Everyone talks about the decline of b-to-b and technology ad spending, but no one does anything about it.
IDC, the research unit of International Data Group, is trying to change that. It recently launched the CMO Advisory Service, an effort to aid marketers coping with the shifts that followed the bursting of the tech bubble. The CMO Advisory Service will offer benchmarking, return on marketing investment data and best practices information.
"High-tech marketing is very different today," said Cliff Conneighton, CEO of Conneighton Group, a marketing consulting firm. "Whatever people learned in business school or in a job three years ago is pretty much useless. The economy has changed, and that has affected high-tech marketing. Itâs all about the numbers. Itâs all about proving every dollar spent yields more than a dollar in return."
The CMO Advisory Serviceâs first project, a survey of tech marketers, supports Conneightonâs assertion. IDC surveyed 90 tech marketers at companies with a combined $90 billion in revenues and $4 billion in marketing expenditures. Although the study indicated that marketing budgets had stabilized, it revealed dramatic shifts in how that money was being spent.
Primarily, the money was moving toward short-term, easily measurable tactics. According to the survey, 30% of respondents were increasing spending on the Web, and slightly more than 20% were boosting expenditures on direct marketing. Meanwhile, more than 20% of respondents said they were decreasing traditional advertising spending; a similar number said they were cutting spending on events.
Similarly, nearly 80% of respondents ranked "lead generation" as a top marketing support initiative for 2003, but less than 60% gave "branding and identity" the same importance. Nearly half of the respondentsâ47%âsaid the primary measurement of marketingâs effectiveness was either "sales" or "leads." Just 3.4% said the primary measurement was "awareness."
Further proof of this shift in marketing priorities (from the branding mania of the dot-com era to the sales-focused mantras of today) is evident in the Business Information Network numbers compiled recently by Competitive Media Reporting for American Business Media. The figures show that both computer and software ad expenditures declined more than 17% in 2002 compared with 2001.
For Rich Vancil, the CMO Advisory Councilâs VP-technology marketing research, this information is troubling. A former marketing executive at Dataquest, Individual Inc. and Tilion, Vancil said that while marketing departments focus on short-term ROI, they are ignoring another key responsibilityâbranding. "I know a lot of marketers feel that theyâve been pulled off their broad charter," Vancil said.
Initially, the benchmarking data may be the most appealing part of the CMO Advisory Service to marketers, Vancil added, because it will allow them to compare their own companyâs marketing expenditures with those of other companies of similar size and in the same market.
Tom Stein, CEO of agency Stein, Rogan + Partners, a member of the Interpublic Group of Cos., said the benchmarking aspect could offer significant value. "If the benchmarking is done on a thorough and comprehensive basis, where you can look at the data on a relatively high level and you can drill down to specificsâlike if youâre selling wireless network sensorsâthat kind of benchmarking would be terrific."
But Stein questioned the value of CMO Advisory Serviceâs intention to measure return on marketing investment. He said too many ROI measurement tools have failed to take into account total marketing expenditures and how different elements of marketing, from branding to direct mail, relate to each other. "Often, measurement doesnât look at things holistically," he said.
Al Ries, chairman of branding consultancy Ries and Ries Inc., said the focus on measurement merely shows marketingâs inferiority complex. "That marketing people place this emphasis on measurement represents an insecurity among marketing managers," he said. "You donât see the head lawyer say: âWeâve got to go measure the effectiveness of our legal work.â "
Ries added: "If you spent $10 million, and management canât see the value of that $10 million, then maybe youâre not spending it right."