2013 Tech Marketing Budget Trends: 3rd Platform Companies and Products Lead the Growth

Yesterday, IDC's CMO Advisory Service had our annual Tech Marketing Benchmark Webinar. This study goes out to close to 100 senior lever marketing executives and represents the largest B2B Tech companies in the world (this year the average company revenue was $9.1B.) The webinar was packed with great information and was a great success. However the overlying question each year is where will marketing budgets sit at the end of the year and what direction are they moving. The results are some good news mixed with trends that point to hard work that marketers need to do around their budgets. 

Good News: More Organizations are Increasing their Marketing Spend Than Decreasing

As seen in the graph below, across the entire tech industry a net of 15% of companies are increasing marketing spend versus those decreasing. While it may not always feel like it, there are marketing budget increases out there to be had!

Challenge for Marketers in 2014: Finding the Right Areas that Should Receive More Marketing Budget

Despite the fact more companies across the tech industry are increasing marketing budgets than decreasing, budgets at the aggregate levels are flat to slightly negative. IDC expects Marketing budgets to decrease 0.5% year-over-year from 2012 to 2013. So that leaves us with an interesting juxtaposition, more companies are increasing budgets than decreasing, but at the aggregate weighted level the data shows a slight decrease in overall budgets. Three reasons we are seeing this:

1. The largest companies within the Tech Industry are seeing flat to declining marketing budgets due to continued transformation within the industry. This brings the weighted levels down. 
2. Hardware companies (as seen in the above graph) are the only sector where more companies are decreasing marketing budgets than increasing. Companies within this sector are typically larger and the Hardware industry is feeling more affects from the industry's transformation. 
3. 3rd Platform companies and other high growth product lines and business units are driving much of the revenue growth and in turn are receiving much of the increases within marketing budgets. These companies are smaller, so they add the "n" value of companies increasing, but do not affect the weighted average as heavily. 

Illustrating the final point (#3) you can see in the graph below that Cloud Software Vendor's (who are right smack in the middle of IDC's 3rd Platform) Revenue Growth, Marketing Investment Growth, and Marketing Budget Ratio (total marketing budget / total revenue) are all at least 3X  that of their on-premise peers. Some of this can be attributed the size of the Cloud Vendors (typically smaller), but the growth being seen in the 3rd Platform areas is undeniable.

Note: If you would like to discuss cloud vendors marketing benchmarks further please email me at smelnick (at) idc (dot) com!

In closing the 3 budget takeaways we are giving for budgets in 2013 - 2014 are:

1. More companies are increasing (vs. decreasing) marketing spend. (This is good news!)
2. There is not enough "Peanut Butter" to go around... (so an even spread will not work this year)
3. Marketing Investment will inevitably find growth areas: products; markets;  segments; or geos. (So, work hard to find those areas and invest wisely)

Sam Melnick is a Research Analyst at IDC's CMO Advisory Service and manages the entire benchmark survey and study. You can follow him on twitter at @SamMelnick

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Benchmark your Marketing Organization with IDC Research - 2013 Tech Marketing Benchmark Survey

Here at IDC's CMO Advisory Service we are in the field with our 11th annual Tech Marketing Benchmarks Study. I would like to offer an invitation to participate to marketing executives across the industry. 

Have you ever wondered, "Is my marketing organization receiving enough budget to compete?" or "Exactly how much should I be spending on marketing automation?" If so, IDC's CMO Advisory Service's benchmark survey has been helping senior marketers answer questions like these for over 10 years!

Below are the essential "need to knows" around our survey and further down I'll dive into all the great value of benchmarking your marketing organization. Let's get started:

What are the benefits?

• Complimentary copy of our 2014 Marketing Investment Planner to benchmark your company's marketing data against the industry's data.
• Receive an invitation to our client only telebriefing held by IDC Analysts. 

What is needed? 

• Email me (smelnick (at) IDC (dot) com) to get our survey instrument and taxonomy.
• Complete the survey and send it back in a timely manner ('due date' to be discussed).

What is the Quality of Data and Confidentially?  

• This is the 11th year IDC has fielded the Tech Marketing Benchmark Survey and will include participation from many of the 100 largest tech companies - this depth and expertise is unmatched. 
• All responses are 100%, no questions asked, confidential. We take this part very seriously.  

Bonus to all Participants

• All participants will be eligible for our 2014 Chief Marketing Officer ROI Matrix and will have access to their placement on the Matrix. A great way to easily compare your marketing progress against the rest of the industry's. 

Need More Information: View this excerpt from Kathleen Schaub's excellent post, IDC Tech Marketing Benchmark: Behind the Scenes. It explains all the intricacies (and value of benchmarking).

Why do companies benchmark? A benchmark provides context for decision-making. You spend a million dollars a year on social marketing. So what? If your CEO asks you this question, what will you say? Tech marketers tell us that they like to benchmark for the following reasons:

• Improve the quality of annual planning: Last year’s program budget and gut feelings are no longer sufficient input

• Gain insight into critical trends: Learn what industry leaders and competitors are doing – and how you stack up

• Reallocate costs: Identify areas of overspending and opportunities for better value

• Transform with confidence: Answer questions such as how much to invest in new areas like social marketing or how should I re-organize my department?

• Drive with data: C-level executives increasingly expect marketing leaders to manage their business with the same level of operational excellence as other corporate functions.

• Get an independent view: Benchmark data provides IDC analysts with a wealth of information that make guidance to clients personalized and accurate guidance

Feel free to reach out and let's have a discussion whether it's the right time for your organization to participate!

Email me at: (smelnick (at) IDC (dot) com) or find me on twitter @SamMelnick

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Slide Deck - 2013 Cloud Marketing Trends

There is no arguments that the cloud software industry is currently top of mind for many, in fact enterprise companies are even receiving their share of love. While the industry as a whole has our attention, what about marketing departments at these companies. 

How are CMOs at these fast growing cloud organizations managing their marketing budget? What are they worried about? and what are their priorities for the rest of the year?

Within IDC's 2013 Marketing Barometer survey we received answers from marketing leaders within cloud organizations. In this presentation you will see the high level findings comparing these cloud marketing departments to more traditional 2nd platform companies.

I would love to hear your thoughts on these initial findings and how your marketing organization is working to compete in this fast growing market (whether as a pure play or just one of many product lines).  

For an extended deck with further analysis please contact me directly at smelnick (at) idc (dot) com or reach out to me on twitter: @SamMelnick

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Why Participate in IDC's Marketing Barometer Survey

The CMO Advisory Service at IDC is conducting its annual barometer survey. This is the 10^th year of the survey.  All respondents will receive a free copy of the report produced from the results of the survey and an invitation to IDC's exclusive Client Telebriefing.

During The CMO Advisory's 2012 Marketing Benchmarks survey we collected data from ~100 of the largest and most influential tech companies, their combined revenue totaled nearly $750 Billion.  The barometer survey provides a "finger in the wind" follow up to the Benchmark Survey providing detailed guidance to senior marketers. Areas of focus include: budget ratios, program spend, headcount allocation, and in-depth insights into key trends in the industry and forward looking roles and programs.   

If you are interested in participating: contact Sam Melnick at smelnick (at) idc (dot) com

Below are some answers to questions you might have:

Q: A free report and webinar, cool! Wait what type of information will they contain?

A: The results of the survey will be used to analyze the direction of marketing resource expenditures and priorities during the next 6-12 months. So questions like the following will be answered:

• How aggressively are marketing budgets increasing or decreasing in my sector this year?
• What marketing staff positions or programs should I look to invest in?
• What up and coming areas should I be looking into this year to create a world class marketing organization?
•  What are next week's Powerball numbers? (Ok we won’t answer that question, if we knew we probably wouldn't tell you…sorry).

Q: Who should take the survey?

A: Marketing executives who are in a position of responsibility for worldwide marketing practices.

Q: How long will it take?

A: Depending on several factors, as quick as 15 minutes!

Q: I can’t get this done today, when do you need to have it completed by?

A:  To receive the report and an invitation to IDC's exclusive Client Telebriefing participants need to complete the survey by Wed Feb 13, 2013. Also, all of the information must be accurately provided in order to be included in the study and receive the free deliverables.

If you are interested in participating: contact Sam Melnick at smelnick (at) idc (dot) com

Q: I can't answer this question, I need input from my colleagues…help?

A: No worries, if you leave the webpage it will save your progress.

Q: What types of companies participate in this survey?

A: Some of the largest tech and tech related companies in the world participate (again total revenue of participants reaches upwards of $1 Trillion), but plenty of companies who may not have as many 0's in their revenue line, but are growing quickly and have exciting products, do participate and receive great value from the deliverables!

Q: Some of this information is kind of confidential, I want to trust you, but can I?

A: As stated above, the CMO Advisory Service has been doing surveys like this for 10+ years. All answers will be kept confidential by IDC and all data will be aggregated for the purposes of trend analysis.  No client or other participant of the study will ever receive your company-specific data and there is no way that any company can "reverse-engineer" the analysis to derive your data input. Your responses will not be used for any other purpose within IDC.

Q:  Ok I completed the survey…so… when do I get the free research?

A: Heh, I knew you'd ask this one. You can expect the deliverables to begin coming out around late March. For clients who are attending our March Board Meeting we will have in depth discussion around the barometer findings (want to know more about these board meetings? Reach out to the CMO Advisory Group team or send me an email).

If you are interested in participating: contact Sam Melnick at smelnick (at) idc (dot) com

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