Marketing spend by high tech and telecom providers to rise in 2010

Marketing spend among high-tech and telecom providers (HTTPs) is picking up in 2010, according to a survey by Gartner. The survey found that 44% of 2010 HTTP marketing budgets will be flat compared with 2009, 41% will increase and only 15% are likely to decrease. This compares favourably to 2009 when more than half of providers’ marketing organisations took cuts in their budgets compared to 2008.

Gartner’s survey was conducted in December 2009 in order to understand the allocation of 2010 marketing budgets for HTTPs and drew on responses from 206 providers worldwide. Hardware, software, IT services, telecommunications and semiconductor companies were all represented in the survey.

While there are signs of growth in IT spending in 2010, Gartner analysts have predicted a “new normal” in which IT buyers who were forced to rethink the entirety of their spending approach because of the economy may never return to their prerecession ways. This will impact how HTTPs market to end users.

“Marketing has to continue to look at becoming more efficient and cost-effective,” said Laura McLellan, research vice president at Gartner. “For some, this means adopting lower-cost alternatives; for others, outsourcing what was once done in-house; for all, it means revisiting how they plan to support the growth of their companies through traditional and new channels, while keeping the core brands strong.”

The survey found that some companies making marketing budget increases plan significant rises. Thirty per cent of these companies expect to increase budgets by between 1% and 15%, while 13% of respondents are planning budget increases of between 16 and 30 per cent or more. For those companies planning an increase in budgets, sales programmes to support the direct sales force as well as programmes supporting positioning and external communications are key priorities. Following those are customer segmentation, strategic marketing, management of marketing efforts and sales programmes to support indirect sales.

Even though the ratio of in-house to external spending is planned to be about 1:3 in 2010, fixed and recurring costs are expected to consume the largest portion (23%) of the 2010 marketing budget, according to the majority of respondents. That will be followed by sales channel marketing and programmes at 17%, and 15% of respondents identified positioning and external marketing communications.

When asked how they allocated their marketing communications budget, 22% of respondents said that events will receive the highest percentage of spending, 16% of those surveyed identified advertising, and 11% of respondents selected direct mail.

“In various inquiries with providers, we found that many marketing managers were of two minds about the 2009 budget cuts,” McLellan said. “On one hand, while they understood the economic pressures, they found the cuts damaging and antithetical to the wisdom expressed by many marketing gurus that in difficult economic times you should maintain or increase your marketing spending to take business away from competitors and prepare for the recovery. On the other hand, some found that the cuts were a call to action to find better and more cost effective ways of doing what needed to be done. The second group also found themselves searching for better ways to measure and show the value of marketing.”

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