Technology Marketing to Resume Growth
Technology companies are set to resume strong marketing spending after years of decline in the wake of the dot-com bust, according to a new report from IDC. Marketing leaders at more than 100 firms in technology hardware, software, and services were surveyed and, according to "Marketing Budget Planner 2005: Benchmarks and Key Performance Indicators," IDC concludes that technology marketing spending grew 6 percent in 2004, now accounting for 3.2 percent of corporate revenues.
Curiously, brand building was ranked highest among marketing priorities, despite the strong positioning efforts many vendors employed during the tech boom. Michael Gerard, IDC's CMO advisory service director, says the brand-building efforts may reflect both fresh faces and survivors looking to establish new markets. "There are some very successful niche players that have developed over the past couple of years who have developed strong brand equity in certain verticals...and are looking to expand from a product focus to a product and suite focus." Meanwhile, established names associated with broad-based functionality are trying to establish themselves as vertical leaders.
The report reveals an interesting conundrum for technology marketing professionals. Although brand building is their top priority, it is not the most common metric measuring their performance. Lead generation statistics are most frequently reported to the CEO, with brand awareness ranking just fourth.
This reporting priority may be a result of the company's perception of the marketing group. "Over the past several years, marketing was relegated to supporting sales," Gerard says, as many marketing organizations were seen simply as lead generation machines during hot sales cycles. Although survey respondents identified better collaboration with the sales team as the third priority of a possible eight, according to Gerard, marketers are first and foremost focused on brand building and corporate positioning in an attempt to reestablish a unique identity for the marketing function. "Brand awareness is the number one priority for marketing folks, but it does continue to be a very challenging attribute for marketing to measure success in."
The industry continues to favor print advertising for the majority of marketing spending. Gerard says broadening the message will be vital as technology customers become increasingly experienced buyers. "We are at a point where customers and prospects are more educated and more knowledgeable, so vendors will be leveraging more channels to have greater reach."
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