The State of Marketing Technology: Tech Marketing Barometer

The market in Marketing Operations software has seen a lot of changes in the past year or two. Several mergers and acquisitions, the arrival of new vendors and the disappearance of others made sure that Gartner’s Magic Quadrant needed constant updating. And these are uncertain terms for marketing departments as well. In 2009, budgets shrank twice as fast as revenue, and although revenue has gone up since, marketing budgets are still lagging behind.

In the 2012 CMO Tech Marketing Barometer Study, research firm and consultancy IDC takes a look at the current state of Tech Marketing and looks ahead at the year to come, and offers advice for CMOs in the thick of it. The study includes information collected from 61 hardware, software, and service providers, whose combined revenue totals roughly $550 billion. The results? Things are looking up for marketing departments, in general. Tech CMOs expect their budgets to increase by 3,6% (a more realistic estimate than the 8% they predicted last year), and social media are beginning to pay their way in the marketing mix. IDC expects the purchase and adoption of Marketing Operations software to grow in the next year, but is concerned that many marketing departments may not be prepared for the complexity of marketing automation, from the standpoint of proficiency and maturity.

Overall Marketing Budgets

The top areas in which the respondents expect an increase in investment are social marketing (65% expected budgets to increase), website and content development (60%) and direct marketing, including email (50%). Respondents that budgets will decrease for events (35% expect budgets to decrease), and advertising (30%). budgets are expected to remain the same for analyst relations (70%), marketing support and sales tools (62%) and market intelligence (62%).

Digital Marketing Budgets

IDC also noted a considerable increase in spending in digital marketing. In 2009, digital marketing made up 12.6 % of the total marketing budget. In 2010, this had risen to 19.3% and in 2011 it had gone up to 26.4%. Of the digital marketing budget, the focus lies on company web sites (22.5% of digital marketing budget), followed by email (15.7%) and SEO and social marketing (14.6 and 14.5% respectively) close behind. Increasing an online presence is a priority for marketers, as more of marketing activities switch to the Web.

Marketing Automation

Marketing IT and automation have grown exponentially in importance and focus over the past few years. For an area that was once only 2% or 3% of the total program spend mix, marketing IT has ballooned up to an expected 8.7% of total program spend in 2012. One surprising outcome from the survey is that while there are several business departments involved in the selection and purchase of marketing automation systems (after Marketing, these are Corporate IT, Sales and Finance), the largest part of the costs will be borne by the marketing department. IDC proposes an enterprise-wide approach to purchasing IT systems, as opposed to a departmental approach. Departments are increasingly dependent on software, and should be able to collaborate.

Of the investments in marketing automation, the respondents expect the biggest increases in investment in lead management (58%), digital marketing (56%), web site infrastructure (48%)  and social media monitoring (43%). Respondents generally expected the investments in marketing automation to either rise or stay the same – very few people expected the budgets to decrease.

Advice for Marketers

While budgets and investments are slowly increasing, many marketers still have to cut costs or make use of their resources more efficiently. IDC offers two main words of advice for marketers on a tight budget.

First, search for marketing budget efficiencies within the existing cost envelope. Typically, you will find those opportunities at the ‘boundaries’ of the various marketing organizations: where corporate marketing shares a boundary with product marketing or where corporate marketing shares a boundary with field marketing. The second area will take more time and effort, but it involves redrawing the pathways through which a customer or a prospect is ‘processed’ through all of the marketing and sales execution — steps that are your current ‘business model’ for creating a customer. This work will require a tight-working compact and mental alignment between the CMO and the chief sales officer (CSO).

For more information, or to purchase the report, visit IDC.
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