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IDC: Tech marketing budgets down 0.5%

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Technology marketing budgets will be down an estimated 0.5% this year compared with last year, according to International Data Corp.'s 2013 “Tech Marketing Benchmark Study,” released earlier this month. The 11th annual study was based on an online survey of 90 senior marketers at large technology companies, conducted between June 1 and Aug. 21. The respondents represent companies with average annual revenue of $9.1 billion. “Part of the decline might be due to efficiencies related to digital marketing—we are definitely seeing efficiencies happening with regard to automation,” said Kathleen Schaub, research VP-CMO Advisory Service at IDC, in an interview with BtoB. “We are also seeing a distinct shift in marketing between what we call the third platform and traditional marketing technologies,” she said. “Companies that are more in social, mobile, cloud and Big Data are moving ahead aggressively [with their budgets], while hardware companies are declining much faster in marketing spend than everyone else.” IDC projects that over the next 10 years, 90% of revenue growth at technology companies will come from the “third platform”—mobile, social, Big Data and cloud computing. For IDC, the second platform is LAN/Internet technology, client/server computing and PCs; the first platform is mainframe computing. This year, 63.0% of technology companies in the services sector plan to increase marketing budgets, and 59.0% of software companies plan to increase marketing budgets. Meanwhile, only 34.0% of hardware companies plan to increase marketing budgets, according to the survey. At the same time, 52.0% of hardware companies plan to decrease marketing budgets this year, compared with only 38.0% of services companies and 22.0% of software companies that plan to decrease budgets. The average marketing budget ratio (marketing spending/total revenue) is 1.9% this year. Software companies have an average marketing budget ratio of 3.9%, while hardware companies have an average of 1.9% and IT service providers have an average of 0.6%. Advertising, including digital, still makes up the bulk of marketing spend (28.3%), followed by events (19.6%), marketing support and sales tools (12.0%), direct marketing (10.4%), website (5.7%), branding and content (5.7%), market intelligence (4.8%), marketing automation (3.9%), PR (3.8%), social marketing (1.9%), analyst relations (1.1%) and other (2.8%). Over the next three years, the top marketing spending area for tech companies will be website development, with 44.0% of companies planning to boost budgets in this area. The No. 2 investment area is direct marketing, including email (41.0%), followed by marketing automation (35.0%), advertising, including display and search (31.0%) and social marketing (28.0%).
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