At the start of each year, we ask marketers about their planned budget and activities for the near year. We’ve begun crunching the numbers, and will reveal our findings in our upcoming webinar, Engineering Marketers 2018 Campaign Plans on February 21st, 2018 at 2 pm EST. Today though, we’re going to share some powerful results on budget trends for industrial marketers.
Simply put, 2018 is a breakthrough year for industrial marketing budgets. Budgets are soaring upwards, so read on to see how your budget compares. If your executive hasn’t allocated enough budget to your team, these survey results should give you the ammunition you need to argue your case.
The preliminary results of the survey are surprising. Only 4% of respondents are reporting that their budget for 2018 will be smaller than their budget for 2017.
Source: Engineering.com Marketers 2018 Budget Survey
The other way to look at this data is that 45% of marketers reported having larger budgets. That’s an impressive number. It speaks to the continuing trend of marketing taking responsibility for an ever-increasing share of the sales process.
In fact, it points to a breakthrough year for all marketers who seek to reach a technical audience.
In this post we’ll look at how:
- 2018 Will See the Biggest Budget Increases Ever
- Manufacturing Budgets are Set to Explode While Software Rises are More Modest
- Fast Growing Companies are Doubling Down on Marketing in 2018
If you need some facts and stats to back up your argument for more marketing budget, this blog post is for you.
2018 to See Biggest Budget Increases Ever
A few weeks ago I made a number of predictions about engineering marketing in 2018. My guess was that budgets were going to be higher, but I never expected the biggest increase we’ve ever seen.
First, the history. In the 5 years that we have run this survey, 2018 is the lowest year on record for shrinking budgets and conversely, the largest for increasing budgets. Here is a summary of the percentage of respondents who reported growing budgets over the last 5 years.
- 2014 – 44%
- 2015 – 19%
- 2016 – 38%
- 2017 – 39%
- 2018 – 45%
The proportion of growing budgets is only part of the story, however. The other part of the story is how much the budgets are growing. We asked these technology marketers how much their budget was growing or shrinking compared to the prior year.
Source: Engineering.com Marketers 2018 Budget Survey
The marketers who reported a larger budget were split roughly in half in terms of seeing budget increases of more than 10% versus less than 10%. That means that one in every five marketers reported that their budgets were going up by more than 10% in 2018 compared to last year, which is a very healthy increase indeed.
So where are marketers spending their additional budget? Marketers indicated a range of activities from content marketing, to lead generation, and tradeshows. In the webinar we’ll budget allocation to marketing success, so be sure to tune in to learn where marketers are winning. We’ll also compare where marketers are spending to what engineers say they actually want, something we went into great deal on in our Research Report: How Engineers Find Information.
Manufacturing Budgets Set to Explode While Software Rises are More Modest
Let’s break down the budget increases by industry. Our survey allowed marketers to select from 10 different industry choices, from manufacturing to software, from engineering services to 3D printing, and more.
Overall, the survey reached just over 100 respondents, which meant that we didn’t get enough responses to be able to report in every industry. Those industries with large enough sample sizes to measure are shown in the chart below.
Source: Engineering.com Marketers 2018 Budget Survey
Why are software budgets growing more slowly? In my opinion, 33% of companies reporting rising budgets is still an impressive figure. To help put that in context, none of the software companies surveyed reported shrinking budgets.
Software companies were among the first as an industry to invest more in marketing as a way to increase revenue. As a digital publisher, we at engineering.com saw this first hand. Software companies were among our first customers and remain one of our most valued client segments. Many of these companies already count their marketing teams in the hundreds of people and have had marketing automation systems for several years. As a result of the relative maturity of their marketing organizations, their growth will likely be more conservative compared to organizations just now embracing newer marketing tactics such as automation, content marketing, and social PPC.
The same cannot be said of most manufacturers. A couple of years ago I wrote a post called Manufacturers are Laggards in Digital Marketing – Why that’s Good News that explained three ways that manufacturers were behind others in digital marketing:
- Manufacturers web sites were out of date
- Manufacturers were slow to get in on the trend towards content marketing
- Most manufacturer web sites had no clear way to engage visitors
Now in 2018, all of these things are changing, and they are changing fast. Manufacturers have discovered the benefits of addressing these shortfalls, leading to more than half of them reporting larger budgets than last year.
And what about engineering services? This has historically been an industry that has relied heavily on personal sales. The company leaders have made careers out of being close to their prospects. For example, many companies maintain tight relationships with local municipal planning departments to ensure that they know about planned infrastructure projects long before they go to tender.
Image Courtesy of commons.wikimedia.org
There has been a big change in the structure of this industry. Over the last 10-15 years these companies have grown rapidly both organically and through acquisition such that there are now many that have more than 10,000 employees. As a result, their reach has grown geographically to a point where a broad marketing campaigns make sense.
This shift in the industry is coinciding with changes in marketing. Now large consulting engineering firms can count on their prospects around the world to start their projects by conducting Internet searches to find out who has built a skyscraper or a bridge like the one that they have in mind. These searches can be the starting point for who gets included in an RFP. Consulting engineering firms are taking note.
Fast Growing Companies are Doubling Down on Marketing in 2018
This last analysis may be the most telling. The companies that are growing fastest are also the ones who are most likely to report having larger marketing budgets in 2018.
To get this data, we asked survey respondents how their company’s revenue growth compared to others in their industry. Were they:
- Growing revenue slower than the competition?
- Growing revenue at roughly the same rate as the competition?
- Growing revenue faster than the competition?
We then grouped the respondents into these three categories and analyzed their marketing budgets compared to last year.
Source: Engineering.com Marketers 2018 Budget Survey
I consider this to be an important finding because it shows how the highest performing companies are behaving when it comes to their marketing budgets. And in this case, it shows that the high performers, those growing their revenues faster than the competition, are more likely than others to be growing their marketing budgets. This is shown by the gray bars gaining in size as you move from the left side of the chart to the right. Conversely, the slower growth group of companies are less likely to report growing budgets.
Of course, you could ask the cause-effect question, as in, “Are the high-performance companies growing faster because they spend more on marketing, or is their budget growing because they have more money as a result of faster sales growth?” Of course, the answer is likely to be a combination of the above.
If you need more ammo to go to management for more budget, tune into our webinar where we’ll present the full results of this survey, or if you can’t wait, shoot me an email with your questions to jhayes@engineering.com.
Thanks for reading. If you found this helpful, please share it with your colleagues.
Best,
John
