Soit 2019 logo

The annual report on IT budgets and tech trends

MARKETING SPEND, TRENDS, AND HURDLES FOR THE YEAR AHEAD

In part four of the 2019 State of IT ©, we uncovered how organizations are spending their marketing budgets this year, which trends they’re adopting, and what challenges they expect to face in the year ahead. After surveying more than 350 B2B marketers in technology companies across North America and Europe, we discovered budgets are on the rise as companies place a higher priority on marketing to acquire new customers and sustain positive momentum.

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Key findings:

  1. Nearly 80% of businesses expect their marketing budgets to grow or remain steady in 2019.

  2. The top drivers of marketing budget increases: higher priority on marketing and recent customer growth.

  3. Adoption of account-based marketing (ABM), video marketing, and on-demand content is on the rise in 2019.

  4. The biggest marketing challenges this year are measuring marketing ROI and driving conversions with content.

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B2B MARKETING SPEND BLUEPRINT

In 2019, nearly 80% of organizations expect their marketing budgets to either increase (37%) or remain the same (42%), with only 8% anticipating a decline.

37%

Increase

42%

Remain the same

8%

Decrease

From a regional perspective, businesses in North America are more likely to boost their marketing budgets than organizations in Europe (42% in North America vs. 27% in Europe). Perhaps some European organizations are holding back on budget increases due to political uncertainty in the region and the implications of Brexit.

Expected marketing budget change from 2018 to 2019
Stack of money

And when comparing company sizes, we discovered small companies with fewer than 100 employees are much more likely to scale up marketing spend: 45% expect an increase, compared to 35% of midsize companies with 100 to 999 employees and 28% of enterprises with more than 1,000 employees.

Regardless of company size or region, we found organizations typically allocate a hefty 13% of their gross annual revenue toward their marketing budget.

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FOUNDATION FOR MARKETING GROWTH

Companies who plan to expand their marketing budget in 2019 anticipate an average boost of 24%, with most marketers stating their organization’s increased prioritization on marketing (51%) is the top driver of budget growth.

TOP DRIVERS OF BUDGET GROWTH

51%

INCREASED PRIORITY
ON Marketing

48%

Customer
Expansion

45%

INCREASED Company
revenue

Marketers also ranked recent customer expansion (48%) and increased company revenue (45%) as top drivers. This suggests businesses leaders are recognizing the link between higher marketing spend and customer growth, which often leads to more revenue.

We’re living in an era when information is ubiquitous, and customers are moving further and further along the purchase path before ever engaging a brand. These changing behaviors are forcing businesses to recognize that we have to reach technology buyers at every phase of the purchase journey, wherever they are, and with the content and information they need to be successful. Fortunately, marketing teams, in partnership with sales, are equipped to do just that, and businesses are prioritizing accordingly.”

Aditi Karandikar

Senior Director of Demand Generation at StorageCraft

Other factors such as corporate tax cuts (3%) are less likely to impact marketing budget increases — though, according to our 2019 State of IT Budgets report, tax cuts were more likely to drive IT budget growth.

Top factors leading to marketing budget increases in 2019
Top factors leading to marketing budget increases in 2019

In terms of budget allocation, on average, 30% of marketing budgets are being put toward paid media efforts, 22% will fund tradeshows and other events, 21% will be used for marketing tech (martech), and another 19% will be spent on external agencies and contractors. The remaining 9% is reserved for “other” marketing activities.

Marketing budget allocation in 2019
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SIZING IT UP

When asked to compare their budgets year over year, marketers said their martech budgets are seeing the most substantial increases, with more than half of organizations (51%) expecting to spend more on martech in 2019 than in 2018. And another 44% of companies are increasing their budgets for paid media year over year.

51%

ORGANIZATIONS INCREASED SPEND ON MARTECH

Calendar & Charts

On the other hand, budgets for events/tradeshows and external agencies and contractors were less likely to get a year over year boost, and more likely to hold steady or decrease. In fact, more than 15% of organizations are downsizing their budgets in those areas — likely so they can reallocate those dollars to ramping up their paid media efforts and martech stack.

Changes in marketing budget allocation from 2018 to 2019

When we asked organizations to break down their paid media budgets, it came as no surprise that inbound digital strategies such as search marketing, social media marketing, and email dominated budget allocations. However, digital outbound activations such as display, video, native, mobile, and affiliate marketing together account for 23 percent of spend. And it’s evident that display media is a top priority among these outbound activations. On the other hand, fewer organizations are allocating money toward traditional marketing channels, such as print ads, direct mail, out of home, and radio.

Paid media budget breakdown

Diving further into martech budgets, we found organizations are earmarking the largest slices of their budget for content and experience tech (28%), social and relationships tech (20%), and advertising and promotional tech (16%).

Marketing technology budget breakdown

Finally, when we examined budgets for external agencies and contractors, we found the most sizable chunk was set aside for creative partners (30%) with advertising/digital partners (27%) trailing close behind and brand/PR partners (17%) coming in third.

External agency/contractor budget breakdown
SpotIllo Magnet

Looking into marketing priorities in 2019, most organizations are setting their sights on generating leads and acquiring new customers (73%). And fortunately for B2B marketers, many IT budgets will get a boost next year. So IT buyers may be more inclined to invest in new solutions than in the recent past.

Organizations also ranked increasing brand awareness (39%) and cross-selling or upselling existing customers (32%) among their top marketing priorities for the year. In other words, organizations want to keep the momentum going with marketing programs that’ll continue to drive customer and revenue growth in 2019.

73%

GENERATING LEADS
 

39%

BRAND AWARENESS
 

32%

UPSELLING EXISTING
CUSTOMERS

Primary marketing priorities in 2019
Primary marketing priorities in 2019

When it comes to allocating spend to support their priorities, organizations’ budgets align with their key marketing objectives. On average, 45% of 2019 marketing budgets are set to support lead generation, while 23% will fund brand awareness and 20% will be used to drive product awareness and education. Another 12% will support “other” marketing priorities.

Marketing budget supporting each priority
SpotIllo Cell

What channels will B2B marketers use to drive marketing priorities in 2019? To generate leads, the majority of organizations are focusing their efforts on email (66%), tradeshows and events (61%), paid search (57%), and paid social (47%). On the other hand, when it comes to generating brand awareness, marketers are primarily using organic social media (56%) and earned media/PR efforts (47%). And to meet their product education and awareness goals, companies are combining many of the above channels, including email (44%), organic social media (43%), tradeshows and events (39%), and paid social (36%).

Traditional marketing channels often used to reach consumers, such as out of home media (e.g., billboards), radio, and television are the least popular channels for B2B marketers in 2019. More than 80% of B2B marketers in our survey reported they have no plans to use these channels in the next 12 months.

Top channels used to drive marketing priorities in 2019
Top channels used to drive marketing priorities in 2019
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CONTENT CONSTRUCTION

What types of content will organizations produce to drive their outcomes? To generate leads, 50% of organizations expect to produce webinars, 48% plan to craft whitepapers, and 45% plan to develop case studies. For brand awareness, companies plan to create online articles and blogs (54%), online videos (50%), and infographics (40%). And when it comes to product education and awareness, they plan to use a combination of content, such as online articles and blogs (62%), videos (52%), case studies (51%), and infographics (51%).

Top content produced to drive marketing priorities in 2019
Top content produced to drive marketing priorities in 2019

Given the answers above, it’s obvious most marketers we surveyed have a concrete plan in place to pave the way through 2019. So we had to ask: What prompts organizations to buy marketing programs on an annual basis versus ad hoc or quarterly? As it turns out, cost is the primary influencer in this decision-making process with 39% of marketers reporting annual budget availability and 36% reporting pricing discounts as top drivers to purchase year-long programs.

39%

Annual budget
availability

36%

Pricing
discounts

While North American businesses are more likely to buy annual marketing programs to ease the planning process or secure premium placements, these factors are less likely to impact European organizations. In fact, European businesses are less likely to buy annual programs in general: 27% of European companies don’t buy annual marketing programs at all, compared to 16% of businesses in North America.

Top drivers to buy marketing programs on an annual basis
Top drivers to buy marketing programs on an annual basis
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B2B MARKETING TRENDS & CHALLENGES

SpotIllo TV

In addition to marketing budget and priorities, we also delved into B2B marketing trends to find out what’s on the rise and what’s mostly hype in 2019 and beyond. We discovered that by the end of 2020, 71% of businesses expect to use video marketing, which can serve as a medium to share customer testimonials, livestream events, or deliver entertaining content. This could explain why organizations are allocating nearly a third of their agency budget to creative partners.

Additionally, 70% plan to use account-based marketing by 2020, and 61% anticipate deploying an on-demand content strategy, which enables customers and prospects to access content on their own terms while enabling marketers to extend the life of their webinars, livestreams, and more. Adoption of influencer marketing, purchase-intent targeting, and AI-powered data analytics will also see a big boost in adoption over the next two years. On the other hand, few organizations expect to create VR- or AR-based customer experiences in the near future.

Marketers are now realizing the benefits of using purchase-intent to target businesses actively shopping for their products and services. This approach is a win-win for sellers and buyers. As a marketer, you surface timely, relevant content to people who are ready to buy, resulting in leads with a higher likelihood to convert. As a shopper, you’re presented with the info you need, right when you need it, saving time and energy during the buying process.”

Jason Beltran

Director of Product Marketing at Spiceworks
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BIG ADOPTION

But not all businesses plan to embrace these emerging marketing trends at the same rate. In fact, in many cases, adoption rates in large enterprises are double the rates in smaller companies. For example, 58% of large enterprises are currently using programmatic ad buying, compared to 21% of small businesses.

Additionally, 47% of large enterprises are currently using purchase-intent targeting and 28% are using chatbots to engage customers before or after a sale, compared to 16% and 12% of small businesses, respectively. The variation in adoption likely stems from the difference in marketing resources between large and smaller companies. Larger organizations typically have more marketing staff and agency partners to experiment with these emerging trends.

It’s also worth noting a third of large businesses are creating generational campaigns, and 17% are creating VR- or AR-based customer experiences as part of their marketing strategy.

Adoption of B2B marketing trends

TOTAL, REGIONAL, AND BY COMPANY SIZE

Currently Use
Plan to use in 12 months
Plan to use in 1-2 years

Looking at the year ahead, the majority of B2B marketers expect account-based marketing (49%) to have the most significant impact on their business outcomes, followed by on-demand content strategy (33%) and influencer marketing (32%). However, opinions vary by company size.

49%

Account-based
marketing

33%

on-demand
content strategy

32%

influencer
marketing

Smaller businesses expect video marketing and social advertising on emerging channels (e.g., Snapchat, Instagram stories) to have a bigger impact while larger companies believe AI-powered data analytics are more likely to make a big impact. This makes sense considering larger organizations typically have more data to decipher and more complex marketing attribution models.

Marketing trends expected to have the biggest impact on businesses
Marketing trends expected to have the biggest impact on businesses
Roadblock thum

As they begin to roll out their 2019 strategies, B2B marketers also anticipate several challenges in the year ahead. At the top of the list, 48% of marketers expect to face roadblocks when it comes to measuring marketing ROI, which may explain why martech budgets are on the rise in 2019. Additionally, 45% say driving conversions with marketing content and 37% say aligning marketing and sales efforts will give them the most trouble. But this comes as no surprise given these challenges have plagued B2B marketers for years.

When we compare North American companies with their neighbors across the pond, we found European companies are nearly twice as concerned about complying with regulations, which is expected in the wake of the General Data Protection Regulation (GDPR).

Like trend adoption, marketing challenges also vary significantly by company size. Small companies are more likely to struggle driving conversions with marketing content while mid-sized organizations expect to face more difficulties aligning marketing and sales efforts. On the other hand, large enterprises are more likely to face obstacles convincing business leaders to prioritize marketing, evolving to a more sophisticated attribution model, and scaling ABM efforts — three things that could account for the slower growth in 2019 marketing budgets for larger businesses.

Top marketing challenges organizations expect to face in 2019
Top marketing challenges organizations expect to face in 2019

Aligning marketing and sales is an age-old challenge faced by companies of all sizes across the globe. But 2019 could be the year B2B marketers make significant headway breaking down their departmental silos and improving collaboration. In total, 55% of organizations intend to address this roadblock by aligning sales and marketing on the same goals, 52% said they’d coordinate marketing and sales-led activities, and another 52% said they’d meet regularly to optimize these activities.

But we also found tactics varied by company size. For example, larger companies are more likely to spend their energy helping onboard and train sales reps and creating marketing and sales squads for specific projects whereas smaller businesses may not have the resources for these tactics.

Successful marketing teams are those who demonstrate how investments directly tie to revenue growth. But this requires close alignment between sales and marketing on metrics, intra-team collaboration, and processes. When it's done well, marketing can predictably drive value and play a key role in a company's success.”

Karl Scholz

Director of Global Marketing at Synopsys Inc.
Common tactics used to align marketing and sales efforts
Common tactics used to align marketing and sales efforts
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Conclusion

When it comes to B2B marketing in the year ahead, budgets are growing and stable — thanks primarily to organizations ranking marketing as a higher priority in 2019. And with recent customer and revenue growth, marketers are prepared to keep the momentum going by spending the bulk of their funds on paid media, namely search marketing and paid social. It’s all part of an effort to meet their primary goal for the new year: generate leads and acquire new customers.

Regarding trends, marketers will continue their current focus on ABM, video marketing, and on-demand content, but many also plan to add influencer marketing and purchase-intent targeting to the mix. Measuring marketing ROI, driving conversions with marketing content, and aligning marketing and sales efforts will continue to challenge marketers in the new year. However, the majority of businesses are poised to unite sales and marketing teams by aligning their goals and coordinating their activities to blast through obstacles and meet their objectives in 2019.

2019 STATE OF IT BUDGETS

Check out part one of the State of IT to get more insights on IT budgets and tech trends in 2019!

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Details on the data

The Spiceworks survey was conducted in October 2018 and included 352 B2B marketers in technology organizations across North America and Europe.

Regions represented
Company sizes represented
Top Marketing Titles Represented
Top Marketing Titles Represented