Surveys can be interesting critters. They either reinforce or disprove one's beliefs, which in turn leads to great clarity or confusion about how to proceed. The devil is in the detail when it comes to conducting a survey and interpreting the results. First of all, ask yourself - Is this information meaningful and reliable? Then ask - How does this information impact my goals and how I might achieve that goal? I bring this up because I have recently read two separate surveys with interesting results. The first survey was BtoB Magazine’s 2010 Outlook: Marketing Priorities and Plans Survey, the other was from Microwave Journal readers.
BtoB Magazine’s survey revealed that over half of the respondents had marketing budgets that would be cut for 2010 (58%). Most of the remaining budgets would be flat. Most companies were decreasing their marketing budgets by roughly 12%, except for the group of respondents (10 to 14%) who were looking at a 30% budget reduction. Ouch. That’s a pretty deep cut for any company attempting to recover ground lost during the recession. Killing marketing efforts by that amount could be the start of a company’s death spiral if it translates into a significant reduction in lead generation and brand awareness in competitive markets.
Ok, let’s interpret. Companies are still squeezing budgets to make ends meet, but just over half of them are willing to take it out of their marketing. Of those, the majority will keep the cuts modest and a small group will cut deep. Unfortunately, the survey doesn’t compare this cut-back to that of other operations such as R&D or manufacturing. If it had, we would know more about how companies value the role of marketing in helping their bottom line, compared to their ability to create and build new products. Most believers in the ultimate wisdom of a free market feel strongly that lean times are necessary for eliminating inefficiencies. With smaller budgets, marketing groups will have to do just that.
Marketing is often among the first departments to take a hit when money is tight. Budget cut-backs will impact individual marketing programs/goals differently depending on a variety of factors. For example, a temporary reduction in a branding campaign may be relatively harmless, but that would depend on the aggressiveness of one’s competitors in their branding efforts and how an industry interprets a void in activity; more about this when we look at the MWJ survey.
If marketing budgets and lead generation are directly related, reducing marketing would likely result in fewer quality leads and ultimately fewer sales. The effort to save money would actually harm the company more by reducing potential revenue. Cuts from lead generating programs only make sense if marketing departments are able to generate better quality leads for less. To do so, marketing departments must know the quality of their leads.
61% of the respondents stated that their primary marketing goals were customer acquisition, 16% were focused on customer retention, 15% were focused on brand awareness and 9% on other miscellaneous tasks. I interpret this to mean that the majority of companies are focused on programs that can be linked directly to revenue generation. This is an understandable move in uncertain times. In good economic times as well as bad, companies need to constantly be searching for ways to expand their revenue while reducing their costs. Marketing departments with reduced budgets should look at the effectiveness of their lead generation efforts from the perspective of cost per lead and success rate of converting that lead into a sale. Producing fewer leads that are attributable to actual sales is clearly much more valuable than simply obtaining more leads. To track this, marketing departments need to communicate with the folks who close the loop, that is - sales. A sales group is, in turn, well-served to let marketing know what leads and source of leads is producing the highest rate of sales.
Back to the first survey: Events and print were the areas that would be taking the biggest budget hits (63% of respondents were cutting back in both of these areas), while 80% of respondents were going to increase their online spending. These results, combined with the responses mentioned above regarding primary marketing goals (61% new customer acquisition, 16% customer retention) may offer insight into how marketers (and their management) value traceability and low cost over potential effectiveness. Here’s where the survey offers clarity and confusion at the same time.
While attending a trade show is expensive, it does save considerable money over individual sales calls across a wide-spread geography. And what salesperson doesn’t think a face-to-face meeting isn’t the most effective way to win business? So why cut back dramatically on events? I suggest the cost of the event is not being considered in the proper context. Events save money over multiple sales calls. Of course, if everyone cuts back on travel, the effectiveness of the event does decline and companies are justified in cutting back.
This reminds me of a line from a friend of mine who works for a large financial institution. He describes the economy as a plane that can only fly if everyone believes it can fly. As soon as someone doubts this, the plane starts to decline, which leads others to questioning whether the plane can fly and a further drop in altitude. Events need that same kind of believe system to work.
Concerning print, I find it interesting as an editor how many companies insist that their contributed article appear in print rather than online, yet they would consider reducing or eliminating their advertising presence in print. They understand that print clearly has an impact and shelf-life that an article online can’t replicate. I believe this is even truer for an ad, with eye catching graphics/fonts and compelling copy. What is the last pop-up ad you remember? For the business of information technology, the internet is where our audience goes to find the content needed to do their job. In turn, we are able to track who was reading what and supply that information back to advertisers. For tractable results and a large audience, few mediums can touch this.
And yet print reaches a special audience - those who, by their position in a specific industry have qualified to receive a monthly offering and therefore may be more valuable to an advertiser. And what is of more value in a specialized field, the larger audience or the more targeted one? From conversations I have had with savvy marketers, the smart money is on the latter. Quality magazines are held onto and shared. Even though articles from the web are shared thanks to Twitter, Facebook and other social media, the sharing of print magazines allows ads to travel beyond their initial audience.
Consider the following – the market did not ask Apple to create the iPod. Apple created the iPod and asked the market to buy it. In this case, a company drove market demand. Now consider how the internet is used. We use search engines to find more information on subjects we already have some awareness of in the first place. This is how we specify search parameters. In contrast, print is an active medium that exposes readers to concepts and information they were not actively pursuing. Because the reader is qualified by specific criteria, this “unsought” information is or will likely become relevant. This is a case of marketers having an impact on potential customers, providing knowledge that previously did not exist, in a sense driving the market.
Of course e-newsletters play a similar role, but the experience is different and so is the impact. In a world flooded with new developments, products and supporting information, print medium supports the lag time necessary for new information to sink in and become relevant with evolving circumstances. If something is new, the onus is on the developer to actively educate potential buyers. Print does this like no other medium. In the case of a product or company that has been around for awhile, print advertising maintains brand awareness among qualified magazine readers. So why cut back on print advertising?
Couple these thoughts with the second survey, this one among Microwave Journal readers. Two separate questions tell one very compelling story. One question asked about name recognition among component vendors and the other one asked about which vendors’ components were used. Together, these questions showed a one for one relationship between company recognition and buying from that company. What is really interesting (and was not divulged in the survey) is that there was also a one-for-one relationship between company recognition and level of print advertising. It does work. Write down the name of five companies in the microwave industry and look at the advertiser’s index of your latest copy of Microwave Journal. I’d be surprised not to find a lot of overlap.
Well, these are very pro-print arguments, but marketers are well advised to tweak their programs based on a blend of print, online and live events. Figuring out the right blend is your challenge, especially as management asks you to do more with less. Getting noticed by the right audience is critical and in a time of declining marketing budgets so is efficiency and tracking. The challenge will be to manage all three simultaneously.