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Outlook 2007

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OUTLOOK 2007
Marketers' influence grows even as customers demand more control of the message
Online Advertising continues phenomenal climb
Budgeting for 2007
Marketing Plans and Priorities for 2007
Marketer Roundtable
 

Marketing will get a big boost in 2007 as b-to-b marketers increase overall budgets, shift more dollars to online and try out new technologies, according to BtoB's "2007 Marketing Priorities and Plans" survey. 

B-to-b marketers' primary goal next year will be customer acquisition (picked by 62.3% of survey respondents), followed by brand awareness (19.5%) and customer retention (11.0%). Other goals (7.3%) include new market growth, product penetration, research and positioning the company as a thought leader.

BtoB's survey of 569 marketing executives was conducted online during the last two weeks of November. It found that 62.7% of respondents plan to increase their marketing budgets in 2007; 29.4% said they will keep them flat; and 8.0% said they plan to decrease them.

In last year's survey regarding plans for 2006, 60.7% of marketers said they planned to increase their marketing budgets; 31.6% said their budgets would remain flat; and 7.7% said their budgets would be lower.

Of those marketers that plan to boost their marketing budgets next year, nearly one-third (31.6%) said they plan an increase of 20% or more; 26.3% said they plan to increase their budgets by between 10% and 14%; 19.6% said they plan an increase of between 5% and 9%; 11.5% said they plan an increase of between 15% and 20%; and 10.9% said they plan an increase of less than 5%.

The biggest boost will be seen in online marketing, with 75.6% of marketers planning to increase their online budgets in 2007, the survey found. Last year, 72.0% of marketers said they planned to increase online marketing spending.

"We track how our customers consume business information closely and have found that they are evolving their preferences as innovative new capabilities hit the mainstream," said Scott Anderson, director of enterprise brand communications at Hewlett-Packard Co. "With broadband availability, adoption of social media, the mobile work force and a number of other trends, times are clearly changing, and we're responding in kind."

Beginning last year, HP made a "fairly significant" shift from traditional broadcast and print advertising to online marketing, Anderson said. He declined to disclose HP's marketing budget or specific budget shifts.

HP is now regularly using webcasts, online video, blogs, podcasts, RSS and online communities to launch new products and develop ongoing relationships with customers.

According to BtoB's survey, Web site development will get the largest share of the online marketing budget (31.7%). Other media that will get a significant share include e-mail (21.8%), search (18.7%) and webcasts (8.8%). Banner advertising will receive only 5.9%, while sponsorships will make up 5.5%.

A new and growing medium, online video, will receive 2.7% of the online marketing budget next year, according to the survey.

Other online tools, which will make up 4.9% of online spending, include blogs, RSS, product listings and lead generation programs.

Marketers also plan to increase spending on certain offline marketing channels in 2007.

According to the survey, 50.2% of marketers plan to increase spending on direct mail next year, and 44.1% said they plan to hike spending on events.

ITT Corp., an engineering and manufacturing company, is a big believer in events.

"Events are a key component of our corporate marketing strategy," said Tom Martin, a spokesman for ITT, which manufactures electronics components, fluid technology systems, and motion and flow control products. "We have limited marketing budgets and have to use them wisely."

ITT's marketing budget will be flat in 2007, and the company will primarily use trade print ads, online marketing and events to get its messages out, Martin said.

"We came to the conclusion a few years ago that generic print advertising was not reaching our targets efficiently," he said. "We have had significant success with our strategy of identifying key industry trade shows and conferences, and projecting a dominating ITT presence."

Working with its ad agency, Doremus, New York, ITT has created unique media opportunities at trade shows to project a strong corporate presence. For example, it built an ITT-branded water fountain that it displays outside fluid industry trade shows, placed a 60-by-18-foot three-dimensional banner at the entrance to the Aquatech water industry convention in Amsterdam and wrapped buses with ITT advertising at the National Space Symposium in Colorado Springs, Colo.

According to BtoB's survey, offline media including print, broadcast and outdoor advertising will not see big increases in spending next year.

Only 33.6% of marketers said they plan to increase spending on print advertising in 2007, while 46.7% said they plan no changes, and 19.7% said they plan to decrease print advertising.

Only 13.5% of marketers said they plan to increase spending on broadcast next year, while 77.5% plan to keep spending the same, and 9.0% said they plan to decrease broadcast spending.

Just 4.8% of marketers plan to increase spending on outdoor advertising in 2007, while 83.8% plan to keep outdoor budgets flat, and 11.4% plan to decrease outdoor spending next year.

The survey also found that 67.7% of advertisers plan to launch new ad campaigns in 2007.

Dow Chemical Co., for example, will continue its "Human Element" campaign, which debuted in 2006, and will expand into new regions, including Europe and Asia-Pacific.

The survey also asked marketers to rate their relationships with ad agencies and media partners.

When asked how they would rate their ad agency in terms of willingness and capacity to tailor programs to meet marketing goals, 61.1% of marketers said "OK," 33.5% said "excellent," 3.8% said "poor" and 1.5% said "unacceptable."

When asked to rate their trade media partners in terms of willingness and capacity to tailor programs to meet marketing goals, 68.6% of marketers said "OK," 22.5% said "excellent," 8.3% said "poor" and 0.6% said "unacceptable."

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