MassTLC, IDC study, 2010 marketing study

1. Tech Marketing in 2010:
Investment and Budgeting Trends,
Forecast, and Essential Guidance
Rich Vancil
Vice President, CMO Advisory Service
Executive Advisory Group, IDC
Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

2. What Does It Cost to Create a
New B2B Tech Customer?
Sales and Marketing Cost Envelope
Marketing Awareness Building
(1.5% of revenue)
Marketing Demand Generation
(1.5% of revenue)
Sales
(11% of revenue)
13%
of Total Revenue
Source: IDC
© IDC Mar-10

3. The Ebb and Flow of Marketing Budgets
Year-on-Year Investment Change*
10%
5%
3.2% 3.5%
2003 2009
0%
2004 2005 2006 2007 2008 2010
-5% (4.5%)
IT global revenue growth
IT global marketing investment growth (8.3%)
-10%
* Constant Currency (US$ values based on an average of 2008 calendar year exchange rates)
Source: IDC’s CMO Tech Marketing Benchmarks and Barometer Studies 2003–2010 and
IDC Q4 ’09 Black Book
© IDC Mar-10

4. You DO Have Enough Marketing Budget!
• Marketing $$ are ALWAYS scarce.
• Re-deploying dollars is easier than asking
for new dollars.
© IDC Mar-10

5. Barometer Reading:
Revenue Growth Sentiment
Q. How do you EXPECT expect your revenue to grow in 2010,
compared with IDC’s Overall forecast of + 3.2% ?
$3B or more 24% 12% 65%
$1B to $2.9B 50% 50%
Less than $1B 50% 5% 45%
Percent of Respondents
Significantly higher (>6%) About the same Significantly lower (<1%)
Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)
© IDC Mar-10 5

6. Barometer Reading:
Marketing Budget Sentiment
Q. Will your Marketing Budgets change in 2010?
Don’t know 4%
No
change
20% No
change
Increase 29% Increase
Decrease 60% 54%
20%
Decrease
13%
1st Half ’10 2nd Half ’10
Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)
© IDC Mar-10 6

7. And the Final Tally:
Marketing Budget Outlook for 2010
Q. Will your Marketing Budgets change in 2010?
Marketing Investment Change,
Max.
2009 to 2010
6.4% 5.9%
0.6%
Average
$1B–<$3B
<$1B
Min.
$3B+
Source: IDC’s Technology Marketing Barometer, 2010 (n = 44)
© IDC Mar-10 7

8. Marketing Budgets in Detail
© IDC Mar-10 8

9. “Programs + People” =
100% of Your Marketing Budget
Programs (60%) People (40%)
Analyst relations 2% Product/industry/solution mktg. 25.4%
Other 3%
Field mktg. support 15.5%
PR 4%
Marketing comm. 6.8%
Market intel.
5% Digital mktg. 6.4%
Collateral Direct mktg. 5.6%
Advertising
5%
21% Campaign mgmt. 5.5%
Partner mktg. 5.4%
Direct
marketing Event mktg. 4.8%
11% Events Marketing ops. 4.8%
18% Market intel. 3.9%
Digital
marketing PR 3.1%
13% Marketing
support & Advertising 2.2%
sales tools Sales enablement 2.1%
18%
Analyst relations 1.9% % of Total
Technical mktg. 1.9% Marketing Staff
Source: IDC’s CMO Advisory’s 2009 Tech Marketing Benchmarks Study
© IDC Mar-10 9

10. Trends in Marketing Program Budget
Allocations
Program Allocation for Hardware, Software and Services Companies
Analyst
Other
Public Relations Relations
3%
4% 2%
Market
Intelligence Advertising
5% 21%
Collateral Print and broadcast
advertising down
5% year-on-year
Direct Marketing
Social networking 11%
and digital events
remain high- Events
growth 18%
investment areas
Digital Marketing • Continued push toward
13% smaller, more targeted
proprietary events
Marketing • Significant drop in
Support & Sales tradeshow investment
Tools
18%
© IDC Mar-10 10

11. How Do You Allocate Your
Digital Marketing Program Mix?
Program
Social
SEO Networks
3%
7% Display Ads
24%
Digital Events
9%
Web Site
17%
E-mail
Marketing
19%
Search
Ads
19%
*2009 Tech Marketing Benchmarks Database (n=75): program spend only
© IDC Mar-10 11

12. The Shifting Flow of New vs.
Traditional Media in Marketing Budgets
Q. What marketing program areas
will grow or decline in 2010?
Digital mktg.**
Direct mktg.
MSST*
Events (in-person)
PR* Decrease
MI* Increase
Advertising
AR*
Collateral
% of Respondents
Source: IDC’s Technology Marketing Barometer, 2010 (n = 45)
© IDC Mar-10 12

13. Digital Program Priorities for 2010:
Q. What Digital Marketing program areas
will grow or decline in 2010?
Company web site
Social networks/comm.
Digital events*
SEO Decrease
Increase
Search/display ads
Email marketing
% of Respondents
Source: IDC’s Technology Marketing Barometer, 2010 (n=45)
© IDC Mar-10 13

14. Trends in Marketing Staff Allocations
Q. Please indicate the allocation of full-time marketing employees in each of the following areas
at the close of your current fiscal year.
Product, Industry, and Solution Marketing 25.4%
Field Marketing Support 15.5%
Marketing Communications 6.8%
Digital Marketing 6.4%
Direct Marketing 5.6%
Campaign Management 5.5%
Partner Marketing 5.4%
Event Marketing 4.8%
Marketing Operations 4.8%
Market Intelligence 3.9%
Public Relations 3.1%
Advertising 2.2%
Sales Enablement 2.1%
Analyst Relations 1.9%
Technical Marketing 1.9%
0% 5% 10% 15% 20% 25% 30%
*2009 Tech Marketing Benchmarks Database (n=76) % of Total Marketing Staff
© IDC Mar-10 14

15. Some Thoughts on Building Marketing
Budgets and Organizations
© IDC Mar-10 15

16. The Challenge:
Marketing’s Execution Is Bound by “Silos”
Advertising
Field
Product
Marketing Analyst Marketing
Marketing
Communications Relations
Market Public Industry Regional
Intelligence Relations Marketing Marketing
Managers
Direct Event
Marketing Marketing Solution Country
Marketing and Local
Digital and Marketing Marketing
Social Operations Managers
Corporate Product Field
Marketing Marketing Marketing
© IDC Mar-10 16

17. Don’t Think Silos … Think Circles
Corporate
Advertising
Public
Events
Relations
Campaign Sales
Management Enablement
Product Product Sales Sales
Line 1 Line 2 Region 1 Region 2
Product Product Sales Sales
Line 3 Line 4 Region 3 Region 4
Product Field
© IDC Mar-10 17

18. An Emerging Organization Challenge for
2010: The Sales and Marketing “Mash-Up”
Chief Sales Officer
Advertising
Field Sales VPs
Product
Marketing Analyst Marketing
Marketing
Communications Relations
Market Public Regional Regional/
Industry Marketing Country/
Intelligence Relations Marketing Managers Local
Sales
Direct Event
Marketing Marketing Solution Country Channel
Marketing and Local Sales and
Digital and Marketing Marketing Operations
Social Operations Managers
Corporate Product Field Sales
Marketing Marketing Marketing
© IDC Mar-10 18

19. Sales & Marketing Expenses:
Growing Faster than Revenues in 2010
Year-on-Year Investment Change*
10%
5% 4.7%
3.2% 3.5%
2003 2009
0%
2004 2005 2006 2007 2008 2010
IT global revenue growth
-5% (4.5%)
IT global marketing investment growth
IT global sales investment growth
(8.3%)
-10%
* Constant Currency (US$ values based on an average of 2008 calendar year exchange rates)
Source: IDC’s CMO Tech Marketing Benchmarks and Barometer Studies 2003–2010 and
IDC Q4 ’09 Black Book
© IDC Mar-10 19

20. Marketing Organizational Changes
Expected in 2010
Less centralization/regional
and BU empowerment
Organizational Change Type
Creation of marketing shared
services centers
More outsourcing
2010
Change in sr. mktg. leadership in 2009
past 12 and/or next 12 months
More centralization
Increasing organizational structure
alignment between mktg. & sales
Respondents Planning on This Change
© IDC Mar-10 20

21. Sales and Marketing Alignment: Priority
Areas for Improved Alignment Abound
Q. Where are Marketing and Sales most poorly aligned ?
CXO-level marketing & sales
Sales support needs
Integration of planning & budgeting
Lead management infrastructure
Lead management process
Shared metrics for mktg. & sales
Less vs. More
Aligned
Source: IDC’s Technology Marketing Barometer, 2009 (n = 44)
© IDC Mar-10 21

22. IDC Essential Guidance for Marketing
Executives for 2010
• “Bundle” your new budget requests with
budget savings
• Do not lose control over the “Three Pillars” of
Marketing
• Create new Sales Enablement Tools
• “Go Digital” with strong corporate-led digital
marketing operations.
© IDC Mar-10 22

23. Marketers: Embrace Sales in 2010!
What’s the
Worst that
Could Happen?
© IDC Mar-10 23

24. The CMO Advisory Practice Team
Rich Vancil
Vice President, EAG
rvancil@idc.com
Phone: 508-935-4327
Joe Ferrantino
Research Analyst
jferrantino@idc.com
Phone: 508-988-6973
© IDC Mar-10 24

25. Appendix
IDC Tech Marketing Barometer Study.
March, 2010
Survey Participant list and demographics
© IDC Mar-10

26. IDC Marketing Barometer 2010:
Respondent List
 Actuate  Hitachi  ON24
 Adobe Consulting  Red Hat
 Autodesk  Infosys  Ricoh Americas
 Avanade  Ingram Micro  RWD
 Avaya  Insight  SAP Total Revenue:
 Brocade  Intechra  Siemens
 CGI  Intel Enterprise $290b
 Compuware  Intuit Communications
 CSC  Kronos  SunGard
 CSG  Lenovo  Sybase Average
 ECI  Lexmark  Symantec Revenue:
 FICO  The Mathworks  Tektronix
 Microsoft  Teradata $7b
 Freescale
Semiconductor  NetApp  Unisys
 FTI Consulting  Novell  VeriSign
 Getronics  Xerox
© IDC Mar-10

27. February 2010:
Marketing Budget Survey Respondents
Respondents by Title Respondents by Primary Industry
Other 7%
Chief Marketing
Marketing Manager Services
Officer Hardware
9% 27%
20% 31%
Director of Marketing
31%
VP of Marketing
33% Software
42%
Respondents by Revenue
$10B or more Less than $500M
18% 18%
$3B to under $10B
20% $500M to under $1B
26%
$1B to under $3B
18%
© IDC Mar-10 27