New Study Finds Marketing Communications
Budgets Up for 2004; Important Links Between Marketing
Accountability, Perceptions and Budgets
Communications consultants Blackfriars Communications, Inc. recently
launched the Blackfriars Marketing Index (TM), a quarterly measure of
corporate marketing demand and spending. According to Joe Butt, a
principal of Blackfriars, "Our survey showed that annual marketing
budgets for businesses are up 8.9 percent over 2003. It also showed
that marketers plan to spend more than 27 percent of those bigger
budgets in the first quarter. Those two factors boosted the index to
119, meaning that marketing activity should be significantly higher
this quarter than last year."
The index has been set at 119 for the first quarter of 2004,
indicating that executives expect to spend 19 percent more on
marketing this quarter than they spent on average per quarter in 2003.
Relationship Between Accountable Marketing Communications and
Perhaps most importantly, the Blackfriars' study shows a strong
correlation between marketing measurement practices, the corporate
perception of marketing and the marketing budget.
Fifty-seven percent of the companies surveyed measured the results
of their marketing efforts. Firms that measured their results had
marketing budget increases that were nearly twice the percentage of
those that did not measure results. Companies that measured their
marketing results increased their annual marketing budgets an average
of 11.2% in 2004, while those companies that did not measure marketing
results increased their budgets by 6%.
Further, executives at firms that measured results were less likely
to be dissatisfied with the effectiveness of their marketing.
Twenty-three percent of executives at companies that do not measure
marketing performance were dissatisfied with marketing efforts,
compared to 9% of executives at companies that do measure performance.
Breakdown of the Marketing Communications Budget
The study found that the marketing budget was split up as
- Advertising: 31%
- Website development: 17%
- Events: 15%
- Public relations and analyst relations: 10%
- Collateral: 6%
- Concept testing:6%
Marketing Viewed as Important, But Tactical
The report also examined the perception of marketing by executives.
While 82% percent of respondents agreed or strongly agreed
that marketing is important to their company and 73% agreed or
strongly agreed that marketing is the "public face" of corporate
strategy, only 37% of companies said they have a VP of marketing or a
chief marketing officer. This is likely due to the perception that the
marketing department carries out strategy, rather than develops
strategy. This tactical perception of marketing was confirmed with 71%
of the executives who responded either agreeing or strongly agreeing
that marketing's primary function is to generate leads.
Personal Viewpoint: Peter DeLegge
Marketers would do well to heed the message of this study. That is,
marketers must measure and illustrate the effectiveness of their
initiatives in order to protect their budget and be perceived as
strategic by the executive team. In short, marketing must prove its
The credibility gained through greater accountability and increased
consistency with corporate strategy is likely to help move marketing
up the strategic food chain of an organization. If the marketing
department can prove it adds significant value in terms that the CFO
and CEO (and consequently, the executive team) respect -- that is, in
terms related to the business strategy, and specifically, in financial
terms or, at least, as measured through client acquisition, client
retention, cross-selling, etc. -- it is likely to significantly
increase its odds of gaining a place at the executive table or if it
is already at the table, increase its influence.
A number of organizations have made progress through greater
collaboration between the marketing and finance departments. In many
cases, it can make sense for these two departments to work together to
establish metric standards and processes.
Especially in a difficult economy, greater accountability and
processes for marketing expenditures not only result in more effective
marketing programs, it increases both the budget’s and the staff’s
odds of survival.
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About the Study and Index:
Blackfriars created the index from its analysis of a survey of 100
senior business executives with titles including CEO, president,
senior VP and director. The survey was conducted between January 8 and
January 15, 2004. It is broadly representative of U.S. businesses
based on U.S. Census data. The index was determined by comparing the
change in annual budgets from 2003 to 2004, and multiplying that
number by the proportion of the budget to be spent in the first
quarter of 2004. Businesses ranged in size from small to large
enterprises, with average revenue of $280 million a year. A 12-page report detailing the findings of this study is available
for $695 from
Customers who enter into a consulting or direct enterprise
relationship with Blackfriars will receive this report as a part of
their contract. Blackfriars will publish the Blackfriars Marketing
Index on a quarterly basis to provide an ongoing measurement of
corporate marketing demand and spending, and to help organizations
benchmark their marketing efforts with those of other companies.
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