BtoB

Marketing priorities, plans include boosting budgets

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The year 2006 will be a strong one for b-to-b marketing, with increased budgets, significant growth in online marketing and the launch of new ad campaigns, according to BtoB's "2006 Marketing Priorities and Plans" survey.

The online survey of 366 senior marketing executives, conducted during the last week of November and the first week of December, found that 60.7% will be working with bigger budgets in 2006; 31.6% said their budgets would be flat; and only 7.7% said their budgets would decrease.

Last year, in BtoB's "2005 Marketing Priorities and Plans" survey, 49.7% of respondents said they would have bigger marketing budgets, 36.3% said their budgets would remain flat and 14.0% said their budgets would be lower.

Of those marketers that plan to boost marketing budgets next year, 28.4% said they plan to increase their budgets by between 10% and 14%; 18.0% said they plan to boost budgets by between 5% and 9%; and 11.3% said they plan to increase their marketing budgets by between 15% and 19%.

Oracle Corp. plans to increase its overall marketing budget by about 10% in 2006, said Todd Forsythe, VP-marketing at Oracle. He said the company intends to increase its print advertising but will decrease direct mail and online banner advertising in favor of new forms of online marketing such as Webcasts and blogs.

In 2006, 72.0% of marketers plan to increase online budgets. Within Internet spending, the specific media that will receive the greatest share of marketers' online budgets in 2006 will be Web sites (30.3%), e-mail (22.0%), search (20.3%) and sponsorships (10.3%), the survey found.

Banner advertising will make up only 5.4% of the total online budget.

For offline media, 52.0% of respondents said they plan to increase direct mail in 2006, 40.0% plan to increase event marketing and 33.0% plan to increase print advertising.

Not much change in broadcast spending

The survey also found that 81.0% of marketers plan no changes in their broadcast spending, 80.0% will not change outdoor spending and 46.0% plan no changes in their print and event marketing budgets.

Some marketers plan to decrease spending in certain areas. The survey found that 21.0% of respondents will decrease print advertising, 15.0% will reduce outdoor advertising and 14.0% will decrease events and telemarketing spending.

DHL, a German-based shipping company that launched a rebranding campaign in the U.S. in early 2004, will continue to use broadcast advertising in 2006, said Karen Jones, VP-advertising, brand and promotions at DHL Express USA.

"Television always gives us the biggest bump in overall unaided brand awareness, especially for a brand like ours that hasn't been in the marketplace for a long time," Jones said.

However, she added, "TV will probably stay flat in 2006, because it's such an expensive medium."

Jones did not disclose DHL's overall marketing budget for 2006 or specific media budgets. Last year, DHL's rebranding campaign was estimated at $150 million.

DHL will probably double its online spending in 2006 and will also increase direct marketing, she added.

Direct Marketing will grow

According to BtoB's survey, an average 24.9% of marketers' total budgets will be spent on direct marketing in 2006, up from an average 21.6% allocated to direct marketing this year.

When asked what their primary marketing goal will be in 2006, 60.0% of respondents said customer acquisition, 20.8% said brand awareness, 11.5% said customer retention and 7.7% specified "other."

Other primary marketing objectives identified were entering new markets, generating leads, increasing revenue, growing market share and proving ROI.

John Beering, director of marketing for Pratt & Whitney's Commercial Engines and Global Service Partners, a division of United Technologies Corp., said his marketing objective in 2006 is brand awareness.

In November, Pratt & Whitney debuted Global Service Partners, a rebranded business that provides commercial aftermarket services in aerospace, engine and material services for airlines and other service providers.

"Brand awareness is No. 1, both on the services and OEM side of the business," Beering said.

"Second would be supporting sales in terms of customer engagement—both customer acquisition and customer retention."

To raise brand awareness, Pratt & Whitney will continue to use trade advertising in 2006, Beering said. He said spending on trade advertising will be flat, although it increased significantly in 2005 with the brand relaunch.

Pratt & Whitney's overall marketing budget will increase in 2006, although the greatest boost will go toward people rather than programs. The division will also use events and sponsorships next year, Beering said. "In our markets, TV doesn't make any sense," he said. The company is just beginning to explore online.

Nancy Bhagat, VP-sales and marketing and director of direct marketing at Intel Corp., said Intel is not planning any TV spots to reach the business audience for now, but it will continue to use print and online in 2006. She did not disclose spending plans.

The primary marketing objective in 2006 will be to raise awareness of Intel's role in helping companies drive business success, Bhagat said.

It will continue to launch new executions of its new enterprise campaign, "When Intel Is Built In, Success Is Built In," which was launched last month.

BtoB's survey found that 69.8% of marketers plan to introduce new ad campaigns in 2006. 

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