IDC: Tech marketing budgets will increase 3.5% this year

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Global technology companies, which slashed marketing budgets an average 8.3% last year, will increase their budgets an average 3.5% this year, according to research company IDC. Last month, IDC released its 2010 Tech Marketing Barometer study, based on interviews with 47 senior marketers at global technology companies representing more than $290 billion in revenue. The interviews were conducted by e-mail, telephone and in person during January and February. Companies participating included Adobe Systems, Intel Corp., Microsoft Corp., Siemens Enterprise Communications and Sybase. The study found that 60.0% of tech marketers plan to increase their marketing budgets in the first half of the year, and 54.0% plan to boost them during the second half. Twenty percent of marketers plan decreases in the first half, while only 13.0% plan cuts in the second half. “I am encouraged by this,” said Rich Vancil, VP-CMO Advisory Service at IDC, noting that he conducted informal interviews with CMOs last November to gauge their sense of a recovery this year. “While many CMOs were skeptical [of a recovery] in November, this shows they are putting their money where their mouth is,” Vancil said. “Four months can really make a difference as a recession turns a corner.” IDC projects that global IT revenue will grow an average 3.2% this year, just slightly below marketing spending by IT companies. Last year, global IT revenue fell an average 4.5%, while marketing budgets were cut by 8.3%. “During a recession, things tend to get a bit out of whack,” Vancil said. “What we've seen over time is that basically marketing budgets tend to parallel or be slightly less than revenue growth. Now, marketing budgets will be coming back ahead of revenue growth as marketers invest in these functions.” The study found that 60.0% of marketing budgets this year will be spent on programs, and 40.0% will be spent on people. On the program side, the greatest share of the marketing budget will go toward advertising (21.6%), followed by marketing support and sales tools (17.8%), events (17.8%), digital marketing (12.7%), direct marketing (10.5%), collateral (5.3%), market intelligence (4.7%), public relations (4.3%), analyst relations (1.8%) and other (3.5%). “Traditional print and broadcast advertising are declining, and the more traditional events—the "big tent' events—are being replaced by proprietary and customer-focused events,” Vancil said. “The largest decreases are in collateral,” he added, pointing out that more than 40% of tech marketers will slash their marketing collateral budgets this year. “Many marketers are doing more active content audits, particularly around hard-copy collateral. They are trying to reduce the amount of copy that gets published.” The greatest budget increases will be made in digital marketing, with more than 80% of tech marketers increasing their online budgets this year. Within digital marketing, the largest share of budgets will go toward display ads (24.4%), followed by e-mail marketing (19.1%), search ads (18.6%), Web sites (16.4%), digital events (8.9%), search engine optimization (7.1%), social networks (3.1%) and other (2.4%). On the people side, tech marketers will invest most heavily in staff for product/industry/solution marketing (25.4%), field marketing support (15.5%), marketing communications (6.8%), digital marketing (6.4%), direct marketing (5.6%) and campaign management (5.5%). Vancil said a growing staffing category is marketing operations, accounting for 4% to 5% of total personnel. “This is a role that continues to blossom throughout the industry to improve planning, budgeting, systems and process improvements,” he said. One of the challenges for large enterprises this year is the “mashup” of sales and marketing, with 20% of tech companies with sales in excess of $1 billion combining their field marketing and sales organizations, Vancil said. “A lot of alignment problems between sales and marketing should be resolved with the hard merger of these two functions,” he said. M
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