Industrial Marketing Budgets Grow, Shift Online

Marketers at industrial companies spent a greater portion of their marketing budget online in 2008 than last year, and despite the economic downturn, 38% expect to spend a larger amount this year on marketing as they continue to migrate dollars to online tactics, according to a survey by GlobalSpec.

The survey found that that 30% of respondents reported spending more than 50% of their overall marketing budget this year on online marketing, up from 20% in 2007.

The economic downturn, which has hit other industry sectors hard, has not yet affected industrial-sector revenues, Globalspec said. The majority of respondents (78%) say their 2008 revenues are on or ahead of plan, with only 22% reporting revenues below plan.

Though 42% percent say they don’t expect their marketing budgets to be impacted by the economy this year, they do concede that economic uncertainty may have a negative impact in the future: 40% of respondents indicate their marketing budget may be cut if the economy worsens.

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Additional findings:
  • On average, 37% of a typical industrial marketing budget is spent online.
  • 57% of respondents stated that online marketing will command a greater portion of their marketing budget in 2008 than it did in 2007.
  • % of respondents stated their companies will spend more on marketing in 2008 than in 2007; 41% anticipate spending the same.
  • Three of the four top sources of leads for industrial companies are online marketing programs.
  • Online directories/websites and email marketing using in-house lists are the two most frequently used marketing channels.
Top Marketing Challenges:

Despite the increased shift of marketing dollars to online media, respondents report facing a number of marketing challenges:
  • 47% of respondents selected “too few marketing resources” as one of their top three marketing challenges this year.
  • 31% indicated that improving marketing ROI was a challenge for them.
  • 26% report that determining what online marketing programs work best remains a challenge.
The survey results also show that generating leads remains both a top marketing goal and challenge for industrial marketers. Nearly three-quarters (72%) said that either customer acquisition or lead generation was their primary marketing goal in 2008.

The quality of leads delivered was considered the most important factor when deciding where to allocate marketing budget, with lead quantity being less important, Globalspec said.

Marketing in an Economic Downturn: Mistakes, Challenges and Opportunities

Some 60% of American Marketing Association member marketers say halting or reducing spending on key marketing programs is the biggest mistake marketers can make in an economic downturn.

Focusing on short-term tactics and sticking to the status quo are additional missteps, marketers say.

Marketing in an Economic Downturn
In all, 66% of respondents to the May survey say the current state of the economy is having an impact on their marketing plans. Marketers most often say it is a challenge in this economy to…
  • Demonstrate the value of marketing when sales are decreasing
  • Realign marketing strategies to match businesses’ changing objectives
  • Focus on longer-term brand strategies
The AMA offered four strategies to enhance marketing plans in a downturn - shape the message, don’t slash the price; focus on whom not to target; stand apart from the crowd and invest in innovation; and sustain the brand:

1. Shape the message, don’t slash the price

Only 3% of American Marketing Association marketers say it is important for marketing functions to adjust pricing strategy to help sustain and grow business during an economic downturn.

Implications for marketers: Conduct research to understand your competitor’s positioning and your target audiences’ perception of the economic environment; hone and refine your messages; highlight the value of your product or service, rather than slashing the price.

2. Focus on whom not to target

Some 67% of AMA marketers say it is important to mitigate the impact of an economic downturn by refining target audiences.

Implications for marketers: Assess which segments of potential customers you do not want to target; don’t market to inappropriate market segments (simply stated, some customers are more costly to serve than to lose); focus marketing strategies on customer segments that will produce the greatest ROI.

3. Stand apart from the crowd and invest in innovation

Most AMA marketers, 66%, report that they would take the same amount or less risk with a new product and/or service innovation during a time of economic uncertainty.

Implications for marketers: Differentiate through innovation with a product or service that performs in a faltering economy; invest in R&D now to ensure that your company is in a position to compete when the economy rebounds.

4. Sustain the brand

63% of marketers say they can lessen the impact of a downturn by investing in brand building as part of their marketing plan.

Implications for marketers: Establish access to executive officers to understand ongoing shifts in business strategy; realign marketing strategies to match business objectives quickly to demonstrate a commitment to the bottom line; qualify and quantify results quarterly to establish an ongoing dialogue with executive officers.

Majority of Marketers Seek Email, Social Media Marriage

Online Marketing Trends 2010Two-thirds of email marketers plan to integrate their email and social media campaigns in the second half of 2009 and 48% have already formulated a strategy for achieving this initiative, according to a survey.

In addition, the “2009 Marketing Trends” study also found that email marketing and social media are the top two areas where marketers plan to increase their investment in the second half of this year. Funding is exceptionally strong for both channels: Of marketers planning to increase budgets in 2009, the study found that 83% would increase spend in email marketing, followed by social media at 62%.

Social Media ‘Hot’ but Confusion Exists:

Despite an increased focus and growing investment in social media, there is still widespread confusion about how a social media strategy for email marketing should be implemented. More than half (55%) of respondents report that one of their biggest challenges with integrating social media and email marketing is determining metrics by which to measure success. At 48%, establishing business goals for the program is a close second.
Who Owns Social Media?

Part of the problem with integrating and measuring appears to be confusion about where the responsibility for social media outreach should lie. Currently, there appears to be a widespread land-grab for ownership of social media within the various facets of marketing, the study found. More than one-fourth (29%) of respondents say multiple departments currently own responsibility.

Surprisingly, only 9% of the respondents report that social media is owned by PR departments, suggesting that “marketing teams value social media more for its demand generation potential than awareness building,” adding that only 5% have a dedicated social media department.

These findings prove that social media has grown to the stage where it needs an owner and a purpose within marketing and that the interconnection between social media and email make it an ideal direct channel, according to the company.

“Leveraging social media is a valuable tool for meeting direct marketing objectives, but, like any good direct marketing campaign, they need to be tied to metrics such as purchases, new customer acquisition or customer retention”

Marketers Plan 2010 Increases in Social Media, SEO, Virtual Events

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Three-fourths of marketers are planning to increase their outreach to social media in 2010, while roughly half intend to up their efforts in each of the following: SEO, email marketing, and virtual events/environments, according to recent research by Unis fair.

The survey, which was undertaken to gauge the importance of virtual events in the 2010 marketing mix and barriers to more widespread adoption, polled more than 100 US marketing professionals about their plans for next year.

Marketing Trends 2010
It found that the most popular reasons for adopting virtual events are to extend marketing reach (32%) and increase lead volume (15%).

For those not embracing virtual events, the biggest barriers include not knowing how to organize a virtual event, the perception of a complicated set-up process, and a lack of a virtual event provider.

Other survey findings:
  • Lead generation and customer retention/engagement are the most critical objectives for marketers today, with 60% and 48% respectively ranking them as very important on a scale of one to five.
  • 26% of marketers (the highest percentage for any one method), say LinkedIn is the social networking tool proven to add the most marketing value. Facebook came in a close second with 23%.