Econsultancy Marketing Budgets 2011 Report

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Marketing Budgets 2011

in association with SAS SAMPLE ONLY. Please download the full report from:

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Marketing Budgets 2011

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Copyright © Econsultancy.com Ltd 2011

Published February 2011

Marketing Budgets 2011 in association with SAS

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage

and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

Contents

1. Executive Summary and Highlights ................................ 1

2. Introduction by SAS......................................................... 3

3. About Econsultancy ......................................................... 4

4. About SAS ........................................................................ 5

5. Findings ........................................................................... 6

5.1. Marketing budgets ...................................................................... 6

5.1.1. Annual marketing budget ............................................................................ 6

5.1.2. Proportion of budget spent on digital ..........................................................7

5.1.3. Plans for overall marketing budget ............................................................. 9

5.1.4. Increase in overall marketing budget ........................................................ 11

5.1.5. Plans for digital marketing budget ............................................................. 12

5.1.6. Increase in digital marketing budget ......................................................... 14

5.1.7. Plans for traditional (offline) marketing budget ........................................ 15

5.1.8. Increase in traditional (offline) marketing budget .................................... 17

5.1.9. Change in budgets for digital marketing channels .................................... 18

5.1.10. Change in budgets for offline marketing channels .................................... 21

5.2. Investment in technology and resources .................................. 24

5.2.1. Investment in digital marketing team ....................................................... 24

5.2.2. Plans for digital marketing technology spend .......................................... 26

5.2.3. Investment in digital marketing technologies .......................................... 28

5.3. Marketing effectiveness and ROI ............................................. 30

5.3.1. Understanding of ROI from digital channels ........................................... 30

5.3.2. Understanding of ROI from traditional marketing channels ................... 32

5.3.4. Ability to measure ROI from digital channels .......................................... 34

5.3.5. Metrics to measure marketing effectiveness ............................................. 36

5.3.6. Barriers to further investment .................................................................. 38

6. Appendix: Methodology and Sample ............................ 40

6.1. Methodology .............................................................................. 40

6.2. Respondent profiles .................................................................. 40

6.2.1. Respondents .............................................................................................. 40

6.2.2. Geographic location .................................................................................... 41

6.2.3. Job roles ...................................................................................................... 41

6.2.4. Job function ............................................................................................... 42

6.2.5. Type of companies – supply-side respondents ......................................... 42

6.2.6. Industry sector ........................................................................................... 43

6.2.7. B2B / B2C focus ......................................................................................... 44

6.2.8. Annual company revenue .......................................................................... 45

Marketing Budgets 2011 Page 1

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information

storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

1. Executive Summary and Highlights The Econsultancy / SAS Marketing Budgets 2011 Report is based on a survey of more than

500 company and agency marketers carried out in December 2010 and January 2011.

The report, which follows a similar study 12 months ago, looks at relative levels of planned

spending this year across a range of marketing channels, comparing online and offline budgets

while also looking at planned investment on different types of marketing technology.

The results reflect an improving economic outlook with just over half (52%) of companies

increasing their overall marketing budgets for 2011, up from 47% the same time a year ago.

Digital continues to be a focus for increasing marketing budgets.

Nearly three-quarters (72%) of responding companies say their digital marketing budgets are

increasing this year, and this figure is up from 68% a year ago.

Last year’s survey results suggested that the growth of digital channels was coming at the expense

of traditional channels such as direct mail, television and printed media. Marketers were more

likely to be decreasing their budgets in offline channels rather than increasing them.

While digital continues to be buoyant, there is a more nuanced picture with television and radio

channels in particular enjoying increased levels of investment compared to a year ago.

While digital continues to grow, the improved economic environment has improved the

fortunes of some offline marketing channels. The effectiveness and measurability of digital is

giving companies confidence that offline marketing investment is also paying dividends.

There is evidence to suggest that companies are becoming more reliant on digital marketing

technology.

Companies are most likely to be investing in business analytics and web analytics software,

with 45% of respondents saying that spending on this will increase in 2011. This focus reflects

the on-going need to understand and measure the effectiveness of marketing channels, and

how they relate to each other.

Surprisingly, despite increased investment in web analytics and maturity of some online

marketing channels, the perceived ability to understand ROI from digital marketing is actually

decreasing.

Fewer companies than last year say that their understanding of their returns from digital

channels is “very good” (20% this year compared to 27% last year), while a higher percentage

of companies say their understanding is “poor” (11% compared to 7% in 2010).

SAMPLE ONLY. Please download the full report from:






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2. Introduction by SAS It has been our great pleasure to work with Econsultancy to bring you this year’s Marketing

Budgets 2011 report. The marketing environment we all face continues to evolve in unexpected

and radically new ways. The proliferation of new channels, and changes in how we communicate

through these channels, continues to put significant pressure on both our marketing budgets, and

the skills and imagination of marketing professionals.

Digital media allows us to reach out to audiences previously unreachable, to communicate unique

messages to each person, and to understand the impact of what we do far more precisely. This has

opened the door for companies, be they B2C, B2B or agencies, to take innovative new marketing

approaches. This innovation is reflected in the survey’s results which show the focus of marketing

budgets continues to adjust from year to year as new approaches are tried.

The growth of digital media has also created a marketing environment rich in data; one in which

those companies best able to analyse the data and convert it into action are gaining a significant

advantage over their competitors. The SAS® Customer Intelligence portfolio provides the

complete set of capabilities needed for a data-driven, customer-focused marketing process. By

improving on all areas of this process we can help organisations address the challenges of driving

profitable revenue growth, optimising resource investments and continuously improving results.

How?

Deepen customer insight

To gain insight into what your customers will do in the future, you have to first understand what

they have done in the past. SAS enables you to manage customer data and understand the

behaviour patterns of your best and worst customers. By having insight into your customers’

attitudes, behaviour, profitability and risk, you can make smarter decisions for your marketing

organisation.

Choreograph customer interaction

Customers want to feel as though companies understand them – and they expect to be treated

consistently. A well-orchestrated marketing campaign requires coordination and synchronisation

across multiple channels. SAS provides the ability to choreograph a comprehensive, multi-

channel marketing communication strategy that optimises every resource to effectively achieve

your goals and maximise your ROI.

Continuously improve marketing performance

To ensure your marketing organisation works efficiently, it is critical to implement a closed-loop

marketing process that makes adjustments over time. SAS provides the scorecards, reporting and

underlying analytical capabilities needed to instil accountability and have complete visibility of

your marketing process and the resulting performance, so you can make midcourse corrections

when the need arises.

As the complexity of the marketing environment continues to increase, we will continue to

develop the solutions you need to increase the effectiveness of your marketing, and prosper from

these opportunities.







3. About Econsultancy

Econsultancy is a digital publishing and training group used by more than 200,000 internet professionals every month.

The company publishes practical and time-saving research to help marketers make better decisions about the digital environment, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Econsultancy has offices in New York and London, and hosts more than 100 events every year in the US and UK. Many of the world's most famous brands use Econsultancy to educate and train their staff.

Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact us online.



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4. About SAS For over 35 years analytics has been synonymous with SAS. From identifying shopping

preferences in loyalty card data to spotting fraudulent transactions on credit cards, our analytical

software is the solution of choice for any organisation that needs to gather, analyse, and find the

insight hidden in their data. Our analytical capabilities lie at the heart of everything we do, and in

today’s data rich world they are becoming increasingly critical for organisations seeking to make

the best decisions you can, giving you THE POWER TO KNOW®.

But SAS is about a lot more than just analytics. Every year we work hard to understand our

customers’ issues and create solutions that address specific industry and department needs. In

fact we invested 24% of our revenue last year in research and development to do just this. Today

SAS provides the most complete and integrated suite of customer intelligence solutions in the

market. This is why SAS was placed as a leader in both Gartner’s 2010 Magic Quadrant for CRM

Multichannel Campaign Management, and Forrester’s 2009 Cross-Channel Campaign

Management Wave.

Our relentless customer focus doesn’t stop at creating brilliant solutions for our customers. We

understand we can only be successful if you are successful. So we do everything we can to support

you. With an award winning education service to support your professional skills development, a

large and growing SAS Professionals user community, and a dedicated customer support team

based in our Marlow office, you can be assured that help is always at hand.

35 years of uninterrupted profitable growth has made SAS the largest independent privately

owned software company in the world. The stability this provides us with allows us to focus on

our long-term relationships with our customers, invest in our R&D, and gives you the assurance

that we will be there to support you today and tomorrow.







5. Findings

5.1. Marketing budgets

5.1.1. Annual marketing budget

The vast majority of companies surveyed (70%) have an annual marketing budget of at least

£100,000. A quarter (25%) of companies have a budget of between £100,000 and £500,000.

Some 10% of companies have a marketing budget of more than £25m, including 3% which have

more than £100m to spend on marketing annually.

Companies

Figure 1: What is your company's annual marketing budget?

Respondents: 216







5.1.2. Plans for digital marketing budget

While only around half (52%) of companies say they will increase their overall marketing budgets,

close to three-quarters (72%) say their digital marketing budgets are increasing this year. This

compares to 68% last year.

Only 4% say they are planning to decrease digital budgets this year, the same percentage as in last

year’s survey.



Plans for digital marketing budget by company revenue

Increase Keep the

same Decrease

Less than £10m 74% 18% 8%

£10m-£100 million

£100m-250m

£250m-£500m

£500m - £1bn

£1bn - £5bn

Greater than £5bn





5.2. Investment in technology and resources

5.2.1. Investment in digital marketing team

Just over half of companies surveyed (52%) are planning to recruit more people into their digital marketing teams this year. This is a reflection of the increased focus on digital marketing which is resulting in an obvious need for the relevant skills. The Impact of Digital1 report, published by Econsultancy in association with Blue Latitude last year, found that two thirds of companies (68%) have difficulty recruiting staff who are sufficiently knowledgeable about digital. This included 56% who said they had “some difficulty” and 12% who said they had “major difficulty”. From the perspective of agencies [Figure 20], there is an even bigger push towards recruitment, with 70% of supply-side respondents saying that their clients are typically planning to recruit more people into their internet marketing teams.



1 http://econsultancy.com/uk/reports/impact-of-digital


http://econsultancy.com/uk/reports/impact-of-digital




5.2.2. Plans for digital marketing technology spend

Two-thirds (67%) of companies say they are increasing their spending on digital marketing

technology in 2011.

Companies are increasingly investing in a range of technologies to manage their marketing

campaigns and to ensure that they are using their budgets as efficiently as possible.

Companies

Figure 2: What best describes your plans for digital marketing technology spending in 2011?

Respondents: 193

Plans for digital marketing technology spending – split by B2B / B2C

Increase Keep the

same Decrease

B2B

B2C

Both equally







5.3. Marketing effectiveness and ROI

5.3.1. Understanding of ROI from digital channels

More than half of client-side respondents (59%) claim they have a very good (20%) or good

(39%) understanding of return on investment from digital marketing channels.

Companies

Figure 3: How do you rate your understanding of ROI from digital marketing channels?

2011 respondents: 189 2010 respondents: 215







6. Appendix: Methodology and Sample

6.1. Methodology The Econsultancy / SAS Marketing Budgets 2011 Report is based on a survey of more than

500 client-side marketers and agency respondents. Information about the online survey was

emailed to Econsultancy’s user base of internet professional and marketers, and promoted online

via Twitter and other channels during December 2010 and January 2011.

The incentive for taking part in the survey was access to a complimentary copy of this report just

before its publication on the Econsultancy website.

Econsultancy and SAS, the research sponsor, would like to thank those who took the time to

complete the questionnaire. If you have any questions about the research and methodology,

please email Econsultancy's UK Research Director, Linus Gregoriadis ([email protected]).

6.2. Respondent profiles A total of 503 respondents took part in the survey, including 252 “client-side professionals or

marketers” and 210 “supply-side” respondents (including agency marketers and those working

for technology vendors or other service providers).

For the purposes of this report, we have carried out separate analysis for both these groups and

the distinction is abbreviated to “companies” (including not-for-profit organisations) and

“agencies” (including vendors).

6.2.1. Respondents

Figure 4: Which of the following most accurately describes your job role?

Respondents: 503

mailto:[email protected]




6.2.2. Geographic location

The vast majority of survey respondents (83%) are UK-based. Some 15% are based in Europe (not

including the UK) and 2% are located in the US.

Figure 5: In which country are you (personally) located for work?

Respondents: 372







6.2.3. Job roles

Figure 39 shows the job roles for client-side respondents taking part in the survey. The most

common job title is manager (48%), followed by director / VP (21%) and then board-level

executive or business owner (14%).

Companies

Figure 6: Which best describes your job role?

Respondents: 218







6.2.4. Job function

The chart below indicates the job function of client-side respondents, and shows that almost a

third of respondents (32%) are CMOs or heads of marketing. A quarter (25%) of respondents

work in an online, digital or e-commerce capacity. Some 16% work in general marketing.

Companies

Figure 7: Which best describes your job function?

Respondents: 187







6.2.5. Type of companies – supply-side respondents

Just under a third of supply-side respondents (31%) work for full-service digital agencies. Almost

a fifth cited “other”, which in this context refers to other types of agency, including research

agencies, user experience consultancies, mobile media agencies, as well as other niche specialists.

Figure 8: What type of company do you work for?

Respondents: 183







6.2.6. Industry sector

The respondents in this survey work across a wide variety of different sectors, including financial

services (11%), retail (10%), and travel / entertainment / leisure (10%). Some 20% of

respondents said they work in “other” sectors which in this context includes software, market

research, property, and construction.

Companies

Figure 9: Which of the following best describes the industry your organisation operates in?

Respondents: 216







6.2.7. B2B / B2C focus

Some 42% of client-side respondents are focused on B2B, while a third (31%) are B2C-focused.

Just over a quarter (27%) are focused equally on both B2B and B2C.

Companies

Figure 10: Is your business focused more on B2B or B2C?

Respondents: 217







Just under a third of agencies say their clients are B2B-focused (31%), while 39% say their clients

focus on B2C. Some 30% of agencies say their clients are focused equally on B2B and B2C.

Agencies

Figure 11: Typically, are your clients focused more on B2B or B2C?

Respondents: 190







6.2.8. Annual company revenue

The chart below shows the range in size of the companies represented in this survey.

Some 41% of companies have annual revenues of under £10m, while just over a quarter (27%)

turn over between £10m and £100m. Just over a fifth (21%) of companies surveyed have a

turnover of more than £500m.

Companies

Figure 12: What is your annual company revenue?

Respondents: 215




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Econsultancy Marketing Budgets 2011 Report