IDC: Tech marketing budgets down


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IDC projects that over the next 10 years, 90% of revenue growth at technology companies will come from what Schaub termed the third platform. For IDC, mainframe computing is the first platform; the second comprises LAN/Internet technology, client/ server computing and PCs. This year, 63.0% of respondents at technology companies in the services sector said they plan to increase their marketing budgets, and 59.0% of software company marketers planned to do the same, according to the survey. Meanwhile, only 34.0% of hardware companies planned to boost their marketing budgets. Fifty-two percent of hardware companies intended to decrease their marketing spending this year, while only 38.0% of services companies and 22.0% of software companies planned to cut budgets. The average marketing budget ratio (marketing spending/total revenue) among respondents was 1.9% this year. Software companies had an average MBR of 3.9%, while hardware companies had an average 1.9%, and IT service providers' average was 0.6%. Advertising, including digital, still makes up the bulk of total marketing spending (28.3%), followed by events (19.6%), marketing support and sales tools (12.0%), direct marketing (10.4%), websites (5.7%), branding and content (5.7%), market intelligence (4.8%), marketing automation (3.9%), PR (3.8%), social marketing (1.9%), analyst relations (1.1%) and other (2.8%). “There is a shift from a media silo organizational structure to one that is more adapted to systems-thinking marketing,” Schaub said. “The leading companies are growing faster in creating organizations around content and data—pulling those out of specific media silos and putting them almost into a shared service, like a content farm.” Less than one-third (29.5%) of technology companies now have a shared service in place to manage content creation, distribution and management, IDC found. About a quarter (24.6%) are in the process of implementing a shared service for content, and 21.3% are planning for a shared service model. Roughly a quarter (24.6%) of tech marketers still handle content creation, distribution and management by individual groups in the company. Over the next three years, the top marketing spending area for tech companies will be website development, with 44.0% planning to boost budgets in this area. Respondents said their No. 2 investment area will be direct marketing, including email (41.0%), followed by marketing automation (35.0%), advertising, including display and search (31.0%) and social marketing (28.0%). “The [areas] that popped up to the top are all considered owned areas,” Schaub said. “Advertising is a major paid area and social is a major earned area. We are interested to see that social and mobile are still small parts of the budget.” IDC, which for the first time in this year's survey asked marketers about mobile spending, found that only 1.7% of tech marketers' budgets are going toward mobile ads, 1.4% to mobile Web and apps, and 0.7% to SMS text messaging. In other areas of support for digital marketing, the top budget allocation was display advertising (22.0%), followed by search ads (20.2%), marketing automation (14.0%), company websites (13.3%), email marketing (13.3%), social marketing (5.8%), search engine optimization (3.8%), digital events (3.7%) and other websites (0.1%). IDC advises tech companies to adopt the following “marketing imperatives”:
  • Embark on a cultural transformation towards systems-thinking marketing.
  • Build competency in content marketing.
  • Design and execute a 12-to-18-month road map for data-driven marketing.
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