BtoB

Rounding out the picture drawn from OutFront II

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Having just spent the past two months or so with the OutFront II study, I have to confess: I have a whole new respect for b-to-b marketers who deal with research projects routinely. Even with the executive summary by the project's research company, Erdos & Morgan, the data on 1997 b-to-b marketing communications spending, and the comparison with the 1995 data of the first OutFront study, still looked insurmountable as I approached it -- and that volume of material never seemed to diminish. No, overall, for a person most comfortable dealing with words, this project was not fun. Fascinating, definitely, but most certainly not fun. That's not to say the information was ponderous or the results mundane -- just the opposite. OutFront II offered an overabundance of data, and it was easy to wander off on factual tangents when we were really trying to dig out the basic numbers that serve as the foundation for the project. So what you have in the special section starting opposite Page 18 is a report on the main elements of the study -- how much marketers are spending and what they're spending it on. Overall, U.S. companies put $73 billion into selling their goods and services to other companies in 1997. The average marketer had a budget of $10 million and spent 1.2% of the company's total sales trying to boost its b-to-b effort. For most major industry categories, the bulk of the money went into advertising, primarily trade publications, followed by sales promotions, particularly collateral materials and catalogs. Marketers across the board boosted their online spending -- one of the few figures that remained consistent in size no matter what the company's sales. Speaking of size, we expanded the study this go-round. In OutFront I, we looked only at companies with sales/revenue of $100 million-plus. This time, we included companies with sales of $50 million to $99.9 million to give a broader and more realistic picture of b-to-b marketing spending. And yet, while all these numbers offer a solid look at the state of b-to-b marcomm spending, they don't tell the whole story. With so much data to choose from, I found myself second-guessing our choice of information throughout the project. The amount of material vs. the available space to print it was aggravating at best, and put a huge damper on my normally cheerful disposition. (Or, as I told one editor when asked if I had written my editorial on OutFront yet, "No, and you don't want to know what I think of the OutFront study right now!") While I am, at last, satisfied with the final report in this issue, a few details still nag. So, to give you a more complete look at the state of b-to-b marketing, or rather b-to-b marketers, consider these numbers that fill in some of the details of our study:
  • On average, marketers in our survey had been on the job 3.6 years. Of the total, 24.9% had been in their current position two years and 26.4% had held their post three years. While 8.6% said they had spent six to seven years in their current job, only 3.5% had been there 10 years or longer.
  • 39.3% of the marketers said their companies had been part of a merger in the past 18 months. For companies with sales/revenue of $50 million to $99.9. million, 35.2% had been part of a merger, while at $2 billion-plus companies, that percentage grew to 63.7.
  • Leading the industries in mergers was computer services at 71.4%, followed by computer software at 64.4%. Only 2.6% of agricultural companies had been involved in a merger.
  • While 62% of the marketers said their company had introduced at least one new product or service in 1997 -- and 4.7% had launched 15 to 19 new products -- 22% said they had offered no new product or service that year.
  • When it comes to hiring outside help, sales promotion was the top category for out-sourcing, with 68.7% of the marketers saying they hired outside suppliers in this area. Direct marketing was virtually tied at 68.4%, followed by trade shows at 67% and ad agencies at 65.9%.
  • In hiring outside suppliers, creativity was the No. 1 factor (30.6%), followed by industry knowledge (23.7%), marketing expertise (20.9%), expense (14.1%) and strategic planning (7.6%). The data on tools and spending and trends are valuable. But it's the other numbers that round out the picture and add the human element to the study as a whole. B-to-b marketing is heating up, the requirements for doing a good job are evolving, and the environment in which you, our readers, work is changing rapidly. We hope our OutFront data helps you as you prepare for the shifts in your jobs and in your future.
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