Dynamic changes are taking place in how companies spend their IT dollars. And that means marketers must make dynamic changes, too.
Forrester Research predicts that U.S. spending on information technology will reach $785 billion in 2005, up 7.1% over last year's $733 billion. This includes a major increase in spending from both the enterprise and small and midsize (SMB) business segments. In fact, Forrester said, it expects the gap in spending between enterprise and SMB spending to narrow significantly, with SMB accounting for almost 48% of all IT spending.
"Not only is this market segment 40 times larger than the 1,000 companies in the Fortune 1,000, it's where IT purchasing rates are growing most rapidly," said Greg Strakosch, CEO of TechTarget. This April, TechTarget launched media and events targeting midmarket CIOs under its CIO Decisions brand.
Targeting IT pros at smaller companies, however, comes with some caveats, said Matt Duffy, VP-marketing at IDG's Computerworld. "The research we've seen shows that while midsize businesses are certainly stepping up to the plate in their IT initiatives, smaller businesses individually still have so little money to spend on IT that they behave very differently than their larger counterparts," he said. "A recent study we fielded showed small companies-fewer than 100 employees-only have $55,000 budgeted for CRM initiatives versus $3 million for companies with 1,000 or more employees."
Another shift is that IT professionals can no longer be lumped by marketers into one big group-there are a reported 11 million of them in the U.S. work force. "IT pros typically think of themselves not as an IT generalist, but in terms of the focus of their jobs, for example, networking, security or storage," Strakosch said.
Duffy said he believes that targeting specialties is better geared for marketers aiming at lower-level IT staff. "B ut most of Computerworld's higher-level audience is responsible for all areas of IT," Duffy said. "You can't look at just storage and not put it in the context of all the other technologies that surround it-hardware, software, security and so on." But it is still advantageous, he added, for marketers to get a topic-specific message in a topic-specific content area.
Changes in spending
Changes aren't just happening in terms of who's spending money on IT but also in how they are spending it. Virtually every purchasing decision is now tied to ROI, said Daniel Greenberg, VP-worldwide marketing and product management for Macrovision Corp.
"CIOs are no longer just technologists, but increasingly very savvy businesspeople who are excellent at conducting ROI analysis for their organizations," Greenberg said.
Bud Hyler, senior manager for business consultancy BearingPoint's Commercial Services practice, echoed those beliefs. "Anything that impacts the business impacts the IT professional," he said. "The real challenge for IT professionals is transitioning from making IT decisions based on IT impact to decisions driven by business impact."
Perhaps the most important area where IT departments are making investments is in products that help with Sarbanes-Oxley compliance in public companies and HIPAA in health care, said Mike Kisseberth, senior VP-sales for CNET Networks.
Network and corporate security are also a major concern, Kisseberth said. "However, our August IT Priorities research shows reactive security projects losing importance to structural change, like Web Services and improved IT management," he said. "In the years we've been doing the research, this is the first time security was not a top five concern." He speculated this could be a result of security increasingly being "baked into" the functions of IT management.
So where and how can marketers best reach and engage IT professionals?
Online should almost always be part of a marketer's pitch to IT pros, industry experts agreed. "IT professionals are highly wired, always online, always accessing e-mail," Greenberg said. "These are useful communications channels if you can avoid being perceived as spam."
The CMO Council and KnowledgeStorm recently released a survey dubbed "Define What's Valued Online" that explored online technology content's influence on IT buying. Some interesting findings from more than 1,400 respondents included:
Nearly 90% of respondents said that online content has a moderate to major impact on vendor preferences and selections.
The No. 1 pet peeve for technology content was "hype and puffery of offering"; No. 2 was "poor communication of business value proposition"; and No. 3, "too few proof points that evidence ROI."
Vendor white papers were the most popular type of technology content read and shared with peers. Product reviews and analyst research reports were also popular.
There's no doubt that IT professionals rely on the Web as a source for prepurchase research, Strakosch said. "They seek out sites that offer a depth of content in their areas of specialization and, in the process, are exposed to messages from marketers," he said. "That's one reason why Webcasts and white papers have proved to be highly effective in increasing vendor consideration and purchase intent."
Smart marketers regularly incorporate these online tools into their campaigns, using them to capture qualified leads and then move their audiences further along in the decision-making process, Strakosch said.
Leading print properties with strong online presences can offer marketers fully integrated campaign opportunities, Greenberg said. "Publications like CIO, InformationWeek, eWeek and Computerworld are widely read throughout the IT community and wield great influence in educating the market about new technologies and solutions to everyday technology problems," he said. "Developing relationships with those media and appearing regularly in them can go a long way to building a credible brand and market position, and generating leads."
Print continues to have a role, too, Duffy said. "While online has grown tremendously as a source, we still see the higher-level IT executives also rely on print publications as a way to dig deep into IT news. We also have seen that though IT professionals have become busier, they are less likely to go to big trade shows but have become very engaged by more intimate conferences."
"It might sound basic, but the best results happen when media and marketing strategists put themselves in the shoes of the IT professionals they are trying to reach," Kisseberth said.
"What IT professionals-especially those at senior levels-trust most are messages coming from their peers," Duffy said. That's why involving respected IT executives in the editorial content, whether it be quoting them in stories or having them speak at events, is a smart strategy for media outlets, he said. Marketers should likewise tap their clients' IT executives to be part of their messaging, especially case studies, he added.
The greatest challenge for b-to-b marketers may be nurturing a relationship with a prospect through a long sales cycle and finding the most valuable time to bring the salesperson into the picture, Kisseberth said. "A campaign will need to run over many quarters before the marketing and sales team can evaluate how to fine tune it to make it more efficient."