Idc Mass Tlc March 18 2010 Final

Tech Marketing in 2010: Investment and Budgeting Trends, Forecast, and Essential Guidance Rich Vancil Vice President, CMO Advisory Service Executive Advisory Group, IDC

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

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

You DO Have Enough Marketing Budget!
Marketing $$ are ALWAYS scarce.
Re-deploying dollars is easier than asking for new dollars.

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

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

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

Marketing Budgets in Detail

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

Trends in Marketing Program Budget Allocations Program Allocation for Hardware, Software and Services Companies Social networking and digital events remain high-growth investment areas
Continued push toward smaller, more targeted proprietary events
Significant drop in tradeshow investment
Print and broadcast advertising down year-on-year

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

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

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

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. *2009 Tech Marketing Benchmarks Database (n=76)

Some Thoughts on Building Marketing Budgets and Organizations

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

Don’t Think Silos … Think Circles Corporate Product Field Public Relations Events Advertising Campaign Management Sales Enablement Sales Region 3 Sales Region 4 Sales Region 2 Sales Region 1

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

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

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

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

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.

Marketers: Embrace Sales in 2010! What’s the Worst that Could Happen?

The CMO Advisory Practice Team Joe Ferrantino Research Analyst [email_address] Phone: 508-988-6973 Rich Vancil Vice President, EAG [email_address] Phone: 508-935-4327

Appendix
IDC Tech Marketing Barometer Study.
March, 2010
Survey Participant list and demographics

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

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

Idc Mass Tlc March 18 2010 Final

by Christine Nolan on Mar 19, 2010

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