Tech Marketing Budgets to Increase 3% on Average in the First Half of 2005 with Some Vendors Increasing Spending 15% or More, According to IDC

FRAMINGHAM, MA – MARCH 10, 2005 – IDC's CMO Advisory research service projects that the marketing budgets of IT vendors will increase by an average of 3% during the first six months of 2005. While many vendors are planning to keep their marketing budgets flat or make incremental investments, nearly half plan to increase their marketing budgets by 5% or more. IDC predicts that marketing spending may accelerate during the remainder of 2005, depending on overall IT spending levels, which are a leading indicator of marketing investment increases. IDC is forecasting a 6% increase in worldwide IT spending for 2005.

In addition to these spending trends, IDC's latest research sees a new breed of technology marketing leaders emerging. About 20% of marketers are viewed as holding a "leadership" position where, through successes in execution, organizational coordination, and performance measurement capabilities, among other factors, these leaders have earned the ability to expand the marketing charter. This expanded charter includes leading the company in market targeting and product direction, in contrast to deferring these critical processes to engineering or sales.

"Marketing leaders view their role as the 'Voice of the Customer' during product and strategy discussions. They share a seat at the table with the CEO, they are empowered with appropriate resources and resource increase, and they run an efficient and accountable marketing organization," said Michael Gerard, research director for IDC's CMO Advisory Research Service.

IDC believes that the new breed of technology marketing leaders are driving the group of tech vendors planning to expand their marketing investment by at least 10% in 2005. "While the objective is not to be the vendor with the largest marketing budget, it is apparent that budget increases correlate well to those marketers who have demonstrated execution success," noted Gerard. "These leaders have successfully secured additional investment to pursue the next phase of their marketing strategy. By their actions, these leaders are seen in sharp contrast to the majority of companies who remain at high risk of being under-funded."

Across the tech industry, about 10% of vendors are seen decreasing their marketing budgets; 45% of vendors are holding their budgets steady or increasing investment by up to 5%; 25% are increasing investment between 5-15%; and 20% of vendors are increasing investment more than 15%.

In the new report, 2005 Tech Marketing Barometer: Marketing Leaders Expand their Charter (IDC #32992), IDC analyzes the level and direction of overall tech marketing spending to help guide IDC clients with their marketing investment and allocation decisions. This study includes information collected from surveys and interviews with senior marketing leadership at 66 hardware, software and information technology services vendors, as well as telecommunications service providers. The study also compares and contrasts results with IDC's CMO Advisory 2004 Technology Marketing Benchmarks Survey. This landmark research surveyed over 100 of the largest and most influential tech vendors, representing approximately $370 billion in total revenue and over $13 billion in marketing spend. Tech marketing investment insight is the cornerstone of the IDC CMO Advisory – a research service that provides analysis and insight to help IT marketers improve the productivity and efficiency of their marketing practice.

To purchase this document, call IDC's Sales hotline at 508-988-7988 or email sales@idc.com.

For more information about IDC's CMO Advisory Service, please visit www.idc.com/cmo .

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

All product and company names may be trademarks or registered trademarks of their respective holders.

###