A lot of marketing VPs in Silicon Valley these days are looking for new ways to grow their brand and generate demand, but there is very little space in their budget for new programs. For them, social marketing holds a lot of promise, but at the same time it’s a big unknown and many companies I’ve talked to have de-prioritized social media to focus more on generating demand through traditional programs.

Some b2b companies still regard social media as a b2c marketing channel and they haven’t decided social marketing is right for them. Others believe social media can help them in PR and demand generation, but they are postponing their programs until “things settle down.” Others just don’t know where to start.

So, what is the best way to improve results without increasing expenses? For most companies I believe the answer here is to shift marketing budget from traditional PR and marketing programs to newer digital marketing techniques. But, before addressing how to set priorities, how confident are you that your buyers are online and approachable via social media?

Earlier this year (February 2009) Forrester issued a Social Technographics Of Business Buyers study which indicated that while social participation varies across business categories, the majority of business buyers are engaging in social activities for business purposes (e.g., survey respondents categorized as “spectators” ranged between 65% and 74%). In addition, Forrester’s recent technographics report issued just last month indicates that social participation among all consumers is continuing a clear upward trend. Enquiro has also published an extensive library of research on “the Buyersphere” indicating again that business buyers are on line researching their purchases and making buying decisions.

But, as almost anybody who has tried will tell you, b2b buyers are harder to reach than b2c buyers. There are fewer of them, their considered purchases generally require extensive justification, and sales typically require multiple approvers. Does social marketing work for them too?

And, what about enterprise b2b buyers? These are the ones who have gatekeepers (i.e., personal assistants) that take their phone calls and manage their email inboxes. The “reach and repetition” of your marketing programs somehow needs to get through to these target buyers as well as to their circle of approvers and influencers. The scope of this challenge becomes clear when you look at the simple math behind b2b pipeline development (figure below).

What social media cannot do is change the b2b “numbers game” – that is the “top end of the marketing and sales funnel” needs to be very broad and deep: Broad in the sense that the funnel requires a large volume of “impressions” at the top, and Deep in the sense that the target audience at this level consists of many types of roles and levels of familiarity with your product or even the problems they address.

Like b2c programs, b2b needs to develop awareness, but b2b also needs to mature interest and establish relevance of a product in the pecking order of day-to-day business needs. This is a tall order that most traditional programs fail to meet because they are geared toward “reach and repetition” measurements.

These programs are structured within “messaging frameworks,” and generally equipped only to communicate one way (from company to target). As the illustration shows, success at the top of the funnel is dumbed down to measurements like “impressions” or “advertising value equivalents.” From there, the marketing programs paid for and executed by cash and resource constrained marketing organizations are the primary way to get the word out. This can make demand generation a very costly and unproductive exercise.

Social marketing is one of the few strategies that address these challenges. While it clearly has the ability to reach broad audiences that appear for the most part to be online, social marketing also has the very unique quality of addressing various buyer needs with every question or comment made in the public domain. So it’s not just that business buyers are online that makes social marketing so attractive. It’s this nature of social marketing that makes great ideas travel, and actually makes the very best ideas the most popular.

A key challenge then for marketers is coming up with these ideas that should claim the attention of target buyers and by their own virtue facilitate their viral adoption by the masses. This is why the “reach and repetition” of traditional PR and marketing has been replaced by “propagation and durability” of social media, or so say the folks at StradellaRoad. The real problem is that left to their own devices, traditional demand generation programs are likely to become even less effective moving forward at this “new game.” The task at hand: Use social mechanisms to seed valuable ideas that can take off and still be rooted in value your products can deliver.

But I don’t think the answer is to abandon traditional programs altogether – at least not now. Programs like email, telemarketing, and even main stream public relations are probably best augmented by finding ways to integrate them with newer digital and social marketing techniques. Marketing does need to figure out where their buyers “hang out” on-line and develop interesting ways to reach them. This means, prioritizing efforts will be key – which is basically where we began, and where I will continue this discussion.