areas in which you can obtain free directory listings, postings of press releases, product listings in a buyer’s guide, events listings in a calendar, etc.?

What Opportunities for Paid Advertising and Promotion Are Available?

In evaluating paid opportunities, look at each possible activity from a media ROI perspective. In other words, analyze the potential number of prospects you will reach, and ask yourself if the dollars you are investing in the paid activity are reasonable on a cost-per-thousand basis. The smart way to go about it is to test a particular activity on a limited scale and see if the results warrant continued investment. The kinds of paid opportunities that may exist on community sites include sponsorships of site pages and areas, directory listings, email newsletter sponsorships, and so on.

As with any business decision, weigh all the positives and negatives before you get involved in a community, even if participation is free. If your objective is to use the community for marketing purposes, you will have to invest time as well as money. It takes time to make use of a community’s resources and build relationships with community members.

Often, the highest value you will get from a community is the networking value. View the community as a giant virtual meeting room. The networking possibilities are limitless. If you look at the community as a place where unlimited networking potential can result in unlimited business opportunities, you will probably get more than you ever thought possible out of participating in one.

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