Idc Mass Tlc March 18 2010 Final

Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Tech Marketing in 2010: Investment and Budgeting Trends, Forecast, and Essential Guidance

Rich Vancil

Vice President, CMO Advisory Service

Executive Advisory Group, IDC

Mar-10© IDC

What Does It Cost to Create a New B2B Tech Customer?

13% of Total Revenue

Marketing Awareness Building(1.5% of revenue)

Marketing Demand Generation(1.5% of revenue)

Sales(11% of revenue)

Sales and Marketing Cost Envelope

Source: IDC

Mar-10© IDC

The Ebb and Flow of Marketing Budgets

Source: IDC’s CMO Tech Marketing Benchmarks and Barometer Studies 2003–2010 and IDC Q4 ’09 Black Book

* Constant Currency (US$ values based on an average of 2008 calendar year exchange rates)

IT global revenue growth

IT global marketing investment growth

10%

5%

0%

-5%

-10%

2003

2004 2005 2006 2007 2008

2009

2010

Year-on-Year Investment Change*

(8.3%)

(4.5%)

3.5%3.2%

Mar-10© IDC

You DO Have Enough Marketing Budget!

• Marketing $$ are ALWAYS scarce.

• Re-deploying dollars is easier than asking

for new dollars.

Mar-10© IDC

Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)

Barometer Reading: Revenue Growth Sentiment

Q. How do you EXPECT expect your revenue to grow in 2010,

compared with IDC’s Overall forecast of + 3.2% ?

Percent of Respondents

$3B or more

$1B to $2.9B

Less than $1B

24% 12% 65%

50% 50%

50% 5% 45%

Significantly higher (>6%) About the same Significantly lower (<1%)

5

Mar-10© IDC

Increase60%Decrease

20%

No change

20%

Increase54%

Decrease13%

No change

29%

Don’t know 4%

Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)

Barometer Reading: Marketing Budget Sentiment

Q. Will your Marketing Budgets change in 2010?

1st

Half ’10 2nd

Half ’10

6

Mar-10© IDC

And the Final Tally:Marketing Budget Outlook for 2010

<$1B

$3B+Min.

Max.

Average

$1B–<$3B

5.9%0.6%

6.4%

Source: IDC’s Technology Marketing Barometer, 2010 (n = 44)

Ma

rke

tin

g In

ve

stm

en

t C

ha

ng

e,

20

09

to

20

10

Q. Will your Marketing Budgets change in 2010?

7

Mar-10© IDC

Marketing Budgets in Detail

8

Mar-10© IDC

“Programs + People” = 100% of Your Marketing Budget

Source: IDC’s CMO Advisory’s 2009 Tech Marketing Benchmarks Study

Programs (60%)

Advertising21%

Events18%

Marketingsupport & sales tools

18%

Digitalmarketing

13%

Directmarketing

11%

Other 3%Analyst relations 2%

PR 4%

Market intel. 5%

Collateral 5%

People (40%)

% of Total Marketing Staff

Product/industry/solution mktg.

Field mktg. support

Marketing comm.

Digital mktg.

Direct mktg.

Campaign mgmt.

Partner mktg.

Event mktg.

Marketing ops.

Market intel.

PR

Advertising

Sales enablement

Analyst relations

Technical mktg.

25.4%

15.5%

6.8%

6.4%

5.6%

5.5%

5.4%

4.8%

4.8%

3.9%

3.1%

2.2%

2.1%

1.9%

1.9%

9

Mar-10© IDC 10

Trends in Marketing Program Budget Allocations

Program Allocation for Hardware, Software and Services Companies

Advertising

21%

Events

18%

Marketing

Support & Sales

Tools

18%

Digital Marketing

13%

Direct Marketing

11%

Collateral

5%

Public Relations

4%

Analyst

Relations

2%

Other

3%

Market

Intelligence

5%

Social networking

and digital events

remain high-

growth

investment areas

• Continued push toward

smaller, more targeted

proprietary events

• Significant drop in

tradeshow investment

Print and broadcast

advertising down

year-on-year

Mar-10© IDC 11

*2009 Tech Marketing Benchmarks Database (n=75): program spend only

How Do You Allocate Your Digital Marketing Program Mix?

Program

Display Ads

24%

E-mail

Marketing

19%

Search

Ads

19%

Web Site

17%

Digital Events

9%

SEO

7%

SocialNetworks

3%

Mar-10© IDC

Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)

The Shifting Flow of New vs. Traditional Media in Marketing Budgets

Q. What marketing program areas

will grow or decline in 2010?

Increase

Decrease

Digital mktg.**

Direct mktg.

MSST*

Events (in-person)

PR*

MI*

Advertising

AR*

Collateral

% of Respondents

12

Mar-10© IDC

Source: IDC’s Technology Marketing Barometer, 2010 (n=45)

Digital Program Priorities for 2010:

Increase

Decrease

Company web site

% of Respondents

Social networks/comm.

Digital events*

SEO

Search/display ads

Email marketing

Q. What Digital Marketing program areas

will grow or decline in 2010?

13

Mar-10© IDC 14

Trends in Marketing Staff Allocations

Q. Please indicate the allocation of full-time marketing employees in each of the following areas

at the close of your current fiscal year.

1.9%

1.9%

2.1%

2.2%

3.1%

3.9%

4.8%

4.8%

5.4%

5.5%

5.6%

6.4%

6.8%

15.5%

25.4%

0% 5% 10% 15% 20% 25% 30%

Technical Marketing

Analyst Relations

Sales Enablement

Advertising

Public Relations

Market Intelligence

Marketing Operations

Event Marketing

Partner Marketing

Campaign Management

Direct Marketing

Digital Marketing

Marketing Communications

Field Marketing Support

Product, Industry, and Solution Marketing

% of Total Marketing Staff*2009 Tech Marketing Benchmarks Database (n=76)

14

Mar-10© IDC

Some Thoughts on Building MarketingBudgets and Organizations

15

Mar-10© IDC

The Challenge:Marketing’s Execution Is Bound by “Silos”

Corporate

Marketing

AnalystRelations

MarketingCommunications

Direct Marketing

Event Marketing

Digital and Social

MarketingOperations

Advertising

MarketIntelligence

PublicRelations

ProductMarketing

IndustryMarketing

Solution Marketing

Product

Marketing

Field

Marketing

FieldMarketing

RegionalMarketing Managers

Country and Local Marketing Managers

16

Mar-10© IDC

Corporate

PublicRelations

Events

Advertising

CampaignManagement

Don’t Think Silos … Think Circles

Product Field

SalesEnablement

Sales Region 3

Sales Region 4

Sales Region 2

Sales Region 1

ProductLine 3

ProductLine 4

ProductLine 2

ProductLine 1

17

Mar-10© IDC

An Emerging Organization Challenge for 2010: The Sales and Marketing “Mash-Up”

Sales

ChannelSales and

Operations

Regional/Country/

LocalSales

Sales VPsProduct

Marketing

IndustryMarketing

Solution Marketing

Product

Marketing

Corporate

Marketing

AnalystRelations

MarketingCommunications

Direct Marketing

Event Marketing

Digital and Social

MarketingOperations

Advertising

MarketIntelligence

PublicRelations

Field

Marketing

FieldMarketing

RegionalMarketing Managers

Country and Local Marketing Managers

Chief Sales Officer

18

Mar-10© IDC

(8.3%)

(4.5%)

Sales & Marketing Expenses: Growing Faster than Revenues in 2010

Source: IDC’s CMO Tech Marketing Benchmarks and Barometer Studies 2003–2010 and IDC Q4 ’09 Black Book

* Constant Currency (US$ values based on an average of 2008 calendar year exchange rates)

IT global revenue growth

IT global marketing investment growth

10%

5%

0%

-5%

-10%

2003

2004 2005 2006 2007 2008

2009

2010

Year-on-Year Investment Change*

3.5%3.2%

19

IT global sales investment growth

4.7%

Mar-10© IDC

Marketing Organizational Changes Expected in 2010

Less centralization/regional and BU empowerment

Respondents Planning on This Change

2010

2009

Org

an

izati

on

al C

ha

ng

e T

yp

e

Creation of marketing shared services centers

More outsourcing

Change in sr. mktg. leadership in past 12 and/or next 12 months

More centralization

Increasing organizational structure alignment between mktg. & sales

20

Mar-10© IDC

Source: IDC’s Technology Marketing Barometer, 2009 (n = 44)

Sales and Marketing Alignment: Priority Areas for Improved Alignment Abound

Q. Where are Marketing and Sales most poorly aligned ?

Less vs. More Aligned

CXO-level marketing & sales

Sales support needs

Integration of planning & budgeting

Lead management infrastructure

Lead management process

Shared metrics for mktg. & sales

21

Mar-10© IDC

IDC Essential Guidance for Marketing Executives for 2010

• “Bundle” your new budget requests with budget savings

• Do not lose control over the “Three Pillars” of Marketing

• Create new Sales Enablement Tools

• “Go Digital” with strong corporate-led digital marketing operations.

22

Mar-10© IDC

Marketers: Embrace Sales in 2010!

What’s the

Worst that

Could Happen?

23

Mar-10© IDC

The CMO Advisory Practice Team

Joe FerrantinoResearch [email protected]: 508-988-6973

Rich VancilVice President, EAG [email protected]: 508-935-4327

24

Mar-10© IDC

Appendix

IDC Tech Marketing Barometer Study.

March, 2010

Survey Participant list and demographics

Mar-10© IDC

IDC Marketing Barometer 2010: Respondent List

Actuate

Adobe

Autodesk

Avanade

Avaya

Brocade

CGI

Compuware

CSC

CSG

ECI

FICO

Freescale Semiconductor

FTI Consulting

Getronics

Hitachi Consulting

Infosys

Ingram Micro

Insight

Intechra

Intel

Intuit

Kronos

Lenovo

Lexmark

The Mathworks

Microsoft

NetApp

Novell

ON24

Red Hat

Ricoh Americas

RWD

SAP

Siemens Enterprise Communications

SunGard

Sybase

Symantec

Tektronix

Teradata

Unisys

VeriSign

Xerox

Total Revenue:

$290b

AverageRevenue:

$7b

Mar-10© IDC

February 2010: Marketing Budget Survey Respondents

Respondents by Revenue

Less than $500M18%

$1B to under $3B18%

$500M to under $1B26%

$3B to under $10B20%

$10B or more18%

Chief Marketing Officer20%

VP of Marketing33%

Marketing Manager9%

Other 7%

Director of Marketing31%

Respondents by Title

Hardware31%

Software42%

Services27%

Respondents by Primary Industry

27