In an unusually candid keynote presentation at the annual Business Marketing Association conference last month in Las Vegas, Judith Sim, senior VP-CMO of Oracle Corp., revealed how the company has achieved increased return on investment with a declining marketing budget.
“Our marketing budget has been going down every year for 10 years,” Sim said, pointing to a budget that is currently 1.7% of the company's total revenue compared with more than 5% a decade ago. Oracle believes in doing more with less.”
One of the most significant changes is Oracle's drastic cutback in print advertising, which next year will account for only 9% of its ad budget (going almost exclusively to The Wall Street Journal
) compared with 22% this year and 55% last year.
Oracle is increasing its online advertising, which this year accounts for 36% of its ad budget, compared with 22% last year.
It is also increasing its airport advertising, which this year makes up 29% of its total ad budget, up from 18% last year.
Oracle is decreasing the number of events it produces (this year it will produce 6,623 events, down 4% from last year), but it is achieving a higher return on those events.
In fiscal year 2008, which ended May 31, more than 347,000 attendees participated in Oracle events, up 10% from the previous fiscal year. Events were linked to 56% of total won deals in fiscal year 2008, and the average deal size was up 149% compared with the previous fiscal year, Sim said.
“It is all about physical interaction in our business,” she said.
Sim also discussed Web 2.0 tools Oracle is using for marketing, including podcasts, user forums and social media.
About a year ago, the company started issuing social news releases instead of traditional press releases. The social news releases contain shorter, bulleted points and links to online resources, such as online videos, URLs and blogs.
The use of social news releases has cut Oracle's PR budget in half, realizing cost savings of $4.6 million over the past year, Sim said.
She also noted that she became concerned when she noticed that the number of hits on Oracle's home page had declined 4% over the past couple of months.
However, after checking with industry sources, she learned that decreased traffic to corporate home pages is becoming an industry trend, driven by the migration to community-driven forums.
While traffic to Oracle's home page has declined recently, the number of users on Oracle's discussion forum has increased 22%, with 94% more postings.
“It's all about site stickiness,” Sim said. “More and more people are staying for a longer period of time because of Web 2.0 technology. It's working, but you have to track it in a different way.” —Kate Maddox