2015 TRENDS IN INDUSTRIAL MARKETING:
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- Vernon Fletcher
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1 INDUSTRIAL MARKETING: How Manufacturers are Marketing Today
2 2 Contents IHS Engineering360 Industrial Marketing Trends Survey... 3 Highlights from the Survey Results... 4 Conclusions... 5 Recommendations... 6 Marketing Goals and Challenges Marketing Channels and Programs Marketing Budgets Marketing as a Profession About IHS ( About IHS Engineering360 Media Solutions...27
3 IHS Engineering360 Media Solutions Industrial Marketing Trends Survey 3 IHS Engineering360 Media Solutions recently conducted its annual Trends in Industrial Marketing survey of marketing and sales professionals in the industrial sector. The online survey addressed the marketing trends, challenges and expenditures within the engineering, technical, manufacturing and industrial communities. This research report analyzes and presents the results of the survey, and offers recommendations to industrial marketers to help them allocate their budgets, develop a sound marketing strategy and plan effective programs and campaigns.
4 Highlights from the Survey Results 4 Of the 570 survey respondents, 51 percent hold management positions in marketing or sales, with an additional 13 percent indicating they are a President/ CEO. Seventy-nine percent work for a manufacturer, service provider or distributor. This group represents a variety of company sizes, and a range of annual marketing budgets. HIGHLIGHTS OF THE SURVEY RESPONSES INCLUDE: Customer acquisition is the primary marketing goal for 43 percent of respondents, earning it the top spot six years running. Focus on customer retention has grown every year for the past several years, with 15 percent stating it is their primary marketing goal in Increased competition is now the number-one marketing challenge. Lack of resources remains a challenge year after year, and a focus on high quality leads has jumped from 19 percent in 2014 to 35 percent in The top marketing challenge from 2014 incorporating social media into the marketing mix has fallen from 40 percent to 13 percent in one year. This likely illustrates that social media has become business as usual in the industrial sector. The emphasis of marketing teams over the next five years will be focusing on the customer, increasing brand awareness, and creating and distributing content. The top measurements for marketing success are sales attributed to marketing campaigns and customer acquisition. New to the top three for 2015 is customer satisfaction, which moves above leads into the top-three spot. Fifty-three percent of industrial marketers use both push/outbound and pull/ inbound marketing initiatives but only a quarter of survey respondents are happy with their marketing mix. The top three channels for industrial marketers in 2015 are marketing using in-house lists, trade shows and social media. Thirty-nine percent of respondents stated that they are just getting started with content marketing. Only 12 percent can show how content marketing contributes to sales, yet 51 percent have increased spending on content marketing. The average budget for industrial marketers with budgets under one million dollars is $162,000, a slight decrease from 2014 ($166,000). Eighty-two percent of companies are spending more or the same on marketing this year, reflecting a budget situation that has stayed level over the past five years. Forty-two percent of companies are increasing their budget for online marketing while just eight percent are cutting their spending in this area. Half of respondents indicate that their online portion of budget is unchanged, potentially indicating a greater acceptance of online spend as part of the marketing mix. Nearly half of marketers indicate that they will spend 36 percent or more of their marketing budget online, with the average being 41 percent. Industrial marketers are spending more this year on content creation, direct mail using in-house lists, search engine marketing and social media. LinkedIn (73 percent) remains the most-used social media channel. Branding (68 percent) and content delivery (67 percent) are the most popular uses of social media.
5 Conclusions Focus is on the customer. Customer acquisition, retention and satisfaction are priorities for industrial marketers. Year over year, customer acquisition is listed as the top marketing goal, with 43 percent reporting it is their primary marketing goal in Customer retention has grown every year for the past five years as a marketing goal. Additionally, customer acquisition and customer retention are among the top three measures of marketing success. Industrial companies fully understand the importance of their customers and are steering their marketing organizations to reflect that importance. Increased competition is a concern. The impact of increased competition has risen to the number-one marketing challenge in With the rise of digital media and channels, engineers and other technical professionals have more discovery resources at their disposal than ever before and are exposed to more suppliers and a more level playing field in their search for products, services and information. It is becoming increasingly challenging for industrial marketers to differentiate their companies from others. Content marketing is valued but not mature. Fifty-one percent of industrial marketers have increased spending on content creation in However, 39 percent are just getting started with content marketing and only 12 percent can show how content marketing contributes to sales. These results indicate that content marketing must mature in the industrial sector to reach maximum effectiveness. Social media has become business as usual. Industrial marketers have gotten the hang of social media. Only 13 percent of industrial marketers reported that incorporating social media into their marketing mix was one of their top three marketing challenges. Exactly half of industrial marketers are using social media as a channel in LinkedIn and Facebook are the two most popular channels. Branding and content delivery are the two most common uses of social media. Digital is a critical component of media spend. Digital channels continue to represent a significant and important portion of the industrial marketer s media budget. Forty-two percent are increasing their budget for online marketing, while just eight percent are decreasing. On average, industrial marketers spend 41 percent of their budget online, and digital represents four of the top five marketing channels in 2015, including marketing using in-house lists, social media, online directories/websites and search engine optimization. Digital also represents three of the four channels where spending is increasing. 5
6 Recommendations 6 Carefully evaluate your online marketing mix and investments. Online marketing spend represents a significant portion of overall marketing budgets (average of 41 percent), yet only 25 percent of industrial marketers are satisfied with their company s online marketing efforts and 53 percent say they could diversify their push/ pull channels more. These results indicate that many marketers have not fully optimized their digital mix. Putting too much emphasis on one area, such as the company website, can leave you vulnerable to competitors who are increasing visibility and generating engagement opportunities by investing across a variety of digital channels. Past research demonstrates the performance benefits of diversifying your marketing spend across multiple digital media channels rather than relying on a single platform. Consider shifting a portion of your budget to other online channels such as online directories/websites, e-newsletters, webinars and display advertising on industry websites. Get more from your content marketing efforts. Industrial marketers are committed to content marketing, with the majority (51 percent) increasing their spending on content creation in But with only 12 percent of marketers able to show how content marketing contributes to sales, the increased spending may not produce the desired results unless marketers can do a better job of distributing and tracking content. Marketers should develop a content marketing strategy based on achieving specific, measurable objectives. A key component of the strategy is producing content for all stages of the industrial buy cycle and tracking where and how customers access the content. Marketers should also develop a content-publishing calendar and seek to gain efficiencies by re-purposing content for use in different formats across different channels. Don t go it alone. With the rise of digital resources, a growing number of marketing channels to choose from, increased competition and greater pressure to show results for marketing dollars invested, industrial marketers are facing more challenges than ever. But you shouldn t have to work through these challenges alone. Media partners who can help you optimize your mix and get the most out of your budget are your allies, not only during planning and budgeting, but while you are in the midst of executing and measuring campaign results.
7 Marketing Goals and Challenges In 2015, 43 percent of industrial marketers chose customer acquisition as their primary marketing goal, making it the top priority for the sixth straight year. Customer retention (15 percent) has steadily grown over the past three years as a primary marketing goal. 7 What is your primary marketing goal in 2015? 4% Customer acquisition 15% 17% 21% 43% Lead/demand generation Brand awareness Customer retention Other
8 The top three challenges industrial marketers face are increased competition, lack of marketing resources, and generating high quality leads. 8 Please choose your top 3 marketing challenges. Increased competition is making my marketing job harder than ever 40% There are too few resources (dollars, people and time) available for marketing I'm not generating enough high quality leads for sales Uncertainty in the market place 36% 35% 34% I need to drive more customers to my company's website I need to improve my marketing ROI Identifying and understanding the right personas I know I should be doing more online but I'm not sure what is really working best Not enough customers are finding our company, products or services when searching on the Internet I'm not sure how to incorporate social media into my marketing mix It is getting harder to get our delivered and read by prospects and customers I'm wasting marketing dollars because I'm not able to focus dollars on the people who purchase our products/services Marketing media that worked in the past isn't working as well today Other 25% 23% 20% 18% 17% 13% 13% 10% 10% 7% 0% 10% 20% 30% 40%
9 Respondents indicated that their top measures of success for marketing initiatives are sales attributed to marketing campaigns (57 percent), customer acquisition (54 percent) and customer satisfaction (43 percent). Leads as a measure of success declined from 47 percent in 2014 to 39 percent in The percentage of companies that don t have a method to measure marketing success held steady at 12 percent. 9 How do you measure the success of your marketing initiatives? Sales attributed to marketing campaigns 57% Customer acquisition Customer satisfaction Leads Customer retention RFQs Revenue per customer Sales generated from up-selling and cross-selling Audience reach Content downloads Number of touch points We don't have a method to measure success Other 18% 16% 12% 12% 3% 29% 28% 25% 43% 39% 37% 54% 0% 10% 20% 30% 40% 50% 60%
10 Marketing Channels and Programs 10 marketing using in-house lists, tradeshows, social media, online directories/websites and search engine optimization are the top channels that industrial marketers are utilizing this year. Podcasts, direct mail using rented/purchased lists and telemarketing are at the bottom of the list. Four of the top five channels used are digital, indicating that many industrial marketers understand the importance of devoting resources to a mix of online media. Which of the following marketing channels are you using in 2015? marketing using in-house lists 60% Tradeshows 59% Social media (eg. Twitter, LinkedIn, Facebook) 50% Online directories/websites 49% Search engine optimization (SEO) 49% Content marketing 46% Trade magazine advertising 35% Direct mail using in-house lists 34% Internet banner advertising on individual site 33% Public relations 32% Blogs 28% Search engines (paid traffic) 28% Video 28% Webinars 24% Online newsletter sponsorships/ads 23% Printed directories 23% marketing using rented/purchased lists 20% Internet banner advertising networks 20% Mobile marketing 16% Telemarketing 15% Online events 12% Direct mail using rented/purchased lists 10% Podcasts 3% Other 2% 0% 10% 20% 30% 40% 50% 60%
11 More than half of industrial companies (53 percent) use a balanced approach, mixing both inbound/pull marketing (such as corporate website, online catalogs and search engine marketing) and outbound/push marketing (such as e-newsletters and ). However, industrial marketers stated they want to diversify their mix more. 11 How would you describe your mix of push/outbound and pull/inbound marketing initiatives? 9% 12% 26% 53% We use both push/outbound and pull/inbound marketing but could be diversifying more. I am happy with our mix of push/outbound and pull/inbound marketing. We only use pull/inbound channels. We only use push/outbound channels.
12 Forty-five percent of industrial marketers feel neutral about their company s online marketing efforts, with 25 percent satisfied or very satisfied. Thirty percent of respondents indicated a level of dissatisfaction with their online marketing % 45% 40% How satisfied are you with your company s online marketing efforts? 45% 35% 30% 25% 20% 15% 25% 21% 10% 5% 5% 4% 0% Very dissatisfied Dissatisfied Neutral (neither satisfied nor dissatisfied) Satisfied Very satisfied
13 Content marketing has become a crucial marketing tactic for industrial marketers, but it is still new for many. Thirty-nine percent are just getting started with content marketing and only 12 percent can show how content marketing contributes to sales. Twenty-nine percent gain the efficiency of re-purposing content so it can be used in other formats. Marketers need to accelerate the maturation of their content marketing efforts. 13 How would you describe your content marketing efforts? 40% 35% 39% 30% 25% 20% 15% 10% 5% 29% 27% 20% 19% 15% 12% 0% We're just getting started with content marketing. We repurpose our content so it can be used in different formats. We have a content marketing strategy in place. We don't include content marketing in our plans. We use an editorial calendar to help plan our content. We align our content to the different phases of the buy cycle. We can show how content marketing contributes to sales.
14 Social media has become business as usual in the industrial sector. LinkedIn continues to be the most popular social media platform among industrial companies, with 73 percent using this platform. Facebook, Twitter, Google+ and company blogs round out the top five social media applications in the industrial sector. 14 Which of the following social media applications is your company currently using/participating in? YouTube/video sharing websites Do not use social media LinkedIn 73% Facebook Twitter Google+ Company blog Community site SlideShare Other 15% 13% 9% 3% 30% 36% 47% 46% 58% 0% 10% 20% 30% 40% 50% 60% 70% 80%
15 Branding (68 percent) and content delivery (67 percent) are the two primary ways industrial marketers use social media. Only 26 percent use social media to generate leads. This is to be expected as industrial marketers discover the best uses of social media as a marketing tactic. Thirty-four percent use social media for listening/ monitoring company feedback and for market research. 15 How do you use social media? 70% 60% 68% 67% 50% 40% 30% 20% 34% 34% 29% 28% 26% 10% 0% Branding Content delivery Listening/ monitoring company feedback Market research Customer care Thought leadership Generate leads 3% Other
16 Overall, 26 percent of marketers are satisfied with their company s social media efforts, about the same percentage that is dissatisfied (28 percent). Forty-six percent are neutral. As marketers become more familiar with what works on social media and as they develop and achieve measurable goals, satisfaction should increase. 16 How satisfied are you with your company s social media efforts? 50% 40% 46% 30% 20% 10% 5% 23% 22% 4% 0% Very dissatisfied Dissatisfied Neutral (neither satisfied nor dissatisfied) Satisfied Very satisfied
17 More companies (24 percent) have a full-time person dedicated solely to social media than at any time in the past. 17 Do you have a full-time employee dedicated solely to social media? No, but looking to hire one No 78% 73% Yes 6% 19% 24% 1% 3% 3% 93% 0% 20% 40% 60% 80% 100%
18 Marketing Budgets Forty-two percent of companies have marketing budgets under $50,000 and 12 percent of companies have marketing budgets greater than $1 million. For those companies with marketing budgets of $1 million or less, the average marketing budget is $162, What is your marketing budget for 2015? 50% 40% 30% 42% 20% 10% 0% Under $50,000 16% 12% 8% 10% 12% $50,000 $99,000 $100,000 $249,000 $250,000 $499,000 $500,000 $1,000,000 Greater than $1,000,000
19 Over the past three years, growth rates in marketing budgets have remained relatively constant. Thirty-four percent are spending more in 2015 than they did in 2014; only 18 are spending less. About half are spending the same. 19 How does your 2015 marketing budget compare to 2014? 18% 34% 48% Spending about the same in 2015 as in 2014 Spending more in 2015 than in 2014 Spending less in 2015 than in 2014
20 The marketing channels where industrial marketers are increasing spending include content creation, direct mail using in-house lists, paid search engine traffic, social media and online directories/websites. Decreasing are direct mail using rented/purchased lists, public relations, blogs and tradeshows. 20 Compared to 2014, how has your spending on the following marketing channels changed in 2015? Blogs Content creation 2% 7% 24% 47% 51% 69% Direct mail using in-house lists Direct mail using rented/purchased lists marketing using in-house lists marketing using rented/purchased lists Internet banner advertising networks Internet banner advertising on individual site Mobile marketing Online directories/websites Online events Online newsletter sponsorships/ads Podcasts Printed directories Public relations Search engine optimization (SEO) Search engines (paid traffic) Social media Telemarketing Trade magazine advertising Tradeshows Video Webinars 3% 4% 5% 5% 7% 8% 10% 10% 9% 13% 13% 15% 15% 16% 16% 19% 19% 19% 18% 19% 18% 18% 22% 25% 26% 27% 26% 26% 30% 31% 31% 31% 34% 34% 34% 35% Decrease Stay Same Increase 0% 10% 20% 30% 40% 50% 60% 70% 41% 41% 40% 40% 43% 44% 47% 46% 49% 49% 51% 51% 51% 54% 53% 55% 54% 56% 55% 56% 59% 58% 62% 63% 63% 63% 65%
21 Forty-two percent of industrial companies are increasing online spending as a portion of their overall marketing budgets, with half of companies remaining the same. Online is a smaller portion for only eight percent of companies. These results indicate that industrial marketers know the importance of online marketing to connect with engineers and other technical professionals. 21 How does your 2015 online marketing budget compare to 2014? 8% Online proportion of budget is unchanged from last year 42% 50% Online is a greater portion than last year Online is a smaller portion than last year
22 Almost half of companies will spend more than 35 percent of their marketing budget online, and nearly a third of respondents indicated that they are spending more than half their marketing budget online. The average online spend is 41 percent of the total marketing budget. 22 What portion of your 2015 marketing budget will be spent online? 25% 20% 15% 10% 5% 15% 16% 21% 17% 9% 13% 9% 0% 0 10% 11 20% 21 35% 36 50% 51 65% 66 80% %
23 The outlook for 2016 industrial marketing budgets is positive. Forty-one percent will be increasing their budget in 2016, while only 11 percent are anticipating a decrease in their marketing budgets. 23 How do you anticipate your 2016 budget to change compared to 2015? 50% 40% 30% 48% 41% 20% 10% 0% 11% Decrease Remain the same Increase
24 Marketing as a Profession For the past several years, industrial marketers have reported that their biggest challenges are generating leads for sales (29 percent) and measuring the ROI of marketing efforts (27 percent). 24 Understanding how to incorporate social media into my marketing initiatives Getting budgets approved by the CEO/CFO As a marketer, what do you consider the biggest challenge in your profession? Generating leads for sales Measuring the ROI of my efforts Working together with sales Lead nurturing Justifying marketing's role to the CEO Other 6% 4% 11% 9% 7% 7% 29% 27% 0% 5% 10% 15% 20% 25% 30%
25 Over the next five years, marketing teams will continue to place strong emphasis on customers, brand awareness, and content creation and distribution. Digitally-focused initiatives will also be important. 25 Integration with other business functions (sales, customer support, IT) How will the emphasis of your company s marketing team fundamentally change over the next five years? Focus on the customer (engagement, retention, etc.) Emphasis on brand awareness Content creation and distribution Digitally-focused initiatives Focus on analytics Collaboration with IT Use of marketing automation (1=No emphasis, 7=Very strong emphasis)
26 There will be little change in headcounts in marketing departments in the industrial sector. Seventy-three percent of marketing departments are remaining stable, while 22 percent are increasing headcounts. Only five percent are decreasing headcounts. 26 How do you anticipate headcounts for your marketing department to change in 2015? 5% 22% 73% No change Increase Decrease
27 About IHS ( IHS (NYSE: IHS) is the leading source of insight, analytics and expertise in critical areas that shape today s business landscape. Businesses and governments in more than 150 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world. 27 About IHS Engineering360 Media Solutions IHS Engineering360 is the world s largest online destination for engineers, delivering the single source for trusted, expert engineering content, information, insight, tools and community for engineers and technical professionals across multiple industries and disciplines. An engaged community of more than 8 million industry professionals half the world s engineers rely on IHS Engineering360 as a trusted resource at every stage of the research, product design and purchasing process. For industrial marketers, our mission is to provide comprehensive digital media solutions that connect companies with their target audience and generate unparalleled results delivering measurable and actionable awareness, demand and engagement opportunities at all stages of the buy cycle.
28 2015 TRENDS IN INDUSTRIAL MARKETING For more information about IHS Engineering360: Visit: Call: Fax: Tech Valley Drive Suite 102 East Greenbush, NY 12061