Technology firms, which suffered through a tough year of contracting IT spending in 2002, are downplaying brand marketing in favor of sales-focused initiatives, according to a survey of marketing executives.
In a survey undertaken by the CMO Council in December 2002, which was conducted by GlobalFluency and the Aberdeen Group, 350 high-tech chief marketing officers weighed in on their marketing plans for this year. Most notably, the poll found the focus shifting to marketing activities likely to show an immediate return, rather than on the less tangible brand-building campaigns that were in favor during the boom days.
CMOs are “getting much more tactical in the activities they are undertaking,” said Hugh Bishop, a senior vice president at Aberdeen. “Everyone in a sense becomes a sales person.”
When asked to name the most important ways to measure the performance of their organizations, marketing executives put leads generated at the top of the list, while branding finished No. 4, behind press and analyst influence and sales closed.
The focus on ROI comes after two years of stagnant IT spending, when sluggish growth led to sharp cutbacks in marketing budgets. Three out of four CMOs said they went through downsizing or reorganization in 2003. Almost half of respondents thought the retrenchment made their organizations better.
However, most analysts have called for IT spending to return to growth this year, albeit at a much slower pace than the dizzying double-digit growth rates the industry enjoyed for so many years.
As a result, Bishop said high-tech firms had been forced to get smarter about how they spend their marketing dollars, picking and choosing marketing opportunities with an eye always on the bottom line.
The areas marketing departments are focused on include strategic planning, public relations and internal communications. Further down the list are trade shows, hospitality events, and advertising.
Big spending on TV advertising appears to fallen out of favor with many technology firms. During this year’s Super Bowl, a number of technology firms, including EDS, decided to remain on the sidelines. Likewise, The New York Times reported today that Amazon has decided to end its $50 million a year in TV advertising.
While brand advertising is not popular, interactive marketing is positioned to play a bigger role in marketing plans. Fifty-three percent of marketing executives gave “Web presence and Internet marketing” a high priority for their organizations. Low-cost initiatives like e-mail campaigns and Webinars are two areas CMOs see growing, according to the survey.
“I think that the industry is a little bit more tested and battle hardened and it will not go rushing ahead as in previous days,” he said.
Asked to list the tech companies that have done the best job adjusting to this changed reality, respondents put IBM, Microsoft and Dell at the head of the class. The laggards included HP, which rolled out a $350 million marketing campaign last year, Oracle, and Sun Microsystems.
The survey found cautious optimism among marketing executives: 93 percent of respondents planned to expand their marketing headcount but only 37 percent expected bigger budgets.