Companies are spending $73 billion to sell their goods and services to other businesses, with spending among companies with $100 million-plus in sales/revenue up 14.5%, according to a newly released study from Business Marketing
The OutFront II Marketing Research Study, conducted by Erdos & Morgan, New York, is the second survey in a benchmark effort by Business Marketing to capture the scope of business-to-business marketing communications in the U.S.
"OutFront II takes us to the next level in measuring the business-to-business arena," said Business Marketing Editor Karen Egolf. "This is the only study that measures just the only study that measures how much money is being spent on b-to-b marcomm efforts. The rapid growth in this area over the past few years makes this data invaluable."
The OutFront II Marketing Research Study measured 1997 marcomm spending for U.S.-based businesses with sales/revenue of $50 million and more. It expands on the base established by OutFront I, which looked at 1995 b-to-b spending for $100 million-plus companies.
The study measures how 25 industry clusters divide their b-to-b marketing budgets among such tools as advertising, sales promotion, direct marketing, trade shows and online. It also breaks out spending by company size.
Among the highlights of the OutFront II study:
Manufacturing was the leading industry cluster in spending. While companies in this category represented one-third of those studied, they spent $33 billion, or about 45% of all b-to-b marcomm spending.
Advertising was the top-ranked tool, replacing sales promotion, which was No. 1 in OutFront I. Advertising drew $17.7 billion, or 24.2% of total b-to-b spending, with trade press getting almost one of every three ad dollars. Sales promotion dropped to second place, with $13.7 billion (18.7%), and trade shows moved into third place, with $12.6 billion (17.3%).
Overall, online saw the most growth. Among companies with sales/revenue of $100 million-plus, online drew $3.4 billion, up 143% from $1.4 billion in 1995. Other high-growth categories were trade shows, which grew 81%, from $5.5 billion to $10 billion, and sales promotion, which grew 70%, from $6.3 billion to $10.7 billion.
On average, companies were devoting 1.2% of their total sales volume to b-to-b marcomm. For companies with sales/revenue between $50 million and $99.9 million, that grew to 1.8%; for companies with sales/revenue of $2 billion-plus, the figure dropped to 0.3%.