Yacht Conference Hears Conflicting Predictions

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SAN FRANCISCO BAY ( -- Marketing spending by high-tech firms is likely to decline by 2.2% this year, according to a new International Data Corp.
The conference took place aboard a vessel from the Signature fleet of executive yachts.
study presented at today's CMO Summit aboard a San Francisco Signature Yacht. Other speakers, however, contradicted the prediction.

Yacht conference
The charter fleet of luxurious Signature yachts, with their streamlined contours, is a staple of Bay Area executive entertainment. And today, a sumptuously appointed Signature vessel carried 140 tech marketing executives on a tour of the Bay during the Moet Cup races. The five-day Moet Cup event features Oracle Chairman-CEO Larry Ellison at the helm of his America's Cup yacht, Oracle BMW Racing.

The executives were gathered for the CMO Council's one-day annual summit, which focused much of its attention on near-term market conditions. International Data's vice president of technology marketing research, Richard Vancil, said the company's study found that "marketing spending is declining" in the tech sector.

Software marketing
The findings and predictions were based on a survey of 100 of the largest tech companies representing $400 billion in revenue and $11 billion in aggregate ad spending. Mr. Vancil said that while software companies will increase marketing spending by 4% this year, that will not make up for the decline in spending by hardware and services companies.

Other speakers at the CMO conference, however, were upbeat about tech marketing spending. Gary Beach, group publisher of CXO Media Inc., declared to the applause of the attendees that "the recovery in tech spending has begun." He said tech leaders, for the first time this year, are going into a planning cycle where there "has not been fear, uncertainty and doubt. We're at the tipping point."

Advertising increasing
Privately, a number of executives said they have begun to see signs of improvement in ad spending. While major players such as Microsoft consistently have been advertising during the downturn, a number of second-tier players are starting to advertise. Market leaders such as Intel in March began spending on its Centrino technology, which some attendees hoped would fuel additional investment by other tech companies.

In his keynote address, Intuit Chairman Bill Campbell urged chief marketing officers at tech companies to become involved in product creation. "The goal of marketing is to make sure great products are created," he said. Marketing executives need to have a central role in corporations and will win by taking a quantitative approach, he said.

Warning about viral marketing
On other topics, Mr. Campbell noted word of mouth is a good marketing tactic and has helped Intel's success, but he was cautious about viral marketing on the Web because "it smacks of spam."

The summit was organized by Donovan Neale-May, executive director of the CMO Council. Mr. Neale-May, a longtime Silicon Valley public relations executive, is president of Neale-May & Partners.

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