ZoomInfo spins off 'bizographic' platform for controlled circulation online advertising play

Business information provider ZoomInfo has spun off its advertising business units in a new company, Bizo, offering a targeted B2B advertising platform, or what it calls "bizographic" advertising.

Privately held and venture-backed ZoomInfo, Waltham, Mass., announced a new set of business segments last fall, but has now taken the additional step of spinning the unit out. Former general manager and senior vice president Russell Glass will serve as CEO of the new company, which is expected to launch later this year. [Disclosure: ZoomInfo has been a sponsor of some BriefingsDirect B2B podcasts and videocasts that I have produced.]

Bizographic advertising, as ZoomInfo explains it, provides highly targeted demographic and behavioral advertising, allowing marketers to target their online advertising based on the audience of a site instead of the content.

For example, if a company wants to reach technology decision makers for an IT product offering or high-income individuals for a platinum credit card offer, it could use bizographic advertising to target directors of IT or CEOs respectively.

The field has heated up recently as CBS intends to acquire CNET (parent company of this blog's host, ZDNet) and it's BNET division, which also slices and dices audiences by work and functional definitions for the benefit of advertising targeting. Could Bizo also be on the block?

According to ZoomInfo officials, Bizo will continue to leverage the company’s understanding of business people and companies to allow marketers to target business users based on thousands of segmenting possibilities, including combinations of title, company, industry, functional area, company size, education, location, etc. The company expects over 20 million targetable business users in its network, when it launches.

Bryan Burdick, ZoomInfo's president explained the move:

"While B2B advertising is complimentary to ZoomInfo’s business, the market has been starved for the ability to target business professionals online. Creating a new business in order to meet that need was an ideal solution for us."

I gave my readers a head's up on what I called "controlled circulation advertising" last December, referring specifically to ZoomInfo:

ZoomInfo is but scratching the surface of what can be an auspicious third (but robust) leg on the B2B web knowledge access stool. By satisfying both seekers and providers of B2B information on business needs, ZoomInfo can generate web page real estate that is sold at the high premiums we used to see in the magazine controlled circulation days. Occupational-based searches for goods, information, insights and ongoing buying activities is creating the new B2B controlled circulation model.

ZoomInfo, a business information search engine, finds information about industries, companies, people, products and services. The company’s semantic search engine continually crawls millions of company Websites, news feeds and other online sources to identify company and people information, which is then organized into profiles.

ZoomInfo currently has profiles on nearly 40 million people and over 4 million companies, and its search engine adds more than 20,000 new profiles every day.

IBM remains way out in front on information access despite Microsoft's Fast bid

Ever notice that Microsoft -- with cash to burn apparently -- waits for the obvious to become inevitable and then ends up paying huge premiums for companies in order to catch up to reality? We saw it with aQuantive, Softricity and Groove Networks.

It's happened again with today's $1.2 billion bid by Microsoft for Norway's Fast Search and Transfer. Hasn't it been obvious for more than three years (at the least) that enterprise information management is an essential task for just about any large company?

That's why IBM has been buying up companies left and right, from Ascential to Filenet to Watchfire to Datamirror to Cognos. Oracle has been on a similar acquisitions track. Google has exceptionally produced search appliances (hardware!) to get a toe-hold in the on-premises search market, and Google and Yahoo! have also both been known to make acquisitions related to search. EMC even got it with Documentum.

Ya, that's what I'd call obvious. What's more, data warehousing, SAN, data marts and business intelligence (BI) have emerged as among the few consistent double-digit growth areas for IT spending the last few years.

So now some committee inside of Microsoft took a few months to stop fighting about whether SQL Server, SharePoint and Office 200X were enough to get the job done for the Fortune 500's information needs. I guess all that Microsoft R&D wasn't enough to apply to such an inevitable market need either. What do those world-class scientists do at Microsoft? Make Bill Gates videos?

And so now Microsoft's smartens up to internal content chaos (partly the result of all those MS Office files scattered hinther and yon), sees the market for what it is rather than what they would like it to be, and pays a double-digit multiple on revenues for Fast. Whoops, should have seen that coming. Oh, well, here's a billion.

It's almost as if Microsoft thinks it competitors and customers are stupid for not just using the Windows Everywhere approach when needs arise in the modern distributed enterprise. It's almost as if Microsoft waits for the market to spoil their all-inclusive fun (again), and then concedes late that Windows Everywhere alone probably won't get the job done (again). So the MBAs reach into the Redmond deep pockets and face reality, reluctantly and expensively.

Don't get me wrong, I think highly of Fast, know a few people there (congrats, folks), and was a blogger for Fast last year. I even did a sponsored podcast with Fast's CEO and CTO. That's a disclosure, FYI.

And I'm a big fan of data, content, information, digital assets, fortune cookies -- all of it being accessable, tagged, indexed and made useful in context to business processes. Meta data management gives me goosebumps. The more content that gets cleaned, categorized and easily found, the better. I'm a leaner to the schema. I'm also quite sure that this information management task is a prerequisite for general and successful implementations of service oriented architectures and search oriented architectures.

And I'm not alone. IBM has been building a formidable information management arsenal, applying it widely within its global accounts and a new factor as a value-add to its many other software and infrastructure offerings. The meta data approach also requires hardware and storage, not to mention professional services. IBM knows getting your information act together leads to SOA (both kinds) efficiencies and advantages. And -- looking outward -- as Big Blue ramps up its Blue Cloud initiatives, content access and management across domains and organizational boundaries takes on a whole new depth and imperative.

And now we can be sure that Microsoft thinks so too. Finally. My question is with all that money, and no qualms about spending lavishly for companies, why doesn't Microsoft do more acquisitions proactively instead of reactively?

Both Microsoft's investors and customers might appreciate it. The reason probably has to do with the how Microsoft manages itself. Perhaps it ought to do more internal searches for the obvious.

ZoomInfo offers more evidence of a 'controlled circulation' advertising benefit quickly emerging on the web

Get ready for new "controlled circulation" models on the web, ones that target you based not on your preferences for music or soft drinks -- but on what you consume in your occupation. Think of it as B2B social networking.

First, some set-up ... One of the great media inventions of the mid-20th century was the notion of affinity-based, controlled circulation publishing. Those creating magazine titles that catered to defined groups -- rather than mass media volume plays like network television -- went granular.

By focusing on concentrated audiences, these publishers walled up "universes" of buyers that passionately sought specific information as defined by discrete hobbies or occupations. Bill Ziff Jr. honed in on the hobbies, and grew a media empire on titles that linked up dedicated buyers -- of things like electronics kits, models, automobiles (and the jackpot, personal computers) -- to the sellers of the actual goods behind the passion. The ads inside these special interest pubs generated high premiums, based on the tight match between engaged (and well monied) buyers and drooling sellers.

Norm Cahners took the model in the direction of industrial business niches. He provided free monthly magazines based on slices of industrial minutiae that delivered useful albeit dry information to those specifiers of myriad corporate goods and services. You order gizmos for your buggy whips? You probably spend millions of dollars on procurement per each kind of good per year. Let me introduce you to some sellers of those goods who want to make you a deal.

The Cahners Publishing magazines -- on things like plastics use, integrated circuits developments, materials handling and design engineering -- were free to readers, as long as those readers identified themselves as corporate decision makers with budget to spend. Again, high ad premiums could be charged by linking engaged readers (with huge annual budgets) with advertisers who needed reach hard-to-find and shifting groups of corporate buyers.

Soon the burgeoning lists of these readers, sliced and diced by buying needs, and sanctified by audit bureaus as valid (mostly), became very, very valuable. As a controlled circulation publisher, if you had the top one of two monthly magazine titles that generated the definitive list of those buying all the industrial values, say, in North America -- you were sitting pretty. You controlled the circulation, defined and refined the audience, and so told the sellers how much they needed to pay you to reach those buyers. You priced high, but still less than these sellers would need to spend to send a warm body carrying a bad into each and every account (on commission).

In effect, the controlled circulation publishers collected straight commissions on billions of dollars in commercial and special interest goods being bought and sold. They were a virtual sales team for all kinds of sellers. Editorial was cheap. Life was good.

And then 10 years ago the Web came along and pretty much began to blow the whole thing apart. Engaged users started using Web search, and explored their vendors' web sites on their own. Vendors could reach users directly, and used their websites as virtual sales forces too. Soon there were wikis that listed all the sellers of goods in certain arenas of goods and services. Those seeking business or hobby information could side-step the editorial middleman and go direct to the buying information on goods and services they wanted. We're only into the opening innings on this, by the way.

But the same disruption that plagues newspapers like the San Jose Mercury News and The Boston Globe -- both of which should be doing great based on their demographic reach -- is undermining the trade media too. It's the web. It's search. It's sidestepping the traditional media as a means to bind buyers and sellers. The web allows the sellers to find the buyers, and the buyers to find the sellers with less friction, less guessing, less cost. Fewer middlemen.

And this means the end of controlled circulation has we have know it. ... Or does it?

Just as the web made has made it a lot harder for media companies to charge a premium for advertisers to reach a defined universe of some sort, the web could also allow for a need breed of controlled circulation, one that generates "universes" on the fly based on special interest search, not based on special interest magazines.

The current web ad model has evolved to be based on blind volume display ads, with the hope of odd click-throughs, usually of less the 0.5 percent of the total banner ads displayed. Advertisers know exactly what their ad dollar gets them, and it's not enough. Even when seekers click on ads, they usually get sent to a home page that was just as easily reached through keyword searches from a web search provide (for free), based on their real interests. Enter Google. And you know the rest.

Why the history lesson? Because we're now beginning to see some new variations on the controlled circulation theme on the web that create additional models. Controlled circulation could be back. It that could mean much bigger ad bucks than web display ads or even key-word-based ads can generate. It's what has Microsoft gaga over Facebook. And News Corp. gaga over MySpace. And Viacom beside itself because it has no such functional base yet.

Controlled circulation is coming to the web on one level via social networks, mostly for consumer goods and services -- sort of what Bill Ziff did for hobbyists in the 1950s and 1960s. Social networks like Facebook and MySpace endear their member users to cough up details about themselves -- just like controlled circulation publishers used to require for readers to get free magazines on specific topics. Based on the need to expose yourself on a social network to get, well ... social ... you therefore provide a lot of demographic details that can then be carved up into the equivalent of controlled circulation universes. Based on your declared consumer wants, fad preferences, age and location, you give advertisers a means to target you.

This model is only just now being probed for its potential, as the Beacon trial-and-error process as Facebook these days attests. Soon, however, an accepted model will emerge for binding consumers and sellers of goods and services, a model better than banner ads, one that can go granular on user preferences (but not too granular, lest privacy bugaboos rear their paranoid heads). When this model is refined, everyone from Microsoft to Yahoo to Google and Time Warner will need to emulate it in some fashion. It will be the third leg on the web ads tool: display, search-based, and now reader-profile constructed controlled circulation.

Which brings me to ZoomInfo. (Disclosure: ZoomInfo has been a sponsor of some BriefingsDirect B2B podcasts and videocasts that I have produced). What's so far missing in all of the Facebook hysteria is the Norm Cahners part, of how to take the emerging controlled circulation web model and apply it to multi-trillion dollar B2B global markets. How to slice and dice all the companies out there with goods and services you -- as a business buyer -- need to know about? Instead of the users giving up profile information on themselves as a way of providing profile-constructed controlled circulation, why not let the companies provide the profiles that the users can access via defined searches based on their actual needs?

Wade Rouch over at Xconomy gives us a glimpse of this model based on what ZoomInfo is now doing with "business demographics" or what Zoom calls Bizographics. This is the B2B side of what social networks are doing on the consumer side, but with a twist. By generating the lists of businesses that provide goods and services sough via a search, and even more lists of the goods themselves, users can educate themselves and the bond between B2B buyers and sellers is made and enriched. All's that's needed is the right kinds of searches that define the universe of providers that users can then explore and engage with.

ZoomInfo is but scratching the surface of what can be an auspicious third (but robust) leg on the B2B web knowledge access stool. By satisfying both seekers and providers of B2B information on business needs, ZoomInfo can generate web page real estate that is sold at the high premiums we used to see in the magazine controlled circulation days. Occupational-based searches for goods, information, insights and ongoing buying activities is creating the new B2B controlled circulation model.

What's more, these defined B2B universes on the fly based on occupations and buying needs amounts to giving more power to the users via what Doc Searls correctly calls Vendor Relationship Management. It's a fascinating concept we'll be seeing a lot more of: Matching buyers and sellers on the web based on their mutual best interests. Mr. buyer, please find Mr. Seller -- on your terms, based on your needs.

Survey uncovers heightening reliance on search across business purchasing

Listen to the podcast. Or read a full transcript. Sponsor: ZoomInfo.

It seems that businesses, whether they're small or global 2000 concerns, are buying more supplies using search at some point in the B2B procurement process. Some people begin and end a procurement journey with search. They actually buy the products through a strictly search-dependent process.



Yet many still use a combination of word-of-mouth, search, and traditional information gathering to guide them to the best deals on the most goods.

To find out just how much B2B buying behaviors are shifting, Enquiro Search Solutions conducted a survey earlier in 2007. They found that online search was consistently employed throughout the entire buying process, from awareness right through to purchase.

There’s still a lot of back and forth: Offline factors influence online activity, and vice-versa, for a merging of the online and the offline worlds. In an audio podcast discussion, as well as the accompanying BriefingsDirect multi-media video-podcast, I helped plumb the depths of Enquiro's findings and then vetted them through the experiences of B2B search engine ZoomInfo.

Join Gord Hotchkiss, President and CEO of Enquiro, and Bryan Burdick, COO of ZoomInfo, with moderation by myself, Dana Gardner, for a deep dive on B2B search trends and analysis.

Here are some excerpts:

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. The first survey ... 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.

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.

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. ... 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.

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.

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.

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.

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?

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.

The business information search is a primary factor driving [ZoomInfo's] 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.

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.

... 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. ... 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? ... The word of community.

Listen to the podcast. Or read a full transcript. Sponsor: ZoomInfo.