Marketing budgets are up an average of 8.9% this year compared with 2003, according to a new report by Blackfriars Communications, a Maynard, Mass., marketing consulting and research firm.
The report, "The State of Marketing 2004," includes the Blackfriars Marketing Index, a new quarterly measurement designed to be a benchmark for overall marketing spending.
The Blackfriars Marketing Index for the first quarter is 119, which indicates average marketing expenditures during this quarter will be 119% of the average quarterly marketing expenditures in 2003.
The report was based on interviews with 100 senior business executives in early January. The executives were asked how much they plan to spend on marketing, where they will spend and how they will measure marketing performance.
"We are looking at providing a benchmarkâa single number that gives people a quick look at how they are doing against the broad market," said Carl Howe, principal at Blackfriars.
While advertising and marketing spending data do exist in various forms, from TNS/CMRâs quarterly ad spending reports to IDCâs annual Tech Marketing Barometer, there has not been a quarterly index that tracks marketing spending data at a high level as reported by senior business executives.
Data at the highest level
"Executives like to see benchmarking data at the highest level," said Michael Gerard, director of CMO Advisory Research at IDC. "In the marketing benchmarking area, there has not been a lot of it."
IDCâs research focuses on hardware, software and services, as opposed to broad marketing spending.
According to the Blackfriars report, companies will spend 27% of their 2004 marketing budgets in the first quarter.
"Companies are trying to get out of the gate fast and capitalize on the upturn," Howe said.
The report also found that advertising will capture the largest share (31%) of companiesâ marketing budgets this year, followed by Web site development (17%) and events (15%). Other marketing areas that will receive funding include public relations and analyst relations (10%), collateral (6%) and concept testing (6%).
The survey also examined the measurement of marketing performance and how it affects companies. Fifty-seven percent of the companies that responded now measure the results of their marketing efforts, with resulting benefits.
Companies that measure marketing results increased their annual marketing budgets an average 11.2% this year, while companies that donât measure marketing results increased their budgets by only 6%.
Also, 23% of executives at companies that donât measure marketing performance said they were dissatisfied with marketing efforts, compared with only 9% of executives at companies that do measure performance.
The report also looked at how important marketing is considered at companies.
Eighty-two percent of respondents agreed or strongly agreed that marketing is important to their company, and 73% agreed or strongly agreed that marketing is the public face of corporate strategy.
However, 71% of respondents agreed or strongly agreed that marketing is primarily a way to generate leads, indicating that a majority of executives still see marketing as a tactical function, the report found.
While marketing is considered important, only 37% of companies said they have a VP of marketing or a chief marketing officer.
The Blackfriars survey was conducted online between Jan. 8 and Jan. 15, among executives with titles including CEO, president, senior VP and director. Businesses ranged in size from small to large enterprises, with average revenue of $280 million a year.
The Blackfriars Marketing Index will be released each quarter. It will be calculated by comparing the projected spending for the quarter to average quarterly spending the previous year.