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How Much Should You Spend on Marketing and What Exactly Should it be Spent On

If the first question is, “What percentage of revenue to spend on marketing” then the second question is, “How should that amount be spent by marketing activity?

These are annually recurring questions for us all. This month we noticed a Gartner report highlighting trends in marketing spend overall and in activities such as eCommerce. This Gartner 2015-2016 CMO Spend Survey Report helps answer these questions by telling us what 330 B2B and B2C organizations did in 2015 and plan to do in 2016.

Please read the report for yourselves but here are our key takeaways with respect to industrial suppliers:

1. Online or Digital Marketing is now MAINSTREAM – “98% of marketers affirm that offl-ine and online marketing are merging”. What started as a separate online marketing activity now needs to be considered and incorporated into your overall marketing activities. Company websites are now key focal points for any industrial supplier’s marketing, their product catalog, configurators (if applicable) and CAD models are key to the user experience delivered and user satisfaction achieved.

2. Companies are increasing their marketing budgets – marketing budgets increased to an average of 11 percent of corporate revenue in 2015 from 10 percent in 2014 and two out of three marketers expect their budgets to continue to grow in 2016. The report doesn’t break this out by industry but does explain that larger marketing budgets are needed to fund growing expectations from marketing. Senior management’s expectations of marketing’s responsibility have increased the most over the last year in these 4 areas:

  • eCommerce (referred to as ‘digital commerce’ in the report) – 40%
  • Innovation in Marketing – 40%
  • Converting Leads to Sales – 37%
  • Improvements in Customer Retention – 36%

3. 33% of marketing budgets are spent on technology – and nearly a third of that (28%) goes on infrastructure. However “solutions such as subscriptions and cloud-based services allow marketers to circumvent the need for corporate IT“. Therefore industrial suppliers should use cloud based services to maximize their marketing spend on actual marketing rather than on IT infrastructure!

4. eCommerce/Digital Commerce is SURGING – “11% the digital marketing budget now goes to digital commerce”. This is up from 8% year over year, making it the highest area of increase and the top-ranked area of investment for marketing technology. Interestingly B2C and B2B “dedicate nearly the same share of their budgets to digital commerce” which indicates recent acceleration by B2B companies. Industrial suppliers should move ahead with eCommerce to gain at least temporary competitive advantage but, at the very least, monitor their competitors’ eCommerce initiatives to ensure they don’t get left behind.

5. Marketing and selling merging as an integrated, closed loop discipline – As digital and marketing blur together both B2B and B2BC companies are investing heavily and using digital commerce initiatives to build more direct bridges to their end customers. This in turn is blurring marketing and sales from two disciplines into one. Industrial companies should anticipate the same and start preparing their organizations for this outcome.

Let us know what you think by commenting below, calling or clicking either button below – especially if you want to discuss how to improve your industrial website, marketing, or eCommerce capabilities.



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