Business Marketers Now
Spend Half of Their Advertising Budgets Online
CLEVELAND, Ohio, USA,
Dec. 2 , 2008/PRNewswire/ -- A survey of business-to-business
marketers indicated that the migration of communications budgets from
traditional media to online has accelerated to the point where nearly half
of all spending, 47 percent, is spent on online marketing techniques today.
The survey, conducted jointly by Hearst Electronics Group and Goldstein
Group Communications (GGC), was conducted via email during August and
September, 2008 with b-to-b marketing executives throughout
North America.
"This type of data reveals best practices among business marketers at a
time of tremendous flux," said GGC President
Joel Goldstein. "The sense of urgency to move to online
marketing has been felt by leading marketing organizations for some time
now, but the extent to which budgets have been re- defined is dramatic.
While traditional media still play a role in building a balanced program,
clearly online spending for webcasts, search engine marketing and generating
online content are now seen as the primary drivers of branding and lead
generation for most companies." Goldstein noted that it's likely the
increased pressure for program measurability and accountability in 2009
budgets is also a factor in pushing programs to more online spending.
"The survey's goal was both simple and straightforward," said Hearst VP
Publishing Director
William Barron. "Identify how companies are allocating
dollars, what's working and, most importantly, why. The most advanced
marketers today build balanced programs that incorporate multiple points of
contact with their targets, from print to online to shows to direct. The
survey reinforced that budgeting shouldn't be a search for the 'magic
bullet' but instead must follow a disciplined and proactive strategy."
While the survey queried marketing executives on sales channels
strategies, barriers to growth, and other 2009 plans, the survey's main
conclusions centered around budget patterns for marketing communications
expenses.
"When web development, search engine marketing and webcasts are combined,
marketers today are spending 47 percent of total budgets on online tactics,"
said Goldstein. "This includes online video and social media, which are very
small portions of the budget today but are expected to grow rapidly during
the next few years."
"Traditional media spending on print advertising is the single largest
program in the budget for an important reason," notes Barron. "Research from
all the main trade publishing companies, including Hearst, Reed and the
online firm Techinsights, shows that prospects spend a majority of their
time in print when researching products and suppliers. The key point for
marketing today is that it is an 'AND' not 'OR' world, meaning that
customers use both print and online tools."
Part of the reason marketers are so willing to devote such a large
portion of their budgets to online may be tied to lead quality. The single
best source of leads, they report, is their web site, at 24 percent,
followed closely by search engines at 19 percent. While one might expect
that high spending for online tactics would lead to strong lead quantity,
this question dealt instead with a marketer's source of their BEST leads.
Online and trade shows, at 15 percent, appear to be the most important
sources of quality leads. "In this environment, many budget choices in 2009
will be based on what's 'nice to have' versus what we 'have to have.'
Programs that are proven to generate the highest quality leads, and that are
easiest to track to a lead or sales conversion, will end up as the winners,"
said Goldstein.
Search engine marketing currently consumes 11 percent of budgets, when
including organic as well as pay-per-click programs. Barron notes the
importance of building strong brands carries through to Google and Yahoo!
initiatives as well. "The value of strong brand recognition can be found
typically in your company's own server logs, the database that identifies
what words or phrases people have typed in to Google or Yahoo! in order to
find your site," he explains. "The dominant phrase is likely to be your
company's own name or product names. While ideally you're building search
engine visibility to reach new people who don't know you, the approach still
must be centered around balanced brand-building so the market knows your
name and you carry some level of visibility in your space."
Direct marketing is still a player in b-to-b spending, at 12 percent
total, evenly split between email and direct mail marketing. Trade shows
continue to represent a large portion of marcom budgets at 17 percent,
Goldstein noted. "While trade shows are certainly among the most expensive
tactics employed, and while shows have enjoyed a modest growth spurt from
2002 to 2007 in traffic and revenues, we had expected to see more trimming
in that portion of the budget, as senior level executives and buying
decision-makers continue to curtail their trade show attendance for many
industries," he said.
Also in traditional marketing, a still robust 11 percent of budget is
spent on print materials, meaning that most marketers have concluded they
can't live by online pdfs of brochures and data sheets alone. Printers can
take heart that marketers still see a role in printed literature and
catalogs for the b-to-b sales process. "One of the other areas of inquiry is
managing marketing on a global scale," said Goldstein. "Companies today are
so tied to overseas markets, which presents a challenge to marketing
executives who must coordinate a unified message worldwide. We wanted to
measure whether decisions on messaging and budgeting remain with U. S.
headquarters, or have dispersed to other areas of the world."
In this survey, two thirds of revenues come from outside
North America for these companies, with 20 percent
coming from
Europe, and 19 percent from
Asia.
North America remains the center, though, for
generating marketing materials and messaging: 42 percent report all creative
originates at U. S. headquarters, while another 30 percent report these
decisions are made "mostly" at U. S. headquarters. The pattern holds for
budget and spending decisions as well, though slightly less so. Some 43
percent say budgeting decisions are made completely at U. S. headquarters,
with another 20 percent saying "mostly" in the U. S.
For demographic purposes, 79 percent of survey respondents carried a
marketing or sales title, with another 15 percent as CEO/President. One-
quarter of survey respondents were from large corporations with revenues of
$151 million or greater; nearly a third, or 31 percent, were
from smaller marketers with annual revenues at
$10 million or less.
The email survey was distributed to marketing executives and top management
among
North America electronic manufacturers and b-to-b
executives during August and September, 2008. Survey data are based on 99
completed questionnaires.
Recession Means Mixed Fortunes in World Advertising Marketplace
The 2009 Worldwide Advertising Forecast (done annually) by Zenith Optimedia
Agency, a subsidiary of the giant advertising agency Publicis, predicted in
December, 2008, that---
1. Internet-based advertising will defy the worldwide financial trend by
expanding 18% in 2009.
2. Internet advertising will have the third-largest share of advertising
spending in 2009 with 12.1% of all advertising expenditures, trailing behind
newspapers
at 23.8% and television at 38.3%. (as reported in
Business World (Philippines) on December 10, 2008)
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