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Marketing Budgets 2011
in association with SAS SAMPLE ONLY. Please download the full report from:
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Marketing Budgets 2011
Published
February 2011
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright Š Econsultancy.com Ltd 2011
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Contents 1. Executive Summary and Highlights ................................ 1 2. Introduction by SAS......................................................... 3 3. About Econsultancy ......................................................... 4 4. About SAS ........................................................................ 5 5. Findings ........................................................................... 6 5.1.
Marketing budgets ...................................................................... 6 5.1.1. 5.1.2. 5.1.3. 5.1.4. 5.1.5. 5.1.6. 5.1.7. 5.1.8. 5.1.9. 5.1.10.
5.2.
Investment in technology and resources .................................. 24 5.2.1. 5.2.2. 5.2.3.
5.3.
Annual marketing budget ............................................................................ 6 Proportion of budget spent on digital ..........................................................7 Plans for overall marketing budget ............................................................. 9 Increase in overall marketing budget ........................................................ 11 Plans for digital marketing budget ............................................................. 12 Increase in digital marketing budget ......................................................... 14 Plans for traditional (offline) marketing budget........................................ 15 Increase in traditional (offline) marketing budget .................................... 17 Change in budgets for digital marketing channels ....................................18 Change in budgets for offline marketing channels .................................... 21 Investment in digital marketing team....................................................... 24 Plans for digital marketing technology spend .......................................... 26 Investment in digital marketing technologies .......................................... 28
Marketing effectiveness and ROI ............................................. 30 5.3.1. 5.3.2. 5.3.4. 5.3.5. 5.3.6.
Understanding of ROI from digital channels ........................................... 30 Understanding of ROI from traditional marketing channels ................... 32 Ability to measure ROI from digital channels .......................................... 34 Metrics to measure marketing effectiveness............................................. 36 Barriers to further investment .................................................................. 38
6. Appendix: Methodology and Sample ............................ 40 6.1. 6.2.
Methodology .............................................................................. 40 Respondent profiles .................................................................. 40 6.2.1. 6.2.2. 6.2.3. 6.2.4. 6.2.5. 6.2.6. 6.2.7. 6.2.8.
Respondents .............................................................................................. 40 Geographic location .................................................................................... 41 Job roles ...................................................................................................... 41 Job function ............................................................................................... 42 Type of companies – supply-side respondents ......................................... 42 Industry sector........................................................................................... 43 B2B / B2C focus ......................................................................................... 44 Annual company revenue .......................................................................... 45
Marketing Budgets 2011 in association with SAS All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright Š Econsultancy.com Ltd 2011
1.
Executive Summary and Highlights The Econsultancy / SAS Marketing Budgets 2011 Report is based on a survey of more than 500 company and agency marketers carried out in December 2010 and January 2011. The report, which follows a similar study 12 months ago, looks at relative levels of planned spending this year across a range of marketing channels, comparing online and offline budgets while also looking at planned investment on different types of marketing technology. The results reflect an improving economic outlook with just over half (52%) of companies increasing their overall marketing budgets for 2011, up from 47% the same time a year ago. Digital continues to be a focus for increasing marketing budgets. Nearly three-quarters (72%) of responding companies say their digital marketing budgets are increasing this year, and this figure is up from 68% a year ago. Last year’s survey results suggested that the growth of digital channels was coming at the expense of traditional channels such as direct mail, television and printed media. Marketers were more likely to be decreasing their budgets in offline channels rather than increasing them. While digital continues to be buoyant, there is a more nuanced picture with television and radio channels in particular enjoying increased levels of investment compared to a year ago. While digital continues to grow, the improved economic environment has improved the fortunes of some offline marketing channels. The effectiveness and measurability of digital is giving companies confidence that offline marketing investment is also paying dividends. There is evidence to suggest that companies are becoming more reliant on digital marketing technology. Companies are most likely to be investing in business analytics and web analytics software, with 45% of respondents saying that spending on this will increase in 2011. This focus reflects the on-going need to understand and measure the effectiveness of marketing channels, and how they relate to each other. Surprisingly, despite increased investment in web analytics and maturity of some online marketing channels, the perceived ability to understand ROI from digital marketing is actually decreasing. Fewer companies than last year say that their understanding of their returns from digital channels is “very good” (20% this year compared to 27% last year), while a higher percentage of companies say their understanding is “poor” (11% compared to 7% in 2010).
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Other recent Econsultancy reports and content 2011 Digital Marketing Trends - Webinar http://econsultancy.com/uk/reports/webinar-trends-presentation Econsultancy / cScape Customer Engagement Report http://econsultancy.com/uk/reports/media-growth-trends How to Create Amazing Facebook Pages (Best Practice Guide) http://econsultancy.com/uk/reports/how-to-create-amazing-facebook-pages DSPs Buyer’s Guide http://econsultancy.com/uk/reports/dsps-buyers-guide Social Gaming Smart Pack http://econsultancy.com/uk/reports/social-gaming-report Media Growth Trends http://econsultancy.com/uk/reports/media-growth-trends SEO Agencies Buyer’s Guide http://econsultancy.com/uk/reports/seo-agencies-buyers-guide Internet Statistics Compendium http://econsultancy.com/uk/reports/seo-agencies-buyers-guide Online Media Report http://econsultancy.com/uk/reports/online-media-report
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2.
Introduction by SAS It has been our great pleasure to work with Econsultancy to bring you this year’s Marketing Budgets 2011 report. The marketing environment we all face continues to evolve in unexpected and radically new ways. The proliferation of new channels, and changes in how we communicate through these channels, continues to put significant pressure on both our marketing budgets, and the skills and imagination of marketing professionals. Digital media allows us to reach out to audiences previously unreachable, to communicate unique messages to each person, and to understand the impact of what we do far more precisely. This has opened the door for companies, be they B2C, B2B or agencies, to take innovative new marketing approaches. This innovation is reflected in the survey’s results which show the focus of marketing budgets continues to adjust from year to year as new approaches are tried. The growth of digital media has also created a marketing environment rich in data; one in which those companies best able to analyse the data and convert it into action are gaining a significant advantage over their competitors. The SAS® Customer Intelligence portfolio provides the complete set of capabilities needed for a data-driven, customer-focused marketing process. By improving on all areas of this process we can help organisations address the challenges of driving profitable revenue growth, optimising resource investments and continuously improving results. How? Deepen customer insight To gain insight into what your customers will do in the future, you have to first understand what they have done in the past. SAS enables you to manage customer data and understand the behaviour patterns of your best and worst customers. By having insight into your customers’ attitudes, behaviour, profitability and risk, you can make smarter decisions for your marketing organisation. Choreograph customer interaction Customers want to feel as though companies understand them – and they expect to be treated consistently. A well-orchestrated marketing campaign requires coordination and synchronisation across multiple channels. SAS provides the ability to choreograph a comprehensive, multichannel marketing communication strategy that optimises every resource to effectively achieve your goals and maximise your ROI. Continuously improve marketing performance To ensure your marketing organisation works efficiently, it is critical to implement a closed-loop marketing process that makes adjustments over time. SAS provides the scorecards, reporting and underlying analytical capabilities needed to instil accountability and have complete visibility of your marketing process and the resulting performance, so you can make midcourse corrections when the need arises. As the complexity of the marketing environment continues to increase, we will continue to develop the solutions you need to increase the effectiveness of your marketing, and prosper from these opportunities.
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3.
About Econsultancy Econsultancy is a digital publishing and training group used by more than 200,000 internet professionals every month. The company publishes practical and time-saving research to help marketers make better decisions about the digital environment, build business cases, find the best suppliers, look smart in meetings and accelerate their careers. Econsultancy has offices in New York and London, and hosts more than 100 events every year in the US and UK. Many of the world's most famous brands use Econsultancy to educate and train their staff. Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder. Join Econsultancy today to learn what’s happening in digital marketing – and what works. Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact us online.
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4.
About SAS For over 35 years analytics has been synonymous with SAS. From identifying shopping preferences in loyalty card data to spotting fraudulent transactions on credit cards, our analytical software is the solution of choice for any organisation that needs to gather, analyse, and find the insight hidden in their data. Our analytical capabilities lie at the heart of everything we do, and in today’s data rich world they are becoming increasingly critical for organisations seeking to make the best decisions you can, giving you THE POWER TO KNOW®. But SAS is about a lot more than just analytics. Every year we work hard to understand our customers’ issues and create solutions that address specific industry and department needs. In fact we invested 24% of our revenue last year in research and development to do just this. Today SAS provides the most complete and integrated suite of customer intelligence solutions in the market. This is why SAS was placed as a leader in both Gartner’s 2010 Magic Quadrant for CRM Multichannel Campaign Management, and Forrester’s 2009 Cross-Channel Campaign Management Wave. Our relentless customer focus doesn’t stop at creating brilliant solutions for our customers. We understand we can only be successful if you are successful. So we do everything we can to support you. With an award winning education service to support your professional skills development, a large and growing SAS Professionals user community, and a dedicated customer support team based in our Marlow office, you can be assured that help is always at hand. 35 years of uninterrupted profitable growth has made SAS the largest independent privately owned software company in the world. The stability this provides us with allows us to focus on our long-term relationships with our customers, invest in our R&D, and gives you the assurance that we will be there to support you today and tomorrow.
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5.
Findings
5.1.
Marketing budgets
5.1.1.
Annual marketing budget The vast majority of companies surveyed (70%) have an annual marketing budget of at least £100,000. A quarter (25%) of companies have a budget of between £100,000 and £500,000. Some 10% of companies have a marketing budget of more than £25m, including 3% which have more than £100m to spend on marketing annually.
Companies Figure 1: What is your company's annual marketing budget?
Respondents: 216
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5.1.2.
Plans for digital marketing budget While only around half (52%) of companies say they will increase their overall marketing budgets, close to three-quarters (72%) say their digital marketing budgets are increasing this year. This compares to 68% last year. Only 4% say they are planning to decrease digital budgets this year, the same percentage as in last year’s survey.
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Plans for digital marketing budget by company revenue
Less than £10m
Increase
Keep the same
Decrease
74%
18%
8%
£10m-£100 million £100m-250m £250m-£500m £500m - £1bn £1bn - £5bn Greater than £5bn
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5.2.
Investment in technology and resources
5.2.1.
Investment in digital marketing team Just over half of companies surveyed (52%) are planning to recruit more people into their digital marketing teams this year. This is a reflection of the increased focus on digital marketing which is resulting in an obvious need for the relevant skills. The Impact of Digital1 report, published by Econsultancy in association with Blue Latitude last year, found that two thirds of companies (68%) have difficulty recruiting staff who are sufficiently knowledgeable about digital. This included 56% who said they had “some difficulty” and 12% who said they had “major difficulty”. From the perspective of agencies [Figure 20], there is an even bigger push towards recruitment, with 70% of supply-side respondents saying that their clients are typically planning to recruit more people into their internet marketing teams.
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1
http://econsultancy.com/uk/reports/impact-of-digital
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5.2.2.
Plans for digital marketing technology spend Two-thirds (67%) of companies say they are increasing their spending on digital marketing technology in 2011. Companies are increasingly investing in a range of technologies to manage their marketing campaigns and to ensure that they are using their budgets as efficiently as possible.
Companies Figure 2: What best describes your plans for digital marketing technology spending in 2011?
Respondents: 193
Plans for digital marketing technology spending – split by B2B / B2C Increase
Keep the same
Decrease
B2B B2C Both equally
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5.3.
Marketing effectiveness and ROI
5.3.1.
Understanding of ROI from digital channels More than half of client-side respondents (59%) claim they have a very good (20%) or good (39%) understanding of return on investment from digital marketing channels.
Companies Figure 3: How do you rate your understanding of ROI from digital marketing channels?
2011 respondents: 189 2010 respondents: 215
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6.
Appendix: Methodology and Sample
6.1.
Methodology The Econsultancy / SAS Marketing Budgets 2011 Report is based on a survey of more than 500 client-side marketers and agency respondents. Information about the online survey was emailed to Econsultancy’s user base of internet professional and marketers, and promoted online via Twitter and other channels during December 2010 and January 2011. The incentive for taking part in the survey was access to a complimentary copy of this report just before its publication on the Econsultancy website. Econsultancy and SAS, the research sponsor, would like to thank those who took the time to complete the questionnaire. If you have any questions about the research and methodology, please email Econsultancy's UK Research Director, Linus Gregoriadis (Linus@econsultancy.com).
6.2.
Respondent profiles A total of 503 respondents took part in the survey, including 252 “client-side professionals or marketers” and 210 “supply-side” respondents (including agency marketers and those working for technology vendors or other service providers). For the purposes of this report, we have carried out separate analysis for both these groups and the distinction is abbreviated to “companies” (including not-for-profit organisations) and “agencies” (including vendors).
6.2.1.
Respondents Figure 4: Which of the following most accurately describes your job role?
Respondents: 503
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6.2.2.
Geographic location The vast majority of survey respondents (83%) are UK-based. Some 15% are based in Europe (not including the UK) and 2% are located in the US.
Figure 5: In which country are you (personally) located for work?
Respondents: 372
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6.2.3.
Job roles Figure 39 shows the job roles for client-side respondents taking part in the survey. The most common job title is manager (48%), followed by director / VP (21%) and then board-level executive or business owner (14%).
Companies Figure 6: Which best describes your job role?
Respondents: 218
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6.2.4.
Job function The chart below indicates the job function of client-side respondents, and shows that almost a third of respondents (32%) are CMOs or heads of marketing. A quarter (25%) of respondents work in an online, digital or e-commerce capacity. Some 16% work in general marketing.
Companies Figure 7: Which best describes your job function?
Respondents: 187
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6.2.5.
Type of companies – supply-side respondents Just under a third of supply-side respondents (31%) work for full-service digital agencies. Almost a fifth cited “other”, which in this context refers to other types of agency, including research agencies, user experience consultancies, mobile media agencies, as well as other niche specialists.
Figure 8: What type of company do you work for?
Respondents: 183
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6.2.6.
Industry sector The respondents in this survey work across a wide variety of different sectors, including financial services (11%), retail (10%), and travel / entertainment / leisure (10%). Some 20% of respondents said they work in “other” sectors which in this context includes software, market research, property, and construction.
Companies Figure 9: Which of the following best describes the industry your organisation operates in?
Respondents: 216
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6.2.7.
B2B / B2C focus Some 42% of client-side respondents are focused on B2B, while a third (31%) are B2C-focused. Just over a quarter (27%) are focused equally on both B2B and B2C.
Companies Figure 10: Is your business focused more on B2B or B2C?
Respondents: 217
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Just under a third of agencies say their clients are B2B-focused (31%), while 39% say their clients focus on B2C. Some 30% of agencies say their clients are focused equally on B2B and B2C.
Agencies Figure 11: Typically, are your clients focused more on B2B or B2C?
Respondents: 190
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6.2.8.
Annual company revenue The chart below shows the range in size of the companies represented in this survey. Some 41% of companies have annual revenues of under £10m, while just over a quarter (27%) turn over between £10m and £100m. Just over a fifth (21%) of companies surveyed have a turnover of more than £500m.
Companies Figure 12: What is your annual company revenue?
Respondents: 215
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