Tagged: marketing budget

Why B2B Companies Spend More on Collateral than Digital Marketing

Much of what we do as marketers is invisible. That does not sit easy with me, and I bet it doesn’t sit easy with you either. But think about it. What was once visible is now invisible. Senior executives, line of business executives, and sales teams don’t necessarily see what marketing is doing and producing. What do they see? They see fewer events and tchotchkes. They don’t see the pile of printed whitepapers or glossy brochures.

Many executives still have a hard time understanding the value of building the brand—the classic intangible asset. But now marketing assets are even more intangible. There’s the contact database, the business rules in the marketing automation system, the followers on Twitter.

Search engine optimization is a perfect example of invisible marketing. It takes a lot of knowhow and effort to stay on top. You are doing things like blogging, tagging URLs, linking to blogs, tweeting and retweeting. Social activity boosts rankings. But very few people appreciate this behind-the-scenes work.

The invisibility of marketing creates resistance to change. Sales want the hard copy white paper. They want to collect business cards at the trade show and schmooze at the cocktail party. Your non-marketing colleagues are holding on to what they know and understand. This resistance holds you back.

As a result, transforming the marketing mix is slow process. We see in ITSMA’s most recent Annual Budget and Trends Survey that the digital marketing budget continues to grow, but it is dwarfed by the offline budget. The digital marketing budget is only 14% of the total marketing communications budget, and a mere 4.1% of the total marketing budget. Companies still spend more on collateral than they do on digital marketing!

 Digital Marketing Budget

But luckily this isn’t the case for all the companies. Let me give you a bit more insight into the data. It is interesting to look at the range of spend on digital marketing. It went from a low of 0% to a high of 40% of the marketing communications budget. In fact quite a few companies spend 40% or close to it. Could that be the magic number? Over the next few years, ITSMA expects to see many more companies allocating closer to 40% of the marketing communications budget on digital marketing.

Why Thought Leadership, Not Sales Enablement, Should be Your Top Marketing Priority

Thought leadership—also known as marketing with ideas—is no longer optional.  ITSMA research with buyers shows that thought leadership has become an integral part of the buying decision. Thought leadership is particularly critical to win the minds and hearts of the new B2B social buyer. Therefore, it is no surprise that nearly 60% of B2B services marketers are increasing their budget for content development.

But not everyone is on board. Some marketers I speak to are singularly focused on demand generation, lead generation, and enabling the sales force.  I understand: the economy is uncertain, budgets are tight, competition is stronger than ever, and marketing has to produce measurable results. But what these marketers are missing is the link between thought leadership and enabling sales .

Companies that sell primarily services get it. They know that thought leadership is the key ingredient to spark epiphanies, capture attention, create dialog, and the build trust that over time will lead to a sale.  Developing thought leadership content is a top priority for more than half the services firms we surveyed. However, at the product companies, the priority is enabling sales. While developing thought leadership content is still on the priority list, it’s not high enough. In my mind it should be #1.

2012 Marketing Priorities

ITSMA and RainToday surveyed 859 services marketers and based on the results we identified the seven lead generation best practices. Three of these seven best practices depend on thought leadership:

  1. Segment based on deep knowledge of their target markets
  2. Conduct formal research, in addition to other tactics, to gain a deep understanding of their
    target markets’ needs
  3. Proactively tap their network and current clients to create referrals
  4. Use content that is relevant, provide proof points, and build credibility
  5. Use offers and “live” experiences to generate leads
  6. Use two of the most effective tactics—presenting at events and making “warm” phone calls
  7. Measure their progress at each stage of the pipeline, in addition to the number of leads generated, closed deals, and revenue

Given the changes in buying behavior and the rise of the B2B social buyer, you can’t enable sales and generate demand and leads without thought leadership content.