The latest Annual Tech Marketing Benchmark Study from the International Data Corporation (IDC) CMO Advisory Service finds that marketing budgets among the 101 technology companies surveyed will increase by an average of 3.5% in 2014.
Those same companies expect a revenue increase of 3.7% for the same period. Despite this momentum, the CMO role remains very fluid as marketing organizations attempt to reinvent their capabilities and effectiveness in a new era of marketing. In a related study, IDC finds that 51% of tech CMO’s have been in their position for fewer than two years.
Two-thirds of the companies surveyed by IDC will increase their marketing budgets in 2014 while only 20% of the companies will decrease their marketing budgets with the remainder indicating no change in budget levels. Notably, companies with a high percentage of 3rd Platform products (cloud, social, mobile and Big Data and analytics) will receive marketing budget increases upwards of five times that of the average tech company, increasing their budgets 10-20% year over year.
“For the first time in eight years, IDC is seeing that marketing budgets are increasing at about the same rate as revenues. This is positive news for tech marketers and also a clear indication that the C-suite is ready to put additional marketing investment up against more promising business prospects,” said Sam Melnick, Senior Research Analyst, IDC CMO Advisory Service.
“We examined 152 tech companies with a current CMO in place and found that 77, just over half, have replaced their CMO in the last 24 months – an astonishing rate of change. CMOs must own the digital disruption of buyer experience for their companies. Those CMOs able to rise to the challenge will be provided more resources and given more power. The unprepared will be replaced,” said Kathleen Schaub, Vice President, IDC CMO Advisory Service.
“However, tech CEOs must also wake up to the impact marketing now wields over revenue and reputation. It’s their job to pick the right person for today’s challenges. To get CMO selection right means the CEO needs to understand and get closer to marketing.”
The 12th annual 2014 Tech Marketing Benchmark Study was recently completed by IDC’s CMO Advisory Service and seeks to capture the full marketing spend and marketing headcount allocations of global companies within the technology sector. The research effort surveyed 101 companies, with the average company’s revenue surpassing $7 billion.