BtoB

Research studies find marketing budgets up

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B-to-b companies will increase their marketing budgets between 6.0% and 11.0% in 2006, according to studies from several research firms. Blackfriars Communications, a communications consulting and research firm, found that b-to-b companies plan to boost their marketing budgets by an average 11.0% in 2006.

Blackfriars interviewed 98 senior executives from a variety of industries, including b-to-b and b-to-c companies. One of the key findings was that b-to-b companies plan larger marketing budget increases than b-to-c companies, which expect to up their marketing budgets by an average 8% in 2006.

"Coming into 2005, we saw companies submitting an average 20% increase in spending for the year, but actual spending will be only half of that," said Carl Howe, principal at Blackfriars, pointing to factors such as higher gasoline prices and uncertain economic conditions, which influenced spending.

The Blackfriars study also found that companies that measure the performance of marketing plan to increase budgets by a much higher percentage than companies that don't measure marketing.

Those companies that measure marketing (66 out of 98) plan to increase their marketing budgets an average 13.0% in 2006, while those that don't measure marketing plan to increase their marketing budgets by only 2.0% in 2006.

The survey also asked executives what factors influenced their 2006 marketing budget changes. The most important variable was higher costs (cited by 13.0% of respondents), followed by economic conditions (12.0%), strategy change (6.0%) and competition (5.0%).

Other factors that influenced marketing budget changes were change in revenue/demand (5.0%), fuel prices (4.0%), marketing ROI (2.0%) and natural disasters (2.0%).

In the technology area, IT companies are expected to increase their marketing budgets by 6.5% to 7.0% in 2006 over 2005, according to research company IDC.

The projection was based on interviews with 95 senior marketing executives at technology companies, conducted by IDC's CMO Advisory Research service for its recent report, "Planning Your 2006 Marketing Budget."

In 2005, technology companies are expected to increase their marketing budgets by 6.4% over 2004 spending, IDC found.

"In terms of the marketing mix, the trend will continue to be away from mass media broadcast marketing toward more targeted, one-on-one channels," said Rich Vancil, VP-CMO Advisory Research at IDC. "Instead of major, big-tent events, tech companies will use smaller, more `propriety' events. Instead of broadcast advertising, they will use more targeted, online advertising."

Vancil also said tech companies will invest in people and infrastructure to build more accountable marketing organizations.

"There is going to be more investment in software to pull together data from multiple sources, whether that's packaged MRM [marketing resource management] software or home-grown dashboard development," he said.

One of the key areas of marketing spending in 2006 will be online marketing. According to the Interactive Advertising Bureau's latest Internet Ad Revenue Report, conducted by PricewaterhouseCoopers, online advertising totaled $3.1 billion in the third quarter, up 33.9% over online ad spending in the third quarter of 2004. For all of this year, online ad revenue is expected to top $12.0 billion, up 25.0% from $9.6 billion in 2004, the IAB said.

Also, according to a study of 867 senior b-to-b marketers conducted by Forrester Research for American Business Media, 48.7% of respondents said they currently use online marketing, and 54.6% said they plan to use it by 2008.

The ABM study also found that 60.2% of b-to-b marketers currently use in-person events, and 60.8% plan to use in-person events by 2008.

Other media and marketing vehicles expected to see increased use by b-to-b marketers between 2005 and 2008 include trade magazines (from 45.4% to 48.3%), TV (from 41.4% to 44.1%) and public relations (from 37.7% to 41.6%), the study found.

Media and marketing channels expected to see a decline between 2005 and 2008 include direct mail (from 56.2% to 48.7%), newspapers (from 46.9% to 35.6%), printed newsletters (from 43.5% to 35.1%) and general business publications (from 41.3% to 38.6%). 

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