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RealTime IT News

GoTo Hedging Bets On B2B Campaign

In a time when portal plays are being downgraded amid worries about online advertising spending, GoTo, Inc., is busy getting the word out about its next iteration -- as a B2B marketing services provider.

The effort -- and GoTo's new business -- comes as financial analysts have been expressing serious concerns about portal's viabilities as ad-supported plays. In December alone, five covering brokers downgraded the industry's heavyweight and bellwether, Yahoo!. Last week, shares of YHOO hit an all-time low of $25.06.

With analysts' concerns lingering about the effectiveness of online advertising -- and about the staying power of Internet content pure-plays at all -- GoTo is betting big to make sure 2001 won't be a rehash of the previous year's fortunes.

The firm is investing a sizable chunk of time, effort and cash into an advertising and direct marketing campaign aimed at promoting the company's new direction away from banner ad-supported content.

Like Yahoo! and Excite, the company began life as a search engine-turned-portal. But GoTo has a distinct difference -- the site offers paid placement in its search engine returns.

That differentiator, and the marketing services that an outsourced pay-for-placement engine offers affiliated companies -- turned out to be one of the company's biggest assets. During the past year, executives noticed that a majority of the site's search engine users were being driven from partnered sites -- America Online, Ask Jeeves, and others.

GoTo also hasn't been growing as fast as some of its competitors. As of Jupiter Media Metrix's last numbers (from November), GoTo's monthly unique traffic had grown only 7.4 percent from last year, as opposed to 24.2 percent for Yahoo! and 50.1 percent for Excite.

Those facts, coupled with the across-the-board downswing in advertising revenues, led GoTo to plan a move into the B2B space, by partnering with other Web sites to offer its search engine return position-placement services.

And through its campaign, which lasts until March, GoTo hopes to position itself to the portals as a B2B marketing solutions provider, rather than a competitor -- and is investing heavily in the effort.

An internal marketing plan obtained by Internet Advertising Report lays out the various segments of a six-month-long advertising and marketing campaign geared to bolster GoTo.com's affiliate program.

Elements of the campaign kicked off earlier this season with regionally targeted print advertising in business publications including the Industry Standard, Business 2.0, Smart Business, and others. Those ads focus on GoTo as a way to help companies see significant ROI on their marketing dollars.

But one of the prime constituents of its program, which focuses primarily on New York, San Francisco and Los Angeles, were some fairly plucky direct mail pieces.

"Broad-targeted reach, print ads will set the foundation, but because we're dealing with a fairly small number of key decision-makers within potential Internet companies, we have a very big direct marketing campaign where we go right at those," said Al Callier, director of affiliate channel marketing for the company.

"We put a lot of effort into positioning ourselves as a premier business partner in the Internet space, as opposed to a competitor ... to better communicate to our prospective business partners what we are, and to position ourselves as a key provider of Web revenue," Callier said. "We see ourselves as one of the leading business partners for Web sites to drive revenue and monetize traffic properly. The campaign sets the foundation for our business development and sales force to establish partnerships against that objective."

From early September to mid-October, GoTo shipped two-foot-tall, remote-controlled toy robots to potential clients, at an approximate retail val