Technology-related businesses are recovering from the economic slowdown that hammered sales during the recession. IDC analysts say that many companies will be marketing new high-tech products and services to consumers and businesses this year. However, tech marketers as showing signs of lower advertising spending and in most cases, are shifting significant resources to digital outlets.
According to IDC analysts, last year’s 5.8% revenue growth in the tech sector was supported by a 3.7% increase in marketing budgets. Analysts point out that spending more on marketing this year, which is expected to be competitive as consumers and clients resume normal buying patterns, will help aggressive businesses achieve satisfactory sales results.
But the nature of marketing in the tech sector is swiftly changing. During the recession, spending on traditional advertising channels dropped over 40% and event spending fell as well. To some extent, this drop in spending was offset by rapidly increasing spending in digital marketing which approaches 20% of many tech company marketing budgets.
The entire nature of marketing has changed as well. Analysts say that previous initial product launches and rebranding efforts were accompanied by a 4–6 month burst of spending on advertising and public relations activities. In the newer digital world, major product launches have been occurring in a time frame of several weeks. Managers constantly monitor and dynamically change their approaches through the campaign, often based on feedback from clients and consumers.
The latest survey from IDC shows that tech companies will spend over 50% of their media budgets on digital formats in 2011. Digital spending will break out as follows:
- Branded media 41%
- Search 24%
- Ad networks 21%
As tech marketers stay on the leading edge of changes in digital marketing strategies, they’re also paying attention to ROI. Industry watchers predict that 2011 may be the year that analytics provide valuable feedback to marketers who use digital formats.[Sources: IDC Overview. IDC Executive Advisory Group. Web. 2011. Web. 1 Mar. 2011. Smith, Steve. Tech B2B Buyers: All-In For Digital. Minonline.com. 20 Dec. 2010. Web. 1 Mar. 2011]