Marketing budgets at b-to-b companies are set to rise 6% in 2014, according to a Forrester Research report released Tuesday. Despite that solid increase, spending will still trail pre-recession levels.
B2B Marketing Budgets Set to Rise 6% in 2014: Forrester
The report, conducted in conjunction with the Business Marketing Association (BMA), found that marketing budgets will eek back up to 4% of company revenue in 2014. That's still less than the 5% to 10% many companies had in place before the 2008 recession, but an improvement over the 2.5% Forrester reported two years ago.
"Business is just tightening its belt all around," said Forrester VP and senior analyst Laura Ramos. "You have to really prove that you're going to return value to the business to get more budget money."
Ms. Ramos said b-to-b marketing budgets went down severely in 2009 and 2010. And while they've inched back up in recent years, "we don't believe they're anywhere back to where they were in the pre-2009 level."
Focus on tech
An emphasis on accountability and smart spending will lead to bigger bets on marketing technology in 2014, Ms. Ramos said. According to the report, 61% of marketers "expect to increase the proportion of technology spend versus marketing communication/program spend." The technology can help marketers prove their programs' return on investment by tracking prospects' engagement during the buying process. It can also help marketers monitor the effectiveness of various tactics and programs, said Ms. Ramos.
Changes to the buying process are partly responsible for the greater investment in tech, said Ms. Ramos. "Buyers have more control over the purchase process," she said. "They self educate, they look for information earlier in the purchase process and they're waiting longer to talk to sales. From that standpoint, companies are saying, 'how do we get involved in that purchase-making decision earlier, before sales talks to them?'"
In response, b-to-b marketers are using technology to steer those doing pre-buying research to their websites or social media accounts.
And then there is the arms race factor. "If your competitors are doing it and you're not, they're going to be more nimble and have more access to data and analytics. It's going to let them figure out a strategy and make changes faster that you," said Ms. Ramos.
A love-hate relationship
Trade shows, the report found, still constitute the biggest line item on a b-to-b marketers budget, with nearly 20% of spend being committed to live events. While 30% of marketers told Forrester they would decrease their live event spending, 21% said they would increase it.
"It's this love-hate relationship that marketers have with physical events that they will continue to struggle with," Ms. Ramos said. "We'll probably see companies spending more of that budget on things that are local and lets them get closer in touch with customers than the big conferences and trade shows."