Tech Marketing Investment Projected to Increase by 6.4% in 2005, The Fastest Rate of Increase in 4 Years, According to IDC
FRAMINGHAM, MA – SEPTEMBER 13, 2005 – The IDC CMO Advisory Service projects that IT vendor marketing budgets will increase by 6.4% for the full year 2005. This is the fastest rate of increase over the past four years. Based on IDC's recently completed Technology Marketing Benchmarks survey, IDC expects marketing investment to continue to show strong growth over the next twelve months and will increase by 7% in 2006.
IDC analysts find that as tech vendors begin to more fully realize that revenue and share gains are harder to come by in the slower growth IT economy, sustained marketing investment is required to make real progress in revenue and share gains. "This is the dawn of tech marketing," said Rich Vancil, vice president with IDC's CMO Advisory Service. "The only tech vendors who will survive and thrive will be those whose marketing organization is highly skilled – both for internal and external execution."
IDC has found that as tech marketers seek to build their capabilities, many of them are turning their attention inside the marketing organization to improve their "back office," including improvements in processes, people development, and organizational alignment. "Leading marketers are focusing on developing their infrastructure and organization because the job of marketing is getting harder," added Vancil. "These executives understand that their ability to make significant future contributions will require greater marketing proficiencies than what they have today."
To accomplish these goals, IDC sees a renewed investment in marketing hiring and professional development. IDC closely tracks the industry average Program-to-People ratio, the percentage of each marketing dollar invested in programs versus people who execute those programs. This now stands at 63.5%, a 4.2% decrease over 2004, which indicates that CMOs are making "net new" hiring decisions. Key areas for new marketing staff increases include product marketing, direct marketing, and marketing operations. In IDC's analysis, the rise of the marketing operations function is one of the most significant new trends for 2005. Approximately 75% of tech vendors now have some level of formalized marketing operations staff in place while the average tech vendor has three marketing operations staff for every 100 full time marketing staff.
"We concur with IDC's findings," said Chris Ewert, director of marketing operations at Adobe Systems Incorporated, who recently joined Adobe to lead its Marketing Operations function. "Adobe leadership wanted to get ahead of the curve and establish a centralized role that would manage cross-functional operations," he said. "My role is to formalize the operational component of marketing."
Mikel Irizar, director of Worldwide Marketing Operations at Symantec also agrees with IDC's research. "Symantec continues to build its marketing operations function as a key role for facilitating the management and optimization of the business of marketing."
The new survey and analysis is from IDC's CMO Advisory Service, the tech industry's most comprehensive benchmarking and advisory offering for tech marketing leadership. "This is IDC's third year in administering and analyzing marketing resource management issues and we are now able to provide valuable year-on-year trending information," said Michael Gerard, research director for the CMO Advisory Service. "Over the last three years of analyzing the overall ROI of marketing, IDC analysis now shows a direct correlation of marketing investment increase and revenue growth."
In the study, Marketing Budget Planner 2006: Benchmarks and Key Performance Indicators (IDC #33943), IDC provides a comprehensive analysis of qualitative and quantitative marketing investment priorities, marketing-mix decisions, and operational and organization information for many of the world's leading and most influential technology vendors. This study is based on 95 interviews conducted with senior marketing executives of the leading IT hardware, software, and services vendors, including Adobe, Cisco, EMC, Intel, SAP, and Symantec, representing over $300 billion in IT revenues and over $9 billion in marketing spending. The Tech Marketing Benchmarks analysis is the cornerstone of the IDC CMO Advisory, a research service that provides analysis and insight to IT marketers to improve the productivity and efficiency of their marketing practice.
For more information on the IDC CMO Advisory service, contact Louise Revers at 508-988-6915 or firstname.lastname@example.org.
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
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