• IT Marketing Budgets Recover With Strength into 2011

    The latest marketing spending survey results are out and the budget news is finally good for technology marketers. According to IDC’s annual “Tech Marketing Barometer Study”, marketing budgets are recovering with strength in 2011, with an expected 8% annual increase over 2010 levels.

    With such growth, technology marketers will certainly have more to work with, but with more channels to leverage in order to reach customers, and a backlog from negative growth in 2009 and modest 3.7% growth in 2010, it’s unclear whether this increase will provide enough fuel to drive all of the campaign requirements and requests.

    During the downturn, marketing budgets were reduced more than IT revenue growth, and during the recovery in 2010, marketing spending lagged the “snap back” recovery in the IT marketplace. In 2011, this lag reverses finally, as IT marketing growth exceeds the anticipated growth in IT global revenue, a sign that marketers are getting their fair share of the budget, and that executives are wanting to get ahead of the growth in the target market by throttling up marketing spending now versus later.

    Major Changes to the Marketing Mix

    Examining the spending mix, technology marketers continue to shift budgets from traditional advertising, to digital marketing, which includes company websites, digital display ads, e-mail marketing, digital events, search engine optimization, social media. This shift is dramatic, with the traditional media spending being reduced in half from 2009 to 2010, with expected continued declines into 2011.

    The strategy to online is being driven by buyers, who have dramatically shifted their preference for where to source decision support content,  split between sourcing the content via traditional formats and on-line just two years ago, to 2/3rds now preferring the content via on-line sources.

    Source: IDG Connect (2010)

    Comparing 2010 to 2009 spending, digital marketing is not changing too dramatically, with a higher percentage of spend being allocated to the company web site, as buyers continue to use web content to fuel buying decisions, and social networks, which is almost doubling in investment for 2010 (but still a small fraction of the overall digital spend at less than 6%).  The increased budget for web and social media is primarily coming at the expense of spending on search ads and digital events.

    The Bottom Line

    As it has been said, “It is often not how much you have, but what you spend it on that matters”, however, the 2011 recovery in marketing spending is significant, and sure to help overloaded marketers implement the programs they so desperately need to connect, engage and sell to today’s more empowered, skeptical and frugal buyer.

    The latest 2011 predictions put the marketing budget growth ahead of the overall worldwide market opportunity for IT, as executives hope to get ahead of anticipated IT spending increases for the first time in several years.  This shows that executives have confidence in the next technology spending wave, and confidence in marketing to help catch their fair share of anticipated marketing opportunities.

    And the spending shift to digital continues as buyers shift to using the web site and social media to source content, cannibalizing traditional media spending to ½ of prior year levels.

    Tom Pisello founded Alinean Inc. in 2001 where he coined the term, “Frugalnomics.”  You can read his daily blog at Tom Pisello: The ROI Guy.

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