Business-to-business marketers are in a confident mood, according to B2B Marketing’s annual State of the Market survey, carried out in association with LBM, with 67 per cent describing their market as ‘buoyant’ or ‘very buoyant’. This is marginally higher than the figure in the 2005 State of the Market survey, which was 63 per cent. Yet since last year, the number of practitioners who believe the market to be in decline has risen slightly to nine and a half per cent, which perhaps balances out the figures. Just under one quarter of respondents believe their market is static.
News was less positive regarding budgets (see Figure 2), with the number of marketers reporting a decline in budgets during the last 12 months rising fractionally from 13 to 15 per cent between 2005 and 2006. However, the vast majority of companies report that budgets have either remained static (44 per cent) or increased (42 per cent). Similarly, optimism for the coming year remains high, with 54 per cent of respondents expecting marketing budgets to grow (exactly the same as last year) and only eight per cent predicting a decline (slightly higher).
Board-level and inter-departmental support: Generally, B2B marketers report good relations and support from the board, with 71 per cent describing attitudes towards, and understanding of, marketing to be either ‘excellent’ (28 per cent) or ‘good’ (43 per cent). Only five per cent described relationships as ‘poor’. The trend in relationships appears to be one of gradual improvement, with 48 per cent reporting a positive change in the last 12 months, and only eight per cent claiming relations have worsened.
Marketing also appears to be marginally ahead of sales, in terms of its strategic role in most B2B companies, with 28 per cent of companies reporting that marketing takes the lead role, which compares with 23 per cent of companies where sales is the dominant discipline. In the remaining companies, both disciplines function on an equal footing.
Relationships with the IT department, which are growing in importance given marketing’s increasing reliance on technology, are a mixed bag, with 50 per cent of companies describing IT as ‘actively supportive’, although the second largest group (38 per cent) admit that ‘IT and marketing sometimes conflict’. Managing this relationship, and the radically different cultures inherent within each department, is likely to become a more significant area of concern for marketers.
Measurement and ROI: Encouragingly, the survey revealed a strong acknowledgement of the importance of measurement, with 88 per cent describing it as ‘important’ or ‘critical’. Arguably though, there is still room for improvement; the ‘critical’ figure was still just below 50 per cent of respondents. Worryingly, three per cent described measurement as ‘not important’.
The most popular method of measurement (see Figure 3) was ‘leads generated’ (70 per cent) followed by ‘response rates’ (63 per cent), ‘online tracking tools’ and ‘sales generated’ (both 59 per cent), ‘campaign analysis’ (41 per cent), ‘market research’ (33 per cent), ‘customer service levels’ (24 per cent) and ‘cost-per-sale’ (22 per cent). It is perhaps surprising that only three metrics were used by over 50 per cent of companies, and whilst not all of these will be relevant to all marketers, it would appear likely that most practitioners are still yet to utilise all the measurement opportunities available. They are therefore missing opportunities to improve their marketing.
More encouragingly, 70 per cent of respondents describe ROI as either ‘important’ or ‘critical’, suggesting that the majority of marketers understand the need for being responsive to the business.
Marketing mediums: B2B marketers are continuing to use a broad array of marketing mediums to reach their target audience. Unsurprisingly, the most popular was DM (65 per cent), followed closely by email and print advertising (both 62 per cent). Events and telemarketing were next, both on 48 per cent, followed by online advertising (43 per cent) and sponsorship (32 per cent).
Despite the hype, search marketing is only being used by seven per cent of B2B marketers, whilst outdoor appears to have priced itself out of the market, falling to five per cent.
Intriguingly, it seems that traditional forms of marketing are not losing out to newer mediums, with DM and print advertising benefiting from the biggest increases in expenditure in the last 12 months, along with email marketing. Print and DM also benefited from the biggest allocations of budget during the last year (see Figure 1), and B2B marketers predict this trend will be repeated in the coming year.
For the second year running, email was shown to be the most effective B2B marketing medium, although DM was shown to be far more effective than last year (see Figure 4). Exhibitions were third, closely followed by telemarketing, which put in a good performance despite the growing impact of the Corporate Telephone Preference Service (CTPS).
Response rates: There are few clear conclusions to be drawn from a comparison of DM and email response rates from this survey. A marginally larger number of marketers expect a response rate of over two per cent through email (50 per cent compared with 44 per cent for DM). Otherwise, there is little to choose between them, although given that the cost of designing and sending emails is dramatically lower than traditional DM, this arguably puts it significantly ahead and perhaps explains why this medium continues to attract interest and budget, despite its many detractors.
Professional bodies: The Chartered Institute of Marketing (CIM) remains the most popular trade body in marketing, and counts 37 per cent of respondents of this survey amongst its membership. This is marginally down from last year, when the figure was 42 per cent. However, as in 2005, the second most popular response to this question (29 per cent) was ‘none’, indicating that almost one third of B2B marketers have no trade body that they feel allied to, or which represents their requirements or interests.
This should be cause for concern amongst the CIM, and perhaps more importantly by the Institute of Direct Marketing (IDM), of which only 13 per cent are a member, and the Direct Marketing Association (DMA), which could count on five per cent. It would appear that trade associations have much work to do to tailor their offerings to meet the needs of the B2B community.
Biggest challenges: For the second year running, the two biggest areas of concern for B2B marketers for the coming year will be ‘making use of limited marketing budgets’ and ‘grasping new marketing channels and techniques’ (see Figure 5). However, in 2005 these two attracted just under one third of responses each, wheras in 2006 the former had dropped back marginally to 24 per cent. This may be seen as surprising, given the interest in new channels such as podcasting, but perhaps reflects growing awareness of these opportunities, and a decline of ignorance. The issue of budgets is a perennial problem, which can be expected to remain the chief concern for the foreseeable future. It is arguably the defining characteristic of the B2B sector.
The third biggest area of concern was identified by respondents as ‘securing board-level commitment’, despite the fact that almost 50 per cent believe that board have become more supportive in the last 12 months. Perhaps there is still some way to go. Meanwhile, ‘lack of good quality data’ and ‘the state of the economy’ were both cited by 10 per cent or less of respondents.
