Digital marketing utilisation in fast-growing international B2B startup companies in Finland

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UNIVERSITY OF EASTERN FINLAND Faculty of Business and Social Sciences Business School

DIGITAL MARKETING UTILISATION IN FAST-

GROWING INTERNATIONAL B2B STARTUP COMPANIES IN FINLAND

Master’s Thesis, Innovation Management Jesse Pärnänen, 235000 May 28, 2018

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Abstract

UNIVERSITY OF EASTERN FINLAND

Faculty

Faculty of Business and Social Sciences

Department Business School Author

Jesse Pärnänen

Supervisor Kaisa Henttonen Title

Digital marketing utilisation in fast-growing international B2B startup companies in Finland Main subject

Innovation Management

Level

Master’s Degree

Date 28.5.2018

Number of Pages 79+2

Abstract

The objective of this study is to investigate the utilisation of digital marketing channels and barriers and enablers that influence the adoption of digital marketing channels in fast-growing B2B startup companies in Fin- land. This thesis aims to contribute to the existing literature of digital marketing utilisation and adoption and fill a gap on the academic research related to how fast-growing B2B startup companies in Finland utilise digital marketing channels.

Previous research on this subject is mostly focused towards specific digital marketing channels rather than providing an overview of all digital marketing channels. More specifically in Finland, there is a couple of studies about the usage and adoption of digital marketing channels. However, these studies have been focused on domestic companies that might only operate locally. Therefore, there is a need for studying digital marketing adoption in a context of fast-growing international B2B startup companies.

The data for this research was collected with five semi-structured theme interviews with marketing decision- makers in these five companies during the February-April of 2018. The interviews were recorded, and the analysis method was qualitative theme analysis. Therefore, the themes were created based on the literature review, and this guided the empirical analysis of this thesis.

The results of this study indicate that fast-growing international B2B startup companies are utilising and have adopted digital marketing channels widely contrary to previous research about Finnish SMEs. Furthermore, fast-growing international B2B startup companies are more goal-oriented and systematic when utilising digital marketing channels. The results of this study also contribute to earlier studies done related to the factors that effect on adoption of digital marketing channels.

The purpose of the thesis was to study the utilisation of digital marketing channels and barriers and enablers that influence the adoption of digital marketing channels. The findings differ from the earlier research done in the Finnish market among the SMEs. This indicates that there is a clear difference on how fast-growing international B2B startup companies utilise digital marketing as a part of their marketing mix compared to domestic SMEs that operate in Finland.

The findings indicate that the companies that want to utilise digital marketing effectively should be open to experiment with digital marketing channels, have clear numeric goals when measuring the effectiveness of digital marketing and approach digital marketing systematically. As the findings differ from the earlier research done in similar market, this study offers valuable research venues for future research.

Keywords

B2B Marketing, Digital Marketing, Technology adoption, Startups, Digital marketing channels

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Table of Contents

1 INTRODUCTION ... 5

1.1 The purpose of the study ... 7

1.2 Definition of a startup ... 9

1.3 Definition of digital marketing ... 9

1.4 The structure of the research ... 10

2 LITERATURE REVIEW ... 12

2.1 Background and previous research ... 12

2.2 Digital marketing channels ... 16

2.2.1 Social media channels ... 16

2.2.2 Search Engine Marketing (SEM) & Search Engine Advertising (SEA) ... 18

2.2.3 Email marketing ... 18

2.2.4 Content marketing & website ... 19

2.2.5 Barriers and enablers of digital marketing utilisation ... 21

2.3 Technology adoption ... 24

3 METHODOLOGY ... 26

3.1 Context of the study ... 26

3.2 Methodological approach in this research ... 29

3.3 Methods of data collection ... 30

3.4 Method of analysis, the process of analysis & evaluation of the methodology ... 32

4 EMPIRICAL ANALYSIS AND THE RESULTS OF THE STUDY ... 34

4.1 Company 1 ... 34

4.1.1 Context and background ... 34

4.1.2 Social media utilisation ... 35

4.1.6 Summary of the utilisation of digital marketing channels ... 38

4.1.7 Challenges of digital marketing adoption ... 39

4.2 Company 2 ... 41

4.3 Company 3 ... 47

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4.4 Company 4 ... 53

4.5 Company 5 ... 59

5 DISCUSSION AND CONCLUSION ... 65

5.1 Summary of the study ... 65

5.2 Key findings ... 69

5.3 Evaluation of the study ... 71

5.4 Managerial implications & future research potential ... 72

REFERENCES ... 74

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1 INTRODUCTION

Business-to-Business (B2B) marketing continues to evolve because of new technologies and new ways of marketing. Therefore, successful early-stage companies must find effective ways of marketing to create competitive advantage and to reach potential customers through both offline and online channels. One of the relatively new trends in marketing is the usage of digital tools and digital marketing channels to attract new customers online.

While working as a business developer at a startup company that provides a digital tool which helps companies to generate more sales leads and measure the success of digital marketing campaigns, I have noticed that there are significant differences on how companies are using or have adopted digital channels as a part of their marketing strategy. During my day-to-day work in the past two and a half years, I have spoken and consulted over 300 B2B companies all over Europe on how to utilise web analytics and measure the effectiveness of digital marketing. According to my experiences from interacting with these companies, there seems to be a shift going on towards a more strategic approach to digital marketing utilisation.

As mentioned, based on my experiences, companies are now going digital and investing in digital tools and usage of digital channels. This view is also backed by the recent Gartner CMO Spend Survey where it can be seen that the investments in marketing technologies are increasing year by year. (Gartner, 2016). Based on the same survey, companies are also allo- cating their budget to emphasise data-driven and digital growth (Gartner, 2016).

Furthermore, based on the marketers I have consulted, companies who have an international focus seem to be more strategic and focused on digital marketing as well, whereas more locally focused companies may rely more on traditional marketing channels and are still on the verge of utilising and adopting new ways of marketing. Hence, I decided to study in this thesis in more detail the following research questions: 1. How are digital marketing channels utilised as a part of the marketing mix in fast-growing international B2B startup companies in Finland? 2. What are the barriers and enablers of digital marketing adoption in the fast- growing international B2B startup companies in Finland?

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This research is relevant and needed based on the previous literature and surveys. Firstly, there is a definite trend towards using digital tools, and digital marketing in the B2B landscape (Järvinen et al., 2012) and B2B markets are going through significant changes because of evolving customer demands (Wiersema, 2013). Secondly, based on the previous literature there is a need for research around digital marketing adoption among international B2B companies in the Finnish market (Järvinen et al., 2012). Thirdly, the previous research about digital marketing usage and adoption in Finland has focused either on the region of Central Fin- land (Taiminen & Karjaluoto, 2015) or in the industrial section (Järvinen et al., 2012). Lastly, although there is previous literature about the adoption of specific channels in B2B companies like social media (Michaeliou et al., 2011; Siamagka et al., 2015) or content marketing (Hol- liman & Rowley, 2014) there is a need for research for a broader scope of digital marketing utilisation and adoption in the B2B field.

Compared to traditional marketing channels, digital marketing can be easier to measure (Jä- rvinen et al., 2012). As digital marketing can be easier to measure, studying the utilisation and adoption of digital channels can provide valuable insights for the companies and scholars as well. Moreover, when looking at the B2B market in Finland, the research about digital marketing is still emerging (Taiminen & Karjaluoto, 2015). Therefore, this research will contribute to this emerging literature, specifically focusing on to the utilisation and the adoption of digital marketing channels in the international B2B landscape.

Digital marketing channels, marketing automation and investments in digital tools have been increasingly more important for the B2B companies (Gartner, 2016). Buyer behaviour has changed drastically as the buyers can compare and evaluate different vendors or service pro- viders online globally. This change has created new possibilities for both Business to Cus- tomer (B2C) and B2B marketers to find, nurture and convert potential customers by utilising digital touch points. Example of these digital touch points can be that the potential customer fills in a contact request, downloads an e-book or other material or signups for a newsletter at the company’s website. All of these digital touchpoints can be monitored and measured, which makes digital marketing more measurable than traditional marketing and effective way to reach new customers.

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Hence, by utilising digital marketing, marketing automation and web analytics solutions, B2B marketers can often map the buyer’s journey from the first digital touch point to when the purchase decision is made. Therefore, as there is an extensive amount of data and possibilities available, utilising this data to optimise digital marketing usage can give B2B companies a significant competitive advantage. As the context of this research is fast-growing international B2B startup companies, their business model should be scalable and potential customers should often be reached via online channels the quickest way. Consequently, emphasising the online presence, mapping out these digital touch points and utilising digital channels efficient- ly can provide quick growth.

1.1 The purpose of the study

The purpose of this research is to study how digital marketing channels are utilised in the fast- growing international B2B startup companies in Finland and what kind of enablers or barriers influence the adoption of digital marketing channels. This research will contribute to the existing literature and aims to fill a research gap on B2B digital marketing by providing an overview of how fast-growing international B2B startup companies in Finland are utilising digital marketing channels and what are the enablers or barriers that influence the adoption of digital marketing channels. This study can help scholars and companies to understand how fast-growing B2B startup companies are utilising digital marketing channels and provide valuable insights from which companies can learn from.

Furthermore, as there is only little academic research conducted about this subject in a different context in Finnish market (Järvinen et al., 2012; Taiminen & Karjaluoto, 2015), this study will contribute to the emerging literature of digital marketing usage and adoption in a B2B context. Moreover, there is a trend towards using digital tools, and digital marketing in the B2B landscape (Järvinen et al., 2012). Therefore, this study will provide a better understanding of this phenomena.

This study is current and needed as many companies are moving from traditional marketing channels to digital marketing and adding, for example, content marketing aspects to their marketing strategy (Holliman & Rowley, 2014). This change in the marketing focus has also

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been mentioned in the previous academic literature as Wiersema (2013) notes that the growing pressure from both competitors and customers within B2B field has created a transfor- mation to B2B marketing. Hence, this study aims to provide an overview of the current utilisation of digital marketing channels and understand if a similar change is evident in the context of fast-growing B2B startup companies in Finland.

In more detail, this research contributes to the previous research done in digital marketing channels in Finland (see: Järvinen et al., 2012; Taiminen & Karjaluoto, 2015) as well as to the previous literature about usage or adoption of specific digital marketing channels (Michael- idou et al, 2011; Holliman & Rowley; 2014; Siamagka et al 2015; Shaltoni, 2017; Buratti et al., 2018) and to the wider spectrum of technology adoption literature. (Dholakia & Khestri, 2004; Grandon & Pearson 2004; Aguila-Obra & Padilla-Melendez, 2006; Molinillo & Japu- tra, 2017).

While this study is focused on fast-growing international B2B startup companies, the results of this research can be also valuable for other Small- and Medium-sized Enterprises (SMEs) in Finland operating in international markets. As the digital marketing landscape widens and new technologies are emerging, it is essential for companies to understand what are the enablers and barriers that influence the adoption of digital marketing. Therefore, this research can provide valuable insights to the startup companies and other SMEs that want to implement new digital channels for their marketing.

My research questions are:

-How are digital marketing channels utilised as a part of the marketing mix in fast-growing international B2B startup companies in Finland?

-What are the barriers and enablers of digital marketing adoption in the fast-growing international B2B startup companies in Finland?

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1.2 Definition of a startup

Even though there is a vast amount of academic research about startups, there is surprisingly low consensus on the definition of a startup. Many authors use the term but do not define the term startup in more detail. Because this study is targeted at a particularly focused group of startup companies, there is a need to explain the term in more detail. Moreover, it is essential to understand that the term startup does not include all newly established companies, but rather just a fraction of those based on the characteristics of the companies.

Some of the earlier authors define a startup as an innovative and young company (Schneider

& Veugelers, 2010). One of the non-academic definitions of the characteristics of a startup is the following; “eager to search repeatable and scalable business model” & “agile enough to deal with daily change and operating “without a map”.” (Blank & Dorf, 2012, 45).

In addition to these definitions of a startup, in this study, the characteristics that are presented in Table 5 will explain and define the term in more detail. Therefore, when referencing to startup in this research, it means that a company has a scalable business model, opportunity to grow fast and can attract venture capital along with other characteristics that are visible in Ta- ble 5. (Tekes, YIC, 2017).

1.3 Definition of digital marketing

Digital Marketing as a definition has evolved from firstly describing the marketing of services or products through online channels to a technology-enabled and adaptive process where companies collaborate with clients and partners to jointly communicate, create and sustain value for the stakeholders. (Kannan & Hongshuang, 2017). This emphasises the way marketing is changing when digital aspects are included. Digital marketing can be also seen as a fundamentally new way of marketing (Järvinen et al., 2012). Digital technologies enable the creation of value through interactions with customers and their customer experiences. Digital

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marketing itself is established by adaptive digital touchpoints that include the marketing activities (Kannan & Hongshuang, 2017).

Compared to traditional marketing channels, digital marketing channels can offer the most scalable way to reach new customers in multiple markets. Establishing an online presence as a company and when utilising digital marketing channels, it is possible to attract potential customers on a global scale. Therefore, digital marketing channels can offer quicker Return On Investment (ROI) than traditional marketing channels and the results are also often easier to measure.

During this research, digital marketing and channels are connected to the broader perspective of digital marketing where companies look to attract, nurture and convert potential clients to paying customers and look to enhance the awareness through online channels. All of the digital marketing channels will be explained and defined all in the literature review of this thesis.

1.4 The structure of the research

During the next chapter, I will go through the previous literature about digital marketing, define and go through the all the key terms related to digital marketing and this research. The digital marketing channels have been divided into four different sub-headings to emphasise the different channels of digital marketing and how they differ from each other. I will also explain what the main barriers and enablers for digital marketing adoption based on the previous literature on the subject are.

After explaining and defining the key terms related to this research, I will go through in more detail what is the methodology approach, data collection, analysis method and context of this research. At the methodology chapter, I will also go through briefly what is the reasoning for selecting these research approaches and explain what the strengths and limitations of the methodologies chosen are.

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The fourth chapter will go through the empirical part of this research. I will first explain the context of the interviewed companies in more detail. Secondly, I will go through the utilisation and the barriers and enablers that influence the adoption of digital marketing channels for each company. Thirdly, I will summarise the utilisation of digital marketing channels and what were the main barriers and enablers the companies have encountered when adopting digital marketing channels.

In the last chapter, I will summarise and conclude the research, analyse the key findings of the research and go through managerial implications, research limitations and suggest future possibilities to research for other scholars.

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2 LITERATURE REVIEW

2.1 Background and previous research

B2B marketing research is still quite young, and there is much to discover in this field (Hadjikhani & LaPlaca, 2013). Moreover, when talking about past research done in the field of internet marketing, just less than five years ago within the research done related to internet marketing, only 3% of the research was conducted in a B2B environment. B2B digital marketing research overall is underdeveloped, and even though the majority of the internet commerce is still B2B, there is a surprisingly low amount of research being written in this area (Pomirleanu et al., 2013).

Internet and digital channels have become huge platforms for anyone looking to market their products or services. Still, many marketers are trying to learn on how to incorporate the internet and relevant channels to their marketing plans and business model. Hence, more research is needed to educate the marketers and understand this issue better (Pomirleanu et al., 2013).

Whereas adoption processes of new technologies in SMEs have been previously studied quite widely (Dholakia & Kshetri, 2004; MacGregor & Vrazalic, 2005; Lohrke et al., 2006; Carroll

& Wagar, 2010; Chatzoglou et al., 2010; Asare et al., 2016). There is a need for more in- depth research about how companies utilise and have adopted digital marketing channels as a part of their marketing mix (Taiminen & Karjaluoto, 2015).

Previous literature also includes research about social media adoption and usage (Michaelidou et al., 2011; Siamagka et al., 2015; & Buratti et al., 2018) and for example content marketing usage and adoption (see e.g. Rowley, 2008; Holliman & Rowley, 2014; Järvinen & Taiminen, 2015). However, when considering digital marketing channels overall, there is only a little research done on this subject on the B2B side (see: Järvinen et al., 2012; Taiminen & Kar- jaluoto, 2015; Shaltoni, 2017).

On the previous research, specifically focused on digital marketing usage and adoption (Jä- rvinen et al., 2012 & Taiminen & Karjaluoto, 2015) found out that digital marketing channels are not widely used as a marketing channel in Finnish SMEs. Companies failed to see the po-

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tential of digital marketing channels and their skill level was not high enough to get the most out of the multiple channels (Järvinen et al., 2012 & Taiminen & Karjaluoto, 2015).

Leeflang et al., (2014) studied challenges for the companies that try to go digital. They interviewed 777 marketing executives in total across the globe. The scholars could identify four different challenges for companies that go digital. These four challenges are as highlighted in Table 1 below:

Four marketing challenges of new era which seemed to be more prevalent 1. The use of customer insights and data to compete effectively

2. The threatening power of social media for brands and customer relationships

3. The omnipresence of new digital metrics and the subsequent assessment of the effectiveness of (digital) marketing activities 4. The increasing talent gap in analytical capabilities within firms.

Table 1: Four major marketing challenges in this new era (Leeflang et al., 2014.)

Interestingly, the usage of data and customer insights as a competitive advantage was highlighted in their research. (Leeflang et al., 2014). This seems to indicate that the companies are looking to improve their competitive status via going digital but do not yet understand all the metrics and measurement related to that. This view was also one of the findings concerning digital marketing usage and adoption (Taiminen & Karjaluoto, 2015). Companies sometimes fail to understand the benefits of the digital channels is not clear, and this hinders the usage of digital marketing channels (Järvinen et al., 2012; Taiminen & Karjaluoto, 2015).

As two of the challenges were the measurement of digital marketing and analytical capabilities within the own company, there seems to be a skill-gap that prevents marketers to benefit from digital channels with full potential (Leeflang et al., 2014). Similarly, scholars found out

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that there is a need for training and improving the skills of marketers to utilise the full potential of digital marketing channels in SMEs in Finland (Taiminen & Karjaluoto, 2015).

Research about best practices of B2B digital content marketing (Holliman & Rowley, 2014) points out that digital marketing in B2B companies includes creating content which is relevant, compelling, timely and useful for their audience. Therefore, content marketing requires cultural change towards “helping” the potential customers rather than “selling” to them. This approach differentiates content marketing as a part of digital marketing when compared to traditional marketing methods. (Holliman & Rowley, 2014.)

Previous research about the usage or measuring digital marketing in similar markets include for example the role of web analytics as a performance metric for digital marketing (Järvinen

& Karjaluoto, 2015). Scholars found that establishing a clear and manageable metrics system is vital in measuring the success in digital marketing. Furthermore, it is essential that the company can support the metrics system to measure digital marketing effectively (Järvinen &

Karjaluoto, 2015). This also relates to the challenges of digital marketing that the scholars found out.

These challenges that scholars found points out that it was worrying that the SMEs are not aware that they could use digital channels in their marketing strategy and they did not use the full potential of digital marketing and tools related to that (Taiminen & Karjaluoto, 2015). It has also been noted that the most considerable challenges for digital marketing adoption are for example skills of individuals, human resources and lack of time (Järvinen et al., 2012).

As mentioned, the previous literature in the Finnish market about digital marketing channels and the usage of those channels in SMEs (Järvinen et al., 2012; Taiminen & Karjaluoto, 2015) is focused mostly on the domestic companies and specific geographical locations or on the role of digital channels in marketing communications in industrial companies (Karjaluoto et al., 2015). Therefore, there is still room for more research about digital marketing channels, especially with international B2B startup companies in Finland.

Based on previous literature, digital marketing channels can be divided into one-way and two- way communication channels. Similarly, digital marketing channels can be divided into two groups depending on the control that the company has over those channels. These groups are visible in Table 2 (Taiminen & Karjaluoto, 2015).

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Classification of Digital Marketing Channels

High company control Low company control

One-way Website (SEO) Search engine optimi-

sation

Email newsletters (SEA) Search engine advertising

Online directories

Banner advertising

Company generated blogs

Social media

Two-way Company’s own communi-

ties

Table 2. Classification of digital marketing channels. Taiminen & Karjaluoto, 2015.

The previous Table 2 indicates that digital marketing channels differ from each other as companies can influence certain channels more than others (Taiminen & Karjaluoto, 2015). For example, for companies it is hard to have control over the social media discussion as anyone there has a voice and can express their opinions about the company. Similarly, in SEA and SEO, the competitors have a significant role and can influence the results of those digital channels. On the contrary, some digital marketing channels provide high control level for companies. Example of this would be company’s website and blog, where they can write and make edits as much as they want and influence potential clients with high level of control.

The second way of differentiating digital marketing channels is how interactive the channel is.

Hence, digital marketing channels can be divided into one-way communication channels like

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website, newsletters or ads or to two-way communication channels like social media or own communities.

One-way communication channels like newsletter push information outwards, whereas, for example, social media is a highly interactive channel which encourages companies to do two- way communication and engage with potential customers. One- and two-way communication channels can also be divided into high company control and to low company control. For example, it is easy to monitor what is happening in your website and in the blog, but it is diffi- cult to monitor and take control over social media discussions. (Taiminen & Karjaluoto, 2015.)

2.2 Digital marketing channels

I will go through and define all the essential digital marketing channels related to this research and explain the meaning of these channels. These channels are differentiated based on their characteristics and differences. All in all, the next few chapters will give a more thorough understanding what the digital marketing channels used in this research are and what are and the main challenges that previous literature has been able to identify related to the usage and adoption of digital marketing channels.

2.2.1 Social media channels

Social media has become a significant platform for marketers worldwide both in B2C as well as in B2B marketing. Social media usage is still growing rapidly, and because of this, there is significant potential for B2B marketers to utilise social media as a marketing platform. To illustrate this rapid growth and the size of social media today - for example, Facebook has more than doubled their monthly active users in the last five years, and currently, it has 2 bil- lion monthly users (TechCrunch, 2017)

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Other notable social media sources include platforms such as Youtube, Twitter, Instagram, Snapchat and LinkedIn for example. These all have emerged during the last 13 years and have since changed significantly the way people communicate. Therefore, It is no surprise that the companies are also investing much more in marketing on these channels as well. This view is backed by previous literature, which suggests that adopting social media can benefit organisa- tions significantly (Siamagka et al., 2015).

As a definition, social media can be described as a collection of online tools that are public and open, and they support sharing ideas, editing and creating content. Social media offers relationship building through collaboration and interaction (Kim & Ko, 2012;

Mount & Garcia Martinez, 2014). Social media can also be described as a set of applications on the internet that allows users to generate content and provide a place for interaction between different users of the application. (O'Leary, 2011).

Companies can use social media to enhance their marketing and communications towards their customers and potential customers. Social media can also be seen as a channel to engage with customers, build a stronger brand for the company and for building customer relationships (Taiminen & Karjaluoto, 2015). These marketing efforts can include non-paid campaigns and content which is naturally cost effective. If the content from a company goes viral, the return on investment can be significant. Furthermore, many social media platforms offer a possibility to do paid marketing campaigns which help companies to reach a targeted audience of potential customers based on geographical location, interest or other relevant information that social media vendors can use to help the advertisers to get more results.

Overall adopting social media as a marketing channel can offer companies indirect or direct sales as well as it can enhance the reputation and trust of the company that is present and active in social media (Durkin et al., 2013; Dutot & Bergeron, 2016). Recent literature also suggests that on the B2B field drivers that influence social media adoption are company innovativeness and the perceived usefulness of the social media channel (Siamagka et al., 2015).

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2.2.2 Search Engine Marketing (SEM) & Search Engine Advertising (SEA)

As mentioned in the previous chapter, social media includes the possibility to do paid adver- tisement. However, different online channels can also offer opportunities for paid marketing campaigns. One of the most used channels to do this is Google’s search network ads and display network ads.

Search network ads allow companies to target specific keywords or questions that people are searching from Google search on their browser. When utilising search network ads, companies can also target a specific group of potential customers by targeting on a geographical location or even use competitor’s brand name to attract people who are searching for the right keywords on Google. Therefore, search network and paid ads with specific keywords can be a powerful channel to an international startup company. Successfully conducted paid marketing campaigns with AdWords should help companies to attract new customers, reduce bounce rate and increase traffic to the website. However, there is also a risk that the quality of visits worsens if the campaigns are not planned properly (Moral et al., 2014).

Companies can also use Google’s display network when advertising via online channels. This marketing channel can reach up to 90% of all the people that are using internet according to Google (Google Adwords, 2017). Google’s display network differentiates from search network ads significantly as the display networks include video and display advertising as well as remarketing possibilities. On the contrary, the search network ads focus mainly on the search terms and keywords that are typed into Google search. However, display ads can be also connected to keywords and themes around those keywords, but display ads are not text- based ads as the search network ads are.

2.2.3 Email marketing

Email marketing can be described as a marketing channel which includes promotional emails, newsletters and other communications via email. The previous research considers email marketing as a more of a one-way channel of marketing communication (Taiminen & Karjaluoto,

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2015). This means that email can be seen as a way of promoting products or services and not necessarily as a two-way engagement channel. Historically, when considering digital marketing channels, email marketing has been one of the most used digital marketing channels among e-commerce SMEs (Eriksson, 2008). However, when talking about the whole B2B landscape, using email as a marketing channel and the perceived importance of the channel has been decreasing year by year (Gartner, 2016).

Furthermore, email marketing as a communication channel is undergoing some changes as the new European General Data Privacy Regulation (GDPR) came into effect on 25th May of 2018. GDPR affects marketing related data like emails, names and personal information and how companies have to handle their customer or user data. In email marketing, GDPR will change the way companies can gather and store email addresses and other personal data.

GDPR requires a clear opt-in and consent from a person before it is possible to add them to the marketing list. Companies also need to explain why they need the email address and what is the purpose of the messaging. Lastly, when storing personal data companies also must give access to users to modify or delete their user data completely.

2.2.4 Content marketing & website

Content marketing is often closely related to company's website and therefore, to be clear and cohesive during this thesis, I decided to bundle these both channels under one combination.

The objective of the content marketing is often to raise the awareness of the company and products or services among potential customers, and this way drive traffic to the website.

Therefore, content marketing can be seen as a pull marketing method where companies are looking to attract the interest of potential customers who are searching for advice, information, a service or a product (Holliman & Rowley, 2014).

Moreover, content marketing means that companies create relevant and interesting content like for example blog-posts, whitepapers and case studies to their website. Content marketing and blogging particularly, requires that company has relevant and interesting ideas to share.

Compared to social media, for example, companies have more control over their blog-posts as

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they are usually located on the company’s website where they can filter or monitor the interaction (Taiminen & Karjaluoto, 2015).

Producing relevant content also closely relates to Search Engine Optimization (SEO). SEO is a marketing strategy that allows companies to be found in organic searches on different search engines like Google or Bing with relevant keywords. SEO differs from paid search ads because it does not require any external payments, but rather it is a way to build awareness and expand the reach and visibility by creating content to your website.

SEO requires a long-term commitment to content marketing and producing content from the companies as the competitive landscape can be global online. To be able to rank high in organic search results with relevant keywords, companies must produce relevant, insightful and useful content, be visible on other websites and gather external backlinks to their website.

This tactic of gathering backlinks to the website from trustworthy sources like prominent pub- lications or high traffic websites can help companies to increase their website’s visibility and trustworthiness, which will usually have a positive on the organic search engine rankings.

Overall, SEO is a combination of content, external links to your website and website design and structure. Website’s design, page amount, the speed of loading and technologies used can all influence the search engine results. Google has a sophisticated and evolving algorithm which takes into account different critical aspects of the website like headlines, titles, page structure and meta-descriptions to identify if the websites have the relevant information for specific keywords or phrases. This means that if companies want to be ranked better on organic searches, the website must be optimised with multiple variables. Therefore, SEO must be part of the long-term digital marketing strategy for companies to see the value of it.

As mentioned before, one of the main channels of digital marketing is the website of a company. The website can be viewed as a one-way communication channel that company has high control over (Taiminen & Karjaluoto, 2015). For digital marketing purposes, the website can be monitored with different web analytics or marketing automation tools like Google An- alytics, Leadfeeder or HubSpot. As there is a vast amount of information available from company’s website, the website optimisation and the overall usability and design of the website has become increasingly important for B2B companies too.

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During the next chapter, I will go through the existing literature about enablers and barriers to digital marketing and technology adoption. As there are multiple theories and frameworks available on the technology adoption side especially, I will go through and define suitable ones for this research.

2.2.5 Barriers and enablers of digital marketing utilisation

Previous research around the challenges of digital marketing usage identified the following challenges for digital marketing adoption among SMEs. (see Table 3. The barriers are in the descending order, Scale ranging from 1=strongly disagree to 5=strongly agree:

Lack of human resources 3.64

Lack of time 3.44

Lack of know-how 3.25

Challenges in content creation 3.22

Unclear ROI 2.92

Uncontrollability 2.86

Lack of money 2.75

Does not support the objectives of our business

2.44

Lack of technical support 2.39

Management resistance 2.03

Table 3. The Barriers to Digital Marketing Utilization by Firm Size - Small companies (Jä- rvinen et al., 2012.)

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As the previous research and Table 3 indicates, the main challenges for digital marketing adoption in SMEs are strongly related to human resources, time management and lack of knowledge (Järvinen et al., 2012). This can be caused by a strategic focus on different marketing channels because it seems like there is not enough time or human resources dedicated to focus on digital marketing efforts.

Lack of know-how is the third largest barrier which is concerning when considering the future ways of marketing and competitiveness of Finnish SMEs. This seems to highlight the phenomena that the marketing focus and strategy is not in line with digital channels, especially when considering that unclear ROI is also among the top five challenges for SMEs to utilise digital marketing (Järvinen et al., 2012).

On the positive side, the study indicates that management resistance is not a significant chal- lenge for small companies and on the technical side it seems like companies have adequate support functions (Järvinen et al., 2012). During this thesis, the focus if on the fast-growing international B2B startup companies that are around the same sized companies than this group indicated on Table 3. Therefore, the results should be comparable and will provide a better understanding about the differences of regional SMEs and fast-growing international B2B companies concerning the utilisation and adoption of digital marketing channels.

Digital marketing utilisation and the drivers of digital marketing usage was researched earlier by scholars (Taiminen & Karjaluoto, 2015) in Finland among SMEs. They found that certain key drivers influenced the usage of digital channels. The key drivers that were seen most important and influenced most on the digital marketing usage among SMEs are visible in Table 4:

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Reasons for digital marketing utilization by firm size (Taiminen & Karjaluoto, 2015).

3-20 employees Mean

Speed of communication 3.89

Better targeting of messages 3.68

Customer acquisition 3.65

Changing customer behavior 3.63

Building awareness 3.59

Enhancing customer service 3.52

Cost savings 3.47

Increasing sales to existing customers 3.08 Facilitation dialogue with customers 2.86

Table 4: Reasons for digital marketing utilization by firm size. (Taiminen & Karjaluoto, 2015). Scale anchored with 1 = not at all important and 5 = very important.

As seen from the Table 4, the speed of communication was the most critical driver for digital marketing adoption. Companies feel like adding digital channels will help them to communicate more effectively with clients or potential clients. Moreover, targeting of messages is also seen as one of the most influencing drivers. This relates closely to communication but on the quality side.

On the customer side, the acquisition of customers and the changing customer behaviour were relatively significant drivers (Taiminen & Karjaluoto, 2015). This means that companies were actively also looking to attract new customers and on some level also wanted to focus their approach to digital channels. Interestingly, building awareness was only seen as the fifth most important driver for digital marketing (Taiminen & Karjaluoto, 2015) whereas, on the research done earlier in Finland, SMEs viewed informing potential customers about the company and its services or products as the most crucial task for marketing (Reijonen, 2010).

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2.3 Technology adoption

Based on the previous research, two of the most often used adoption models that investigate and explain the adoption of new technology on an individual level are Attributes of Innova- tion Model and Technology Acceptance Model (TAM) (Asare et al., 2016). TAM model was originally introduced by Davis (1989) to understand the different factors that influenced the usage and acceptance of computers. However, TAM model has been tested and updated by scholars (Brown et al., 2002; Venkatesh & Davis, 2000;) to meet the demands of different research applications as well.

Furthermore, also Dholakia & Khestri (2004) researched the adoption of internet among companies and what were the relationships between the internal and external factors that contrib- uted to the usage of internet. They were researching two stages of adoption which were

“adoption” and “routinization” phases. They found out that prior technology use and competitive pressure influenced both two stages of adoption (Dholakia & Khestri, 2004).

Additionally, Grandon & Pearson (2004) studied the adoption of electronic commerce technology in SMEs in the US. They used the TAM model and could find four factors that influence the adoption of technology. These factors are visible in Table 4 below:

Four factors that influence the adoption of technology:

organizational readiness external pressure

perceived ease of use perceived usefulness

Table 4. Four factors that influence the adoption of technology (Grandon & Pearson, 2004.)

From these four factors, organizational readiness, perceived ease of use and perceived usefulness can be seen as internal factors when considering technology adoption. However, there

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are also external factors that influence technology adoption, and external pressure was recognised as one of them in the previous research (Grandon & Pearson, 2004).

In more detail, perceived usefulness can be described as a view or attitude towards new technology that would affect the results of work positively. (Davis 1989). Perceived ease of use would be associated with the view that describes how effortless adopting technology is seen (Davis et al., 1992). Additionally, external pressure is related to the indirect or direct pressure that is coming from for example competitors, other companies, industry or the government.

Lastly, organizational readiness relates to technological and financial resources to adopt E- commerce (Iacovo et al., 1995; Grandon & Pearson, 2004).

Previous literature about social media adoption also indicates that innovative B2B organisa- tions are more likely to adopt new technologies such as social media tools. (Michaelidou et al., 2011; Siamagka et al 2015). Furthermore, the research related to social media adoption in B2B companies recognised that organisational innovativeness and perceived usefulness have a positive impact on adopting social media channels in companies whereas perceived ease of use was not found to have a significant impact on the adoption (Siamagka et al., 2015). In relation, previous findings (Grandon & Pearson, 2004) Siamagka et al., (2015) found that external pressure from competitors or other stakeholders like customers or potential customers in- fluences the adoption of social media in a B2B company.

This literature review went through briefly first, the current situation of digital marketing research. Secondly, the relevant previous studies about usage and adoption of digital marketing channels or more specific digital channels like content marketing and social media as well as more general study about the challenges that companies have faced when going digital. Third- ly, all the digital marketing channels that are used in this research were defined and explained.

Lastly, I went through the enablers and barriers of digital marketing utilisation based on the previous studies as well as technology adoption studies which both will be used as a framework for analysing the challenges, barriers and enablers of digital marketing utilisation and adoption.

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3 METHODOLOGY

3.1 Context of the study

This study focuses on the digital marketing utilisation and adoption among fast-growing B2B startup companies in Finland. This research focus of startup companies is relevant because as the statistics from Finland show 98,9% of the companies in Finland in 2015 are either micro- companies with less than ten employees or small companies with less than 50 employees (Sta- tistics Finland, 2015.) Also, these micro- or small-companies were employing 47% of the employees in Finland (Statistics Finland, 2015). Therefore, even though all the micro- or small- companies do not meet the requirements of a startup that is defined before in this thesis, this study offers important and insightful information that could be beneficial for larger scale of companies operating in Finland.

For this research, I selected five companies to interview from the Tekes Young Innovative Companies (YIC) program (Tekes, 2017). Therefore, the companies must have an international focus, and they must have interest towards external funding. In addition to this, I wanted to focus on companies that are growing fast. Therefore, one of the criteria for selecting companies for this research was also their growth numbers between financial years of 2014- 2016. Furthermore, I wanted to also focus on B2B companies, so to be selected in this research, companies must be operating in the B2B field.

As the selection criteria for companies selected for this thesis is specific, the results of this study can be also seen as an accurate representation of the group of fast-growing international B2B startup companies in Finland. Although each company will represent a different case in the research, they also represent a similar group based on the criteria specified for this research.

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During the next paragraph, I will go through the qualifications of the Tekes YIC program.

Tekes YIC program offers funding for innovative and international startups that apply for the program and meet the criteria described below in Table 5:

Tekes funding may be a good option to your company, if you have:

Preconditions for funding

Tekes can offer YIC-funding only for a startup company that:

-a scalable business model and the opportunity for fast growth in international markets

-is less than five years old

-evidence of promising business activities and customer references

-is small and independently administered

-a clear plan to grow in international markets, and the capacity to implement the plan

-is making strong efforts in innovation activities

-a competitive edge with which it is possible to attain an important market position

-has not have distributed profits and not been formed through a merger

-a committed and competent management team

-the ability attract venture capital

Table 5: Tekes, YIC, 2017.

In addition to the selection criteria from Tekes YIC, I have selected fast-growing companies to be interviewed for this study. Fast growth means that there is a significant increase in the turnover during the last three financial years. From the five interviewees selected, two of the companies also qualified for the Deloitte Technology Fast 50 2017 listing, which was pub- lished in December of 2017 (Deloitte, 2017). This listing will take into account the turnover and growth among the last four years and list the companies based on the growth numbers. To be qualified for Deloitte Technology Fast 50, companies need to fulfil the following criteria:

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Deloitte Technology Fast 50 listing criteria:

1. It must be a technology company defined as one that:

Develops or owns proprietary technology that contributes to a significant portion of the company's operating revenues; or

Manufactures a technology-related product; or

Devotes a significant percentage of operating revenues to research and development of technology; or

Is technology intensive, or uses unique technology to solve problems.

2. Have base-year operating revenues of at least €50,000 and a current year operating revenues of at least €800,000.

3. Be in business a minimum of 4 years.

4. Have headquarters in Finland.

NOTE:

1. Using other companies' proprietary technology or intellectual property in a unique way does not satisfy this requirement.

2. Consulting companies, professional service firms, resellers, and others are not eligible.

Table 6. Deloitte Technology Fast 50 requirements. (Deloitte, 2017.)

In more detail, I selected the interviewees and companies from the YIC program (Tekes, 2017) with the following criteria:

1. They are selected to the program as a “B2B Software or Services” company (See. Tekes, 2017)

2. Their turnover has grown by over 100% between the years of 2014-2016.

3. They must be still active in business with their own company brand which has not been ac- quired by anyone else

4. They are operating in multiple countries and have international clients

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3.2 Methodological approach in this research

This research is done by using qualitative research method because I wanted to get an overview and understanding of the whole process of how digital marketing channels are utilised in fast-growing B2B startup companies in Finland and what are the enablers and barriers of digital marketing adoption. The qualitative research method is more suitable for this research than quantitative because qualitative research method is focusing on understanding and interpreta- tion whereas the quantitative method focuses more on statistical analysis, testing of hypothe- sis and explanation. (Eriksson & Kovalainen, 2008.)

Furthermore, the use of the qualitative method in this thesis is more suitable than the quantitative method of researching, because qualitative research method can be used better to describe the cultural meanings and phenomenon behind the research problem. Qualitative research methods are aiming at a holistic understanding of the research problem and issues (Eriksson

& Kovalainen, 2008.)

The research approach of this thesis is a case study, where five of the companies selected for this research represents a similar group of companies that are operating in similar circum- stances. Therefore, in more detail, the research approach in this thesis can be described as multiple case study. Multiple case study is a suitable method for this research as I am studying a case of digital marketing utilisation and barriers and enablers that influence the adoption of digital marketing channels in five different smaller sub-cases in my context of the research.

In case studies, research questions are related to solving and understanding of a particular case. Meaning, what is the case and what are the learnings when it has been studied (Eriksson

& Kovalainen, 2008).

The main difference between a single case study and multiple case study is that in multiple case study scholar is researching multiple cases and trying to understand the similarities and differences between the cases (Baxter & Jack, 2008). One of the advantages of using multiple case study method is that the results can be seen more reliable and strong (Baxter & Jack, 2008). Moreover, multiple case studies are often using several empirical data sources and therefore, can create a more convincing theory. (Eisenhardt & Graebner, 2007; Gustafsson, 2017).

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The subject of the study is suitable for the innovation management research field because first, startup companies are known for the innovative and sometimes even disruptive ideas and business models. Second, new technologies in digital marketing are invented all the time, and therefore, this technological side of the research will also be relevant for innovation management research.

3.3 Methods of data collection

The empirical data for this research was collected with five semi-structured theme interviews with five marketing decision-makers from fast-growing international B2B startup companies in Finland. The decision to use semi-structured theme interviews in this research is suitable, as it is essential to find out the underlying themes and background stories behind the phenomena, which otherwise may not have been possible with a more structured interview approach.

I used open-ended questions, so I could direct the interviewees toward specific themes that were on the focus of this research. Open-ended questions usually give the participant more control of the content of the interview and provide more detailed responses (Eriksson & Ko- valainen, 2008).

The interviewees were selected in a way that their responsibilities and job descriptions con- tain responsibility over the marketing strategy as noted previously. For the purpose of this research, it was key that the interviewees have a good understanding and relevant working experience in the marketing or business development department of the companies interviewed.

The data gathered from the five semi-structured theme interviews provided a sufficient and thorough data for this research. As my target group for this research was quite focused, the five interviews and the data gathered from those represent an adequate amount of data to investigate this case and to contribute to the existing literature of digital marketing utilisation and adoption. I prepared the interview questions and interview structure beforehand because my research question requires a thorough understanding of the themes that I am focusing on.

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The interview questions that I used can be found at the end of this thesis in Appendix 1. It should be noted, that although I had a precise order of questions, I did not go through them always in the same order, but instead tried to engage with the interviewees naturally and asked questions in a different order than in Appendix 1. However, similar questions were asked from each interviewee, only the order of the questions differentiated between the interviews.

The interviews were conducted between February and April 2018. The interviews with Com- panies 2,4 and 5 were conducted face to face whereas interviews with Companies 1 and 3 were done with online video meeting due to scheduling challenges and the location of the interviewees. All the interviews followed the same questions (Appendix 1) which were prepared beforehand. Interviews were conducted in both Finnish or English depending on the companies. Therefore, some of the quotes used in the interviews might have been translated from Finnish, and they represent the words from the interviewees as accurately as it was possible when translating sentences. I will go through the data collection process in more detail in the next chapter.

Table 7 displays the additional details about the interviewees. To protect the companies and their strategic views and business goals, this research has been conducted anonymously.

Therefore, the additional information of the interviews has only information like the title of the person, time and date of the interview, how these companies met the selection criteria and interview length.

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Additional information about interviewees

Company 1 Company 2 Company 3 Company 4 Company 5

Date 15.2.2018 8.3.2018 16.2.2018 11.4.2018 18.4.2018

Interview length

51:00 53:21 55:53 55:38 53:16

Title Head of Marketing (HoM)

Business De- velopment Director (BDD)

Chief Mar- keting Of- ficer (CMO)

Marketing Manager (MM)

Marketing Director (MD)

Selection criteria

1.Qualified for YIC Pro- gram (Tekes, 2017)

2. Turnover growth

>100% between the years of 2014-2016.

3.Qualified for Deloitte Technology Fast 50 listing in 2017.

(Deloitte, 2017)

2. Turnover growth

3.Qualified for Deloitte Technology Fast 50 listing in 2017.

(Deloitte, 2017)

1.Qualified for YIC Program (Tekes, 2017) 2. Turnover growth

2. Turnover growth

Table 7: Additional information about interviewees

3.4 Method of analysis, the process of analysis & evaluation of the methodology

All the five interviews were recorded with the permission from the interviewees. Then the recorded interviews were then transcribed to do the analysis effectively. I used qualitative content analysis as a method to analyse the transcripted interviews. Therefore, I wrote down notes from the transcripts and read the transcripts of the interviews through multiple times to

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find the themes, similarities and differences between the cases. The qualitative content analysis is suitable for this research as it allowed me to search and analyse the key themes.

As analysis framework, I used the themes that I went through in the literature review of this thesis. These themes guided the analysis and allowed me to analyse the utilisation of digital marketing channels as well as the barriers and enablers of the adoption to digital marketing channels. Overall, these key themes of digital marketing allowed me to investigate this subject thoroughly and analyse the utilisation and adoption of each digital marketing channel separately. This was a suitable analysis framework for this research as I could get a better understanding of the phenomenon.

After the analysis was ready, I wrote down the empirical chapter for this thesis. Firstly, by going through each company separately case by case and dividing the digital marketing channels and themes under own topics. Then I concluded the findings by finding similarities and differences among cases to and analysing the results of the whole target group together. The following chapter will go through the empirical analysis of this study.

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4 EMPIRICAL ANALYSIS AND THE RESULTS OF THE STUDY

The context of this research is a group of fast-growing international B2B startup companies from Finland. Therefore, to qualify for this research, companies must sell something to other companies, they have to have an international focus and international customers, they have to have substantial growth numbers, and they have to be qualified as a startup. More detailed definition of the term startup can be found on the introduction of this research. However, in this research to get qualified as a startup, all the companies selected had to either be actively involved or already finished Young Innovative Companies (YIC) program from Tekes (Tekes, 2017).

From the five companies interviewed, two of them also qualified for the Deloitte Technology Fast 50 (Deloitte, 2017) listing as one of the fastest growing technology companies in Fin- land. However, all the companies selected for this research have shown over three-figure growth (>100%) on their turnover between 2014-2016. Based on this, these five companies selected can also be seen as fast-growing companies in international B2B space.

During the next chapters, I will go through each company and interview in more detail based on the framework of digital marketing channels that was introduced earlier in this research on the Literature Review -chapter. Each interview is analysed first separately to understand each specific use case in more detail. However, at the end of the empirical analysis, there will also be conclusions about the research that include views and points from all the interviews to conclude the analysis of digital marketing utilisation and adoption among fast-growing international B2B startup companies in Finland.

4.1 Company 1

4.1.1 Context and background

Company 1 is a technology company established in Helsinki, Finland with facilities in five countries including Netherlands, United States, Germany, Finland, UK and Singapore. They have been in the market since 2012 and were able to tenfold their turnover in four years since

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that. Furthermore, Company 1 qualified for the Deloitte Technology Fast 50 (Deloitte, 2017) listing as an indicator of one of the fastest growing technology companies in Finland. They have also been part of Tekes’ Young Innovative Companies program and received external funding of over 4 million Euros.

Company 1 entered first in the Finnish market in 2012 but quickly wanted to go international after that. Hence, Company 1 started their first international operations in early 2013. Nowa- days they have an international team across multiple locations working towards international growth. They are mainly targeting European markets for marketing purposes and acquiring new customers. However, they do not yet have more targeted segments but rather at this point they see Europe as a primary market in which over 70% of their marketing efforts are focusing on. Other markets that they are also interested in the long run are North America, Asia &

Pacific (APAC) and Singapore.

For this research, I interviewed their Head of Marketing (HoM). He has been responsible for strategic marketing decisions and operational work for the last two and a half years at Com- pany 1. He oversees the marketing activities, and he has a team of three people with whom he works closely related to marketing. He has previous work experience in the Nordics as he is a Danish citizen who has been living and working in Denmark, Sweden and Finland during his work career.

4.1.2 Social media utilisation

When talking about social media as a marketing channel, HoM from Company 1 had an interesting approach. He mentioned that they do not use social media as a standalone marketing channel but rather see it as an extension of content marketing. HoM from Company 1 mentioned that they use social media mainly as a content sharing channel. This is quite interesting as previous research is often highlighting the two-way communication and customer feedback aspect of social media. (see, e.g. Taiminen & Karjaluoto, 2015). Hence, it can be said that Company 1 is seeing social media for them more like a one-way channel that can help to promote their content rather than a way of engaging with their customers.

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Company 1 also decided to focus on LinkedIn as a primary social media channel for them.

They evaluated that managing and optimising the usage of three different social media channels was too demanding, so they decided not to focus on Facebook or Twitter almost at all.

One of the main reasons they are not using Facebook or Twitter as a marketing channel is the difficulties to find the right audience from those channels as Company 1 is targeting specific, technical people and companies.

4.1.3 Search Engine Marketing (SEM) & Search Engine Advertising (SEA)

Paid marketing has also been something that Company 1 is focusing on now as they are trying to test and find scalable ways to boost their paid marketing. As paid marketing channels like Google Adwords offer good and profound reporting platform and metrics inside the tool, it has allowed Company 1 to experiment with different approaches and evaluate the results quickly. This is also one of the reasons why it has been easier to focus on the paid marketing side, as they can immediately understand the results, without the need of having to build an internal reporting tool or platform. On the technology adoption framework, this can be seen as a method of adopting the technology, because of the perceived ease of use (Grandon & Pear- son, 2004).

SEA continues to be in focus as Company 1 considers what they want to improve and benefit more from in the future. HoM from Company 1 mentioned that SEA campaigns are a must- have channel in their field as competitors are focusing on those as well. SEM & SEA adoption is then also influenced by external pressure as well.

4.1.4 Email marketing

Company 1 is also doing email marketing, and lately, they have been putting more emphasis on developing the messaging and optimising the effectiveness of their newsletter and email campaigns. At the moment though, only people who are receiving the newsletter from Com-