Outlook 2008

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Despite the softness in the overall economy, b-to-b marketers plan to increase their marketing budgets next year, predominantly in online, events and direct, according to BtoB's "2008 Marketing Priorities and Plans" survey.

The survey of 213 b-to-b marketers was conducted online during the last week of November and the first week of December.

It found that 60.1% of marketers plan to increase their overall marketing budgets next year; 29.6% plan to keep budgets flat; and 10.3% plan budget decreases.

Last year, in BtoB's "2007 Marketing Priorities and Plans" survey, 62.6% of respondents said they planned to increase their marketing budgets in 2007; 29.4% said budgets would be flat, and 8.0% said they planned to decrease their marketing budgets.

The primary marketing goal for 2008 is customer acquisition, cited by 62.4% of respondents, followed by brand awareness (19.3%), customer retention (11.7%) and other objectives (6.6%).

Of those planning budget increases next year, 27.8% plan a 5% to 9% increase in spending; 24.6% plan a 10% to 14% increase; 12.7% plan a 20% to 24% increase; and 10.3% plan an increase of less than 5%.

The biggest budget increases will be seen in online marketing, with 79.1% of marketers planning to boost their online budgets next year.

This figure is up from last year's survey, in which 75.6% of marketers said they planned to increase their online budgets in 2007.

"One of our major priorities next year is the continued use of digital media," said Mike O'Malley, director of external marketing at Tellabs, which provides networking products and services for telecom companies.

"This is how our customers want to get information. They want to access information through the Internet, 24 hours a day, seven days a week. Digital media offer us a great opportunity to do that," he said, pointing to the trackability of digital media and the ability to target information to customers and prospects.

O'Malley said that over the last few years, Tellabs has shifted its budget slightly from traditional media such as print to more digital media. Next year, it will increase online spending, particularly in the area of video.

For example, Tellabs produces video podcasts featuring industry thought leaders, which it runs on its Web site and on social networking sites such as YouTube.

Sharp increase in Online marketing

BtoB's survey found that the average percentage of the marketing budget spent next year on online marketing will be 33.8%, up from 26.5% in 2007.

Among the online areas that will see increases next year are: Web site development (cited by 74.0% of marketers), e-mail (70.1%), search engine marketing (64.3%), video (39.5%), webcasting (39.1%), banners (36.4%), sponsorships (29.6%) and social media (26.2%).

The survey found that 19.8% of marketers are currently using social media as part of their marketing strategy.

Of those that are using social media applications, 53.8% use them for thought leadership; 40.4% for customer feedback; 30.8% for market research; 28.8% for advertising; and 26.9% as a sales channel. (Respondents could select more than one response.)

Another tactic that will see a spending boost in 2008 is event marketing, with 49.5% of marketers planning budget increases in this area. Last year, 44.1% of marketers said they planned to increase their spending on events.

"We still find that events are very important," said Clive Over, director of corporate marketing communications at chip maker Atmel, which will increase its events budget next year.

Overall, Atmel's marketing budget will increase between 18% and 22%, Over said. "We're looking to try and personalize our event experience more, with more vertical events rather than horizontal events," he said.

For example, Atmel will participate in trade shows for embedded technology, aerospace and industrial control rather than large events such as the Consumer Electronics Show, Over said.

"These are very specialized events that a smaller number of people go to, but we are guaranteed a high level of quality in terms of leads," he said.

Direct mail will also get a boost next year, with 49.0% of respondents planning to increase their direct budgets in 2008. This is down slightly from last year's survey, in which 50.2% of marketers said they planned to increase their direct budgets.

"We will probably focus a little more on direct marketing as opposed to large advertising campaigns," said Karen Parsons, marketing communications manager at Eastman Chemical.

Eastman recently launched a marketing campaign for a new copolyester product, which made heavy use of direct mail and e-mail to drive traffic to its booth at an event (see story, page 12).

"It really depends on the business objectives and who we're trying to reach. We still plan to use print," she added.

BtoB's survey found that 27.8% of marketers plan to increase their print budgets next year, compared with 33.6% last year.

"Print is not going away," said Atmel's Over. "Engineers still read publications, and we will continue to make an investment in print."

Nearly 70% plan new ad campaigns

The survey also found that 69.4% of marketers plan to launch new ad campaigns in 2008; 36.2% plan to hire additional staff.

"Our marketing budget will be significantly increased due to the launch of our new campaign," said Tom Haas, CMO of Siemens AG, which recently kicked off a $145 million global ad campaign.

When asked to rate their ad agency partners in terms of willingness and capacity to tailor programs to fit their marketing goals, 53.9% of respondents said "OK," 40.7% said "excellent," 4.8% said "poor" and 0.6% said "unacceptable."

When asked to rate their trade media partners in terms of willingness and capacity to tailor programs to fit their marketing goals, 65.8% said "OK," 28.0% said "excellent" and 6.2% said "poor."

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