B2B marketing sector worth £10 billion yet still undervalued, says Cicero report.
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, âThis 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 Â£10 billion a year.
âIt 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.â?
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, âThe 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.
âBut 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.â?
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?
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.
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.
Â· Estimated expenditure on B2B marketing communications during 2005: Â£9.8 billion
Â· Estimated number of practitioners with marketing in their job title focusing purely on the B2B sector: 176,000
Â· 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 âpoor relationâ tag must finally be recognised as unwarranted, and should be discarded.
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 âveryâ or âfairlyâ 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%. âAwareness raisingâ 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.
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.