When the US sneezes, everybody else catches a cold – or at least, that’s what we’re all led to believe. If this is indeed the case, what does 2008 have in store for b2b marketers around the world?
According to a recent online study conducted by B2B Magazine, a majority of the 684 b2b marketers questioned (58.3%) have not revised their original marketing budgets for 2008 in the face of concerns over a possible US economic recession. 29.4% have revised their marketing budgets down, yet a further 12.3% have actually revised their budgets up.
Marketing budgets often become the first casualties during economic downturns, yet ironically, this is really the time when it’s more important than ever to communicate closely with your existing customers and make potential customers aware of what you can offer to them. The key is to use your budgets wisely in order to ensure maximum efficiency and return on investment.
In the US-based survey, of those who have reduced their marketing budgets in anticipation of a possible downturn, 45.3% are making cuts in print; 17.3% in events; 10.0% in broadcast, 8.7% in direct marketing, 6.0% in online and 2.0% in outdoor. The biggest winners, amongst those who are increasing their spend, include: online (48.5%); direct marketing (16.5%); events (13.5%); print (9.0%) and broadcast (3.0%).
Whether we are all in for a rough ride over the coming months is still open to debate somewhat, but don’t fall into the trap of putting the brakes on your marketing spend, or you’re certain to pay the price in the not-too-distant future.
First of all - A Happy and Prosperous New Year to all our readers!
Although New Year is typically a time to look forward to new events and experiences, we thought we’d break with that convention somewhat in our first post of 2008, by having a quick review of the year just gone on The Market Research Blog. With that in mind, here’s a quick rundown of our most popular posts from 2007, just in case you’re a newcomer to our blog or if you simply missed something we posted in the last year:
From our point of view, 2007 was a big year of expansion for B2B International - especially in terms of getting our Asian office in China up and running as well as unprecedented growth at our central operations in the UK. Naturally, we’re hoping for bigger and better things in the year to come - and we wish you much the same.
We’ll get into the swing of things proper in the next few days with some more of our thoughts on market research, the universe and everything else!
With sluggish trade and less-than-stellar recent stock market performance, Starbucks has recently announced that it would be starting its first ever television advertising campaign in the US.
This, in itself, doesn’t sound like a groundbreaking story – indeed, to institute a marketing blitz when business is slow appears, on the face of it, to be fairly conventional corporate behaviour. However, Starbucks has always tended to shun mainstream marketing methods, instead building its brand upon word-of-mouth and customer evangelism.
But will running a few more ads truly address the high-street giant’s current malaise? Jackie Huba at the Church of the Consumer doesn’t believe so. She instead points to Starbucks having strayed too far from its roots, the result being a diluted version of what made the brand great in the first place:
To save money, Starbucks has:
Switched from hand-pulled espresso shots to automatic espresso machines.
Eliminated the aroma of ground fresh coffee in stores in lieu of "flavor locked packaging."
Streamlined store designs; today, they lack the customized funky cool of yore.
To exploit new revenue sources, Starbucks has also:
Delved into movie producing.
Launched a record label.
Started selling shelf space for book promotions.
When you start dreaming of monetizing seats or places in line, you change the nature of what you once delivered.
Will a brand-building TV ad campaign make people visit stores more often? Probably not.
Starbucks is a beloved brand because of the quality of the store experience. Period. End of story.
And it’s not just marketers who agree with this assessment: Earlier this year, Starbucks chairman Howard Schultz admitted in a leaked internal memo that the company:
… had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, some might call the commoditization of our brand.
The lesson seems to be that where brands are concerned, re-emphasising the things that made you successful in the first place need not be a backwards step.
When a UK-based student spent one of his lazy days making an advert for Apple’s new iPod touch to put on YouTube, probably the last thing he expected was it to be snapped up by the US computing giant and used as part of their TV advertising campaign. But that is precisely what happened.
Companies have always listened to their customers to ensure they have got the finger on the pulse of what their brand stands for. Apple, however, have taken this one step further by actually using their customers’ input first-hand to advertise the brands. After all, no-one knows better what ‘their’ brand means to them than the people who own the brand - the customer.
An article from the New York Times gives the story in more detail below:
Student’s Ad Gets a Remake, and Makes the Big Time By STUART ELLIOTT
Published: October 26, 2007
A television commercial for the new iPod Touch from Apple, scheduled to begin running on Sunday, is being created by the longtime Apple agency, TBWA/Chiat/Day. It is based on a commercial that an 18-year-old English student — an Apple devotee named Nick Haley, who says he got his first Macintosh when he was 3 — created on his own one day last month.
His spot offers a fast-paced tour of the abilities of the iPod Touch, set to a song titled “Music Is My Hot, Hot Sex� by a Brazilian band, CSS.
Mr. Haley said he was inspired to make the commercial by a lyric in the song, “My music is where I’d like you to touch.�
He based the visual elements on video clips about the iPod Touch and other new products, which can be watched on the Apple Web site (apple.com). He uploaded his commercial to YouTube, where it received four stars out of a possible five and comments that ranged from “That’s awesome,� followed by 16 exclamation points, to “Makes me want to buy one and hack it.�
As of yesterday, Mr. Haley’s spot has been viewed 2,131 times on youtube.com. Among the viewers were marketing employees at Apple in Cupertino, Calif., who asked staff members on the Apple account at TBWA/Chiat/Day to get in touch with Mr. Haley about producing a professional version of the commercial.
“I was sitting on the bus and I got this e-mail on my phone,� Mr. Haley, a native of Warwick, England, said in an interview yesterday from the University of Leeds, where he is a “fresher,� or first-year student.
The message said, “ ‘We represent Apple and we’ve seen what you have produced and we’d like a chat with you,’ � Mr. Haley recalled, adding: “This seemed ridiculous and far-fetched. My initial reaction was, someone wanted to steal it.�
He was soon convinced that the message was real and came to Los Angeles this month, in his first visit to the United States, to work on a broadcast-ready version of his spot with creative executives at TBWA/Chiat/Day, part of the TBWA Worldwide division of the Omnicom Group.
“That’s the whole point of advertising; it needs to get to the user,� Mr. Haley said. “If you get the user to make the ads, who better?�
Who better indeed! You can view the advert for yourself below.
Leave us a comment and let us know what you think to Apple’s strategy…
Cicero has conducted and released a significant new study into the world of B2B marketing.
The major piece of market research, carried out in conjunction with industry publication B2B Marketing, gathered detailed data directly from senior practitioners in the field of B2B during 2006.
Cicero managing director Danny Turnbull says, “This is almost certainly the first, and definitely the most in-depth study of its kind ever to probe into the UK B2B landscape, which our data shows is an industry turning over just under £10 billion a year.
“It is long overdue, as B2B marketers have been keen for many years to demonstrate that we are a viable and distinct audience, and cannot simply be dismissed as an adjunct to the higher-profile consumer marketing sector.�
The report, which is now on sale, will prove invaluable to B2B marketers themselves as they seek to make sense of the various challenges confronting them in their daily roles, and to the service sector of agencies and suppliers, seeking to meet the needs and objectives of this audience.
Turnbull continues, “The report in places makes for disquieting reading, as it shows marketing to be undervalued in British businesses, with 37% of respondents even stating that marketing was seen as a cost rather than a value contributor within their business. This is very much at odds with the often-espoused view that marketing should be at the heart of every organization.
“But armed with the new knowledge gleaned from this research, I hope that as an industry we can meet the challenge to balance the need for short term, easy to measure response with a more holistic approach to building business brands and to put marketing where it belongs at the heart of organisation strategy.�
Summary and highlights of the research
It was agreed that one of the main problems the sector had was the low level of understanding and visibility in the wider marketing world. This was hindered by a lack of meaningful, thorough and reliable insight. Therefore the research set out to address this by producing the first comprehensive analysis of the UK B2B marketing industry, the practitioners within it and how it is evolving.
The objective was to help raise the profile of the industry by facilitating greater understanding of its size, scope and the issues that are shaping it, and to further shape and define the B2B community. It was aimed to provide a reliable document that practitioners from all areas of the B2B sector could use as a touchstone to help contextualise their activities, learn from trends in the wider community, and ultimately drive more success in their marketing.
What did we want to know?
There were a number of questions that we wanted to answer through this research.
1. How big is the B2B marketing sector? How many people does it encompass and how much money do they spend?
2. Who are B2B marketers? What are their backgrounds and how has this influenced their thinking going forward?
3. What are the current trends in B2B marketing? Which media are being used for which purposes?
4. How are they investing their budgets and selecting service providers?
5. How is the B2B marketing sector likely to evolve?
Target audience
In order to get an accurate picture of the B2B marketing space, we felt it was important that we only spoke to marketing decision makers; in other words marketing managers or above, but marketing directors wherever possible.
Methodology
Participants were recruited during September 2006 via a telemarketing campaign to a database of B2B marketers, and promised their choice of voucher (from a limited selection) in return for completing an online questionnaire. In all 147 people completed the questionnaire, from a wide range of different companies, in different industry sectors.
Size and scope of the market
The research produced a number of key insights into the B2B marketing sector. The first amongst these was the most accurate indication yet for its size and scale, both in terms of amount of annual spend and number of practitioners.
· Estimated expenditure on B2B marketing communications during 2005: £9.8 billion
· Estimated number of practitioners with marketing in their job title focusing purely on the B2B sector: 176,000
· Estimated number of practitioners with marketing in their job title for whom B2B is at least part of their remit (along with B2C): 272,000
(For more information on how these figures were attained, see the main report.)
These figures confirm that the B2B sector is a significant audience within its own right, and that it should not be seen as simply a subdivision of the overall marketing community. The ‘poor relation’ tag must finally be recognised as unwarranted, and should be discarded.
Key findings
The research also identified some important trends, issues and concerns underlying the B2B marketing sector, which will all have considerable impact on its future development.
1. B2B is a booming market.
Ninety three percent of respondents described themselves as ‘very’ or ‘fairly’ confident about the future economic climate for their organisation. Meanwhile, 90% expected their marketing budget to increase or remain constant in the next two years, and 56% saw it increase in the previous two years.
2. Beyond a website and basic email marketing, use of digital marketing techniques is limited.
Only 52% of companies are currently investing in search marketing, less than 10% have used viral and five percent podcasts/webinars. Despite the hype, actual exposure to and through these channels is very limited, and it is likely that companies are missing opportunities.
3. Email will be the single biggest growth channel in B2B.
This is despite warnings regarding spam, inbox overload and general erosion of response rates. 49% of respondents said they were expecting to invest more money in email during this period, against the next most popular medium, direct mail, on 33%. ‘Awareness raising’ is seen as the primary objective for emarketing.
4. Agencies are not seen as essential.
Over a quarter of B2B practitioners do not currently use any agencies for their marketing, although 40% use three or more. Only 20% of agencies are used in a strategic capacity.
5. B2B marketers are poorly educated.
Only around 50% of B2B marketers have any form of marketing qualification. Three quarters of respondents believe that existing courses are biased towards B2C activity, whilst over half of companies have no budget for training. Only 30% plan to undertake any further marketing-related studies.
6. There is a serious recruitment problem in B2B marketing.
Experienced B2B marketers are difficult to recruit, according to the overwhelming majority of practitioners who have any experience of doing so. Only 40% of B2B marketers followed a marketing career path; the majority transferred from other professions.
7. Trade bodies are failing B2B marketers.
Less than half of practitioners interviewed are members of any of the marketing trade bodies.
Conclusion
For the first time, we can see that B2B marketing is a distinct, sizeable and identifiable community, and one that it is both vibrant and buoyant. However, it faces its own set of challenges for the future, many of which relate to education and ensuring its practitioners are equipped for all possible eventualities.
