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Budgets looking up heading into 2010

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While b-to-b marketers have slashed budgets this year in response to the economic downturn, about half say their budgets will be up in 2010, with an upswing beginning in the second half of this year, according to a study by BtoB. The study was based on an online survey of 495 b-to-b marketers, conducted between May 14 and June 2. Download the full study results The study updated BtoB's “2009 Marketing Priorities and Plans” report, which was based on an online survey of 211 b-to-b marketers conducted in December. The new report found that 43.7% of marketers will decrease their marketing budgets this year in response to the downturn. This figure is up significantly from December, when only one-quarter of marketers said they planned to cut their marketing budgets this year. Of those cutting budgets, 23.4% said they would be down by more than 30%. However, despite the recession, 26.1% of marketers said their marketing budgets are up this year. This figure was down from December, when 31.1% of marketers reported their budgets would be up in 2009. Of those increasing budgets this year, 31.1% said they would be up between 10% and 14%. Looking ahead to next year, 53.0% of marketers predict their marketing budgets will be up over this year; 36.7% said they will be flat; and only 10.3% said their budgets will be down. Spending is expected to start improving in the second half of this year. According to the survey, 32.3% of marketers said their budgets will be up over the first half; 21.4% said they will be down; and the rest said they will remain unchanged. Jim Prothe, marketing manager at Model Metrics, a CRM systems integrator, said his marketing budget is flat this year compared with last, but spending will be up 30% in the second half over the first half and will also be up next year. “We really didn't face any significant budget cuts this year, but there is much more scrutiny placed on what we're spending on and what we're getting for it,” he said. One area in which Model Metrics is increasing its marketing spending this year is events, with its biggest—Salesforce.com's Dreamforce User and Developer Conference—coming up this fall. “The economy does have an impact to a degree,” Prothe said. “From a marketing perspective, we have to report on a lot of different metrics—number of leads, cost per lead and number of opportunities from leads. Those conversations happen after each event.” He said the company is also increasing its online spending this year. BtoB's updated survey found that 65.7% of marketers will increase their online spending this year; 31.6% will boost spending on direct mail; and 26.0% will increase event spending. Within online marketing, 63.8% of respondents will increase spending on Web site development; 61.6% will increase e-mail marketing; 49.5% will increase search; and 46.2% will increase social media. For the second half of the year, the media mix will remain mostly unchanged for the majority of marketers, although 49.2% said they would be increasing their online spending over the first half. Within online, the categories seeing the biggest spending increases in the second half will be Web site development (cited by 43.5% of respondents), e-mail marketing (44.1%), social media (35.2%), search (33.0%) and webcasts (24.5%). However, not all companies are making a bigger push into online. Some are reverting to more traditional media, such as print advertising and direct mail. Allied Insurance Brokers, which sells insurance to businesses, increased its marketing budget between 5% and 9% this year over last. The company, which formed a marketing department just three years ago, is still evaluating which programs work and which are not working so well. “Everyone is doing e-mail campaigns, and people's e-mail boxes are getting loaded down, so we are going back to using direct mail a little more,” said Shelley Rushe, director of marketing at Allied Insurance Brokers. She said the company is also doing print ads in local markets this year, after doing no print advertising last year. Overall, spending in the second half will be unchanged from the first half, she said. One online area in which Allied is increasing its investment this year is webcasts, Rushe said. “We are doing more webinars this year, and we are starting to see an increase in people attending,” she said. Other marketers are cutting their budgets in response to decreased spending from clients. RAE Systems, which manufactures chemical and radiation monitoring equipment for government and industrial markets, cut its marketing budget between 10% and 14% this year as the economy worsened. “Our customers are only buying what they have to, not what they want to,” said Bob Durstenfeld, senior director of corporate marketing at RAE Systems. “Our target audience includes state and municipal governments, and a lot of states are in deficit now.” To adjust, RAE is cutting back the number of events it attends this year from more than 50 to about a dozen. It is also being more selective in its trade advertising, focusing on new products and not as much on brand advertising. One area in which it is increasing spending is online, with the planned launch of foreign-language Web sites and experimentation with YouTube videos in the second half.
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