ITSMA Budget Study 2011 Abbreviated Summary

B022SS

Services Marketing Budgets and Benchmarks:2011 Budget Allocations and TrendsJanuary 2011Abbreviated Summary

Prepared by:

Julie Schwartz

Senior Vice President

Research and Thought Leadership

ITSMA

ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 2

Table of Contents

Slide

Key Trends 3

Survey Methodology and Demographics 4

Survey Highlights 9

Appendix: Table of Contents for Services Marketing Budgets and

Benchmarks: 2011 Budget Allocations and Trends, January 201123

Appendix: Definitions Used in This Report 24


Key Trends

ITSMA members are projecting

double-digit services revenue

growth

Services marketing budgets,

after reaching an all time low as

a percentage of revenue, are

returning to historical levels:

between 1% and 2% of revenue

Half the survey respondents

also anticipate marketing staff

increases

Although growing in

importance, social media is still

a small percentage of the

marketing budget

Marketers are investing in

online and social media

marketing, which are critical to

improving relevancy

Despite client desire for greater

intimacy, marketers are

spending less aggressively on

programs at the later stages of

the buying process

To achieve better buyer

relevancy and client intimacy,

marketers need to re-examine

marketing spending allocation

and invest in talent and

systems to support an

expanded marketing focus


Survey Methodology and Demographics


Study Participants

http://www.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4w3cjUDSUGYpvqRKGIG8Y4IkSB9b31fj_zcVP0A_YLc0IhyR0dFAJgg_-M!/delta/base64xml/L3dJdyEvd0ZNQUFzQUMvNElVRS82X0FfMkU2

http://www.trizetto.com/index.asp


Methodology

Online Web-based survey

Survey invitations were emailed during December 2010 and January

2011 to ITSMA member and select non-member companies

46 representatives from 45 companies responded

Number of Companies

Invited to Participate

Number of Companies

Responded

Response

Rate

101 45 45%

Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011

http://www.itsma.com/research/2011-budget-allocations-and-trends/



ITSMA 2011 Budget Allocations and Trends Study Quality Control

Participation by invitation only

One response per marketing organization

All respondents screened for:– ITSMA member marketing community relevance

– Budget authority

Rigorous post-data collection cleaning– Validate responses

– Check for consistency

– Remove outliers


*Office equipment, industrial automation, test and measurement, etc.


Study Participants

46 respondents from 45 companiesAlcatel-Lucent

Atos Origin

Avanade, Inc.

Avaya

Aviat Networks

Black & Veatch

BT

CA Technologies

Capco

Capgemini

CGI

Cisco

Cognizant

CompuCom

CSC

EMC

Event 360

Fujitsu

Geehan Group

Hewlett-Packard

IBM Global Business Services

Infosys Technologies

Infotech

KPIT Cummins Infosystems Ltd.

KPMG

Lenovo

Microsoft Corporation

Nokia Siemens

Networks

Northrop Grumman

Oracle

Patni

Philips Healthcare

Rimini Street, Inc.

SAP

SBS Group

Siemens Enterprise

Communications

SITA

Steria

Symantec

Talent Partners

Tata Consultancy

Services

The TriZetto Group

Wipro Technologies

Wood Mackenzie

Xerox

Which of these categories best describes your industry subsector?% of Respondents (N=46)

Software solutions provider (13%)

Professional services firm (52%)

Network systems and

solution provider (7%)

Other* (11%)

Computer systems

and solutions

provider (9%)

Telecommunications

services provider (9%)




Survey Highlights


EMEA

Growth Rate

(N=15)

Worldwide

Growth Rate

(N=29)

North America

Growth Rate

(N=16)

Asia/Pacific

Growth Rate

(N=13)

ITSMA members are projecting growth

What was the percentage growth rate of your company or division revenue?

Mean % of Growth


9.5 9.58.0

12.412.213.7

10.5

15.7

FY2010/2009 FY2011/2010 (est.)




With marketing budgets also projected to grow, marketers can increase focus on relevancy and intimacy while maintaining investments in lead generation and management

In FY2011, do you

expect your

marketing budget

to increase,

decrease,

or stay the same

when compared to

FY2010?

% of Respondents

(N=46)

Average

increase: 15%

Average

decrease: 8%

59%

15%

26%





EMEA

(N=19)

Worldwide

(N=33)

North America

(N=21)

Asia/Pacific

(N=16)

Services marketing budgets, after reaching an all time low as a percentage of revenue, are returning to historical levels: between 1% and 2% of revenue

What was the size of your annual marketing budget as a percentage of

revenue? Mean % of Revenue


1.4 1.3

0.8

1.0

1.6 1.6

0.9

1.3

FY2010/2009 FY2011/2010 (est.)




Marketing staff is also expected to grow


What changes do

you anticipate in

your marketing

staff in FY2011?

Will the number of

FTEs (full-time

equivalents)

increase, decrease,

or stay the same?

% of Respondents

(N=45)

Average

increase: 8%

Average

decrease: 6%

53%

11%

36%




Marketers are increasing their spend on demand generation, sales enablement and content generationWhat are your spending plans in FY2011 for the following budget categories?

% of Respondents (N~44)


64

58

52

49

47

45

40

34

33

20

20

4

2

7

18

9

3

4

7

12

15

25

31

40

41

33

44

53

56

59

56

65

55

Increase Decrease Stay the Same

Demand generation and lead management

Sales (channel) enablement and support

Content development

Brand and communications

Offering management

Business partners/alliances

Strategy and market planning

Market intelligence/competitive intelligence

Customer satisfaction/relationship management and monitoring

Marketing operations

Other




Marketing still needs to feed the pipeline, but we are starting to see a shift in priorities to also encompass client intimacy

Rank

2011 2010 2009 2008

1 2 4 3 Generating demand

2 1 1 2 Enabling the sales force

3 5 2 1 Differentiating/re-positioning the company, brand, or offerings

4 3 7 5 Developing thought leadership content that drives business

5 7 9 11 Measuring marketing’s impact on the business

6 6 6 10Increasing focused marketing programs for vertical/industry

markets

7 16 11 8 Increasing use of Account-Based Marketing

8 17 17 12Deepening customer insight to improve segmentation and increase

personalization

9 27 – –Building or enhancing a more effective lead management and

nurturing model

10 – – –Increasing cross-divisional marketing programs and messaging

(minimizing marketing silos)

Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2007, 2008, 2009, 2010, 2011






71

64

47

44

42

38

36

29

27

20

18

4

Client focus

Vertical market/industry expertise

Business development/sales-driven

Digital media

Collaboration

Strategic planning

Analytical

Cross-silo systems thinking

Creativity | Project management

Writing

Research | Ability to experiment and adjust course

Technology | Other

Marketers intuitively recognize the need to increase relevancy and intimacy

Note: Up to 5 responses allowed.


Which of the following marketing skills do you believe are essential to your

organization’s future success? % of Respondents (N=45)




Online marketing

Social media

Direct marketing

Collateral

Industry analyst relations

Private events, seminars, and conferences

Public/press/media/community relations

Advertising

Public trade shows

Sponsorships

Other

Marketers are investing in online and social media marketing, which are critical to improving relevancy

How do you anticipate the components of the marketing mix changing in

FY2011? Will spending increase, decrease, or stay the same?

% of Respondents (N~40)


82

81

48

36

35

35

30

21

12

6

26

5

5

28

27

14

8

21

54

41

15

14

14

25

36

65

51

63

59

35

53

59

Increase Decrease Stay the Same




…But online and social media marketing are still a small percentage of the total marketing budget

37 33

1814

913

99

87

88

711

2 32 2

FY2010 FY2011 (est.)

Other

Mobile marketing and apps

Social media

Client extranets or Microsites

Intranet and internal collaboration

Webinars

Search engine optimization (SEO)/paid search/online advertising

Email, electronic newsletters

Corporate Website

How was your Interactive/Online/Digital Marketing spend allocated

across the following categories?

Mean % Interactive/Digital Marketing Budget (N=30)

4.3% Interactive/Online/Digital Marketing


Total Marketing

Budget




Despite client desire for greater intimacy, marketers are spending less aggressively on programs at the later stages of the buying processWhat are your spending plans in FY2011 for the following budget categories?

% of Respondents Increasing Spending (N~41)


67

57

50

49

45

43

43

34

30

19

21

Demand generation and lead management

Sales (channel) enablement and support

Brand and communications

Content development

Offering management

Business partners/alliances

Strategy and market planning

Market intelligence/competitive intelligence

Customer satisfaction/relationship management and monitoring

Marketing Operations

Other

Loyalty programs, senior client

engagement programs, service

quality and client satisfaction

monitoring, reference management,

customer councils, user group or

community management




Nevertheless, budget is flowing in the right direction

How is your marketing budget (including staff) allocated among these activities?

Mean % (N=31)


48 45

2928

23 27

FY2010 FY2011 (est.)

Retention, loyalty, and growth

Pipeline progression

Lead generation




In 2011, services and solutions marketers must seize the opportunity to increase buyer relevancy and client intimacy to achieve trusted advisor status

Stage 2. AWARENESS

Stage 3.

INTEREST

Stage 4.

CONFIDENCE

Stage 1.

EPIPHANY

Buying

Process

Relationship

Stages

Stage 6.

TRUST

Partnership

Explore

mutually

beneficial

initiatives

Provide

references

and advocacy

Stage 5.

LOYALTY

Post-Purchase

Evaluation

Evaluate

satisfaction

Measure

value

delivered

Stage 4.

CONFIDENCE

Selection and

Purchase

Select the

provider

Negotiate

the contract

Ultimate

sign-off

Stage 3.

INTEREST

Alternative

Evaluation

Finalize the

short list

Solicit

proposals

Evaluate

alternatives

Stage 2.

AWARENESS

Search

Clarify

objectives

and solution

specifications

Identify

alternatives

(short list)

Stage 1.

EPIPHANY

Need

Recognition

Explore the

possibilities

Identify a

need or

opportunity


To achieve better buyer relevancy and client intimacy, marketers need to:

Re-examine marketing spending

allocation

Expand marketing focus to:– Build greater relevancy

– Create intimacy

Invest in talent and systems to

support the expanded

marketing focus


Appendix: Table of Contents for Services Marketing Budgets and Benchmarks: 2011 Budget Allocations and Trends, January 2011

Slide

Survey Highlights 3

Survey Methodology and Demographics 28

Size of the Marketing Budget 52

Services Revenue Growth 60

Marketing Staffing 64

Services Marketing Budget Allocation 93

The Marketing Mix 123

Marketing Operations and Automation 144

Marketing Priorities 159

Appendix: Definitions Used in This Report 170


Appendix: Definitions Used in This Report FY: Fiscal Year

Size of the Marketing Budget: Calculate marketing spend as a % of revenue. Include staff expenses. When calculating a

specific marketing budget, use the corresponding revenue. For example, use total revenue in EMEA to calculate the size of

the marketing budget in EMEA.

Major Categories of the Marketing Budget

– Strategy and Market Planning: Market segmentation, opportunity analysis, core competency identification, brand and

positioning

– Market Intelligence/Market Research: Competitive analysis, voice of the customer, market research—syndicated or

custom, for tracking and analyzing industry and competitor trends

– Offering Management: Develop and oversee service products and programs, including voice of the customer and

offering related market research, new offer development, lifecycle management, portfolio management, pricing, go-to-

market strategy, value proposition development

– Content Development: Development of marketing content, including thought leadership, case studies, and reference

materials; identifying, evaluating, researching ideas

– Brand and Communications: Marketing program development and execution to communicate who you are and what

you do: brand communications, advertising, PR, analyst and influencer relations, Website, SEO, Intranet, social media,

word of mouth, sponsorships

– Demand Generation and Lead Management: For specific offerings/industries: marketing program/campaign creation

and execution, including events (on- and off-line), direct marketing, telemarketing, database marketing, lead

nurturing/pipeline progression

– Sales (Channel) Enablement and Support: Account-Based Marketing programs, bid and proposal support, tools,

training, other support, guidance, and management for the sale of services via a corporate sales force, partners, channel

firms, etc. Do NOT include direct sales expense here (commissions, salaries, travel expense, etc.)

– Customer Satisfaction/Relationship Management and Monitoring: Loyalty programs, service quality and client

satisfaction monitoring, reference management, customer councils, user group or community management

– Marketing Operations: Marketing staff training and professional development, marketing management, marketing

software and tools, metrics, and analytics

– Business Partners/Alliances: Partner strategies and programs, relationship management, and partner communications

– Other: Could include travel and entertainment, corporate allocation, administration, or anything else that did not fit in the

above buckets but is part of the marketing budget


For More Information

This report is available free to companies that provided

detailed data in the study.

If your company is on this list you are

entitled to receive the report for free,

please send us an email (using your

company email) and request your free

report. Orders will be processed the

next business day.

For non-participating companies, this

report is available for sale at member

and nonmember prices. To order, click

the “Buy” button at the top of this

page.

See if your company is an ITSMA

member

Download the datasheet (including

order form) PDF (272 KB)

Email ITSMA for more information

For more ITSMA research, visit ITSMA’s Online Library at

http://www.itsma.com/research/online-library/

Julie SchwartzSenior Vice PresidentResearch and Thought LeadershipITSMAEmail: [email protected]: +1-781-862-8500, Ext. 112

To Purchase the Study

Alcatel-Lucent

Atos Origin

Avanade, Inc.

Avaya

Aviat Networks

Black & Veatch

BT

CA Technologies

Capco

Capgemini

CGI

Cisco

Cognizant

CompuCom

CSC

EMC

Event 360

Fujitsu

Geehan Group

Hewlett-Packard

IBM Global Business

Services

Infosys Technologies

Infotech

KPIT Cummins

Infosystems Ltd.

KPMG

Lenovo

Microsoft Corporation

Nokia Siemens Networks

Northrop Grumman

Oracle

Patni

Philips Healthcare

Rimini Street, Inc.

SAP

SBS Group

Siemens Enterprise

Communications

SITA

Steria

Symantec

Talent Partners

Tata Consultancy

Services

The TriZetto Group

Wipro Technologies

Wood Mackenzie

Xerox

Member price: $595

Non-Member price: $995

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ITSMA Budget Study 2011 Abbreviated Summary

Business

survey respondents

survey methodology

budget allocations

marketing staffto

marketing budgetsystems

key trendsitsma members

abbreviated summaryprepared

respondents n