ITSMA Budget Study 2011 Abbreviated Summary

Services Marketing Budgets and Benchmarks:
2011 Budget Allocations and Trends
January 2011
Abbreviated Summary

Prepared by:
Julie Schwartz
Senior Vice President
Research and Thought Leadership
ITSMA

B022SS

Table of Contents

Slide
Key Trends 3
Survey Methodology and Demographics 4
Survey Highlights 9
Appendix: Table of Contents for Services Marketing Budgets and
23
Benchmarks: 2011 Budget Allocations and Trends, January 2011
Appendix: Definitions Used in This Report 24

ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 2

Key Trends

 ITSMA members are projecting  Marketers are investing in
double-digit services revenue online and social media
growth marketing, which are critical to
 Services marketing budgets, improving relevancy
after reaching an all time low as  Despite client desire for greater
a percentage of revenue, are intimacy, marketers are
returning to historical levels: spending less aggressively on
between 1% and 2% of revenue programs at the later stages of
 Half the survey respondents the buying process
also anticipate marketing staff  To achieve better buyer
increases relevancy and client intimacy,
 Although growing in marketers need to re-examine
importance, social media is still marketing spending allocation
a small percentage of the and invest in talent and
marketing budget systems to support an
expanded marketing focus

Survey Methodology and
Demographics


Study Participants


Methodology
 Online Web-based survey
 Survey invitations were emailed during December 2010 and January
2011 to ITSMA member and select non-member companies
 46 representatives from 45 companies responded

Number of Companies Number of Companies Response
Invited to Participate Responded Rate
101 45 45%

Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011

ITSMA 2011 Budget Allocations and Trends Study
Quality Control
 Participation by invitation only
 One response per marketing organization
 All respondents screened for:
– ITSMA member marketing community relevance
– Budget authority
 Rigorous post-data collection cleaning
– Validate responses
– Check for consistency
– Remove outliers


Study Participants
46 respondents from 45 companies
Alcatel-Lucent KPMG
Atos Origin Which of these categories best describes Lenovo
Avanade, Inc. your industry subsector? Microsoft Corporation
Avaya % of Respondents (N=46) Nokia Siemens
Aviat Networks Networks
Black & Veatch Northrop Grumman
BT Oracle
CA Technologies Other* (11%) Patni
Capco Philips Healthcare
Network systems and Rimini Street, Inc.
Capgemini
CGI
solution provider (7%) SAP
Cisco SBS Group
Cognizant Telecommunications Professional Siemens Enterprise
CompuCom services provider (9%) services Communications
CSC firm (52%) SITA
Computer systems Steria
EMC
Event 360
and solutions Symantec
Fujitsu provider (9%) Talent Partners
Geehan Group Tata Consultancy
Hewlett-Packard Software solutions Services
IBM Global Business Services provider (13%) The TriZetto Group
Wipro Technologies
Infosys Technologies
Wood Mackenzie
Infotech
Xerox
KPIT Cummins Infosystems Ltd.
*Office equipment, industrial automation, test and measurement, etc.

Survey Highlights


ITSMA members are projecting growth

What was the percentage growth rate of your company or division revenue?
Mean % of Growth
FY2010/2009 FY2011/2010 (est.)

15.7
13.7
12.2 12.4
10.5
9.5 9.5
8.0

Worldwide North America EMEA Asia/Pacific
Growth Rate Growth Rate Growth Rate Growth Rate
(N=29) (N=16) (N=15) (N=13)


With marketing budgets also projected to grow, marketers
can increase focus on relevancy and intimacy while
maintaining investments in lead generation and management

In FY2011, do you
expect your
15%
marketing budget Average
to increase, decrease: 8%
decrease,
or stay the same 59%
when compared to
FY2010?
% of Respondents Average 26%
increase: 15%
(N=46)


Services marketing budgets, after reaching an all time low
as a percentage of revenue, are returning to historical
levels: between 1% and 2% of revenue
What was the size of your annual marketing budget as a percentage of
revenue? Mean % of Revenue
FY2010/2009 FY2011/2010 (est.)

1.6 1.6

1.4 1.3 1.3

0.9 1.0
0.8

Worldwide North America EMEA Asia/Pacific
(N=33) (N=21) (N=19) (N=16)


Marketing staff is also expected to grow

What changes do
you anticipate in 11%
your marketing Average
staff in FY2011? decrease: 6%
Will the number of
FTEs (full-time 53%
equivalents)
increase, decrease,
or stay the same? Average 36%
increase: 8%
% of Respondents
(N=45)


Marketers are increasing their spend on demand
generation, sales enablement and content
generation
What are your spending plans in FY2011 for the following budget categories?
% of Respondents (N~44)
Demand generation and lead management 64 4 31

Sales (channel) enablement and support 58 2 40

Content development 52 7 41

Brand and communications 49 18 33

Offering management 47 9 44

Business partners/alliances 45 3 53

Strategy and market planning 40 4 56

Market intelligence/competitive intelligence 34 7 59

Customer satisfaction/relationship management and monitoring 33 12 56

Marketing operations 20 15 65

Other 20 25 55

Increase Decrease Stay the Same


Marketing still needs to feed the pipeline, but we are
starting to see a shift in priorities to also encompass
client intimacy
Rank
2011 2010 2009 2008
1 2 4 3 Generating demand
2 1 1 2 Enabling the sales force
3 5 2 1 Differentiating/re-positioning the company, brand, or offerings
4 3 7 5 Developing thought leadership content that drives business
5 7 9 11 Measuring marketing’s impact on the business
Increasing focused marketing programs for vertical/industry
6 6 6 10
markets
7 16 11 8 Increasing use of Account-Based Marketing
Deepening customer insight to improve segmentation and increase
8 17 17 12
personalization
Building or enhancing a more effective lead management and
9 27 – –
nurturing model
Increasing cross-divisional marketing programs and messaging
10 – – –
(minimizing marketing silos)
Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2007, 2008, 2009, 2010, 2011

Marketers intuitively recognize the need to
increase relevancy and intimacy
Which of the following marketing skills do you believe are essential to your
organization’s future success? % of Respondents (N=45)

Client focus 71
Vertical market/industry expertise 64
47 Business development/sales-driven
44 Digital media
42 Collaboration
38 Strategic planning
36 Analytical
29 Cross-silo systems thinking
27 Creativity | Project management
20 Writing
18 Research | Ability to experiment and adjust course
4 Technology | Other

Note: Up to 5 responses allowed.

Marketers are investing in online and social media
marketing, which are critical to improving relevancy
How do you anticipate the components of the marketing mix changing in
FY2011? Will spending increase, decrease, or stay the same?
% of Respondents (N~40)
Online marketing 82 5 14
Social media 81 5 14
Direct marketing 48 28 25
Collateral 36 27 36
Industry analyst relations 35 65
Private events, seminars, and conferences 35 14 51
Public/press/media/community relations 30 8 63
Advertising 21 21 59
Public trade shows 12 54 35
Sponsorships 6 41 53
Other 26 15 59
Increase Decrease Stay the Same


…But online and social media marketing are still a
small percentage of the total marketing budget
4.3% Interactive/Online/Digital Marketing
How was your Interactive/Online/Digital Marketing spend allocated
across the following categories?
Total Marketing Mean % Interactive/Digital Marketing Budget (N=30)
Budget
22 23 Other
7
11
8 Mobile marketing and apps
8
8 Social media
7
9
9 Client extranets or Microsites
9
13 Intranet and internal collaboration
18
14 Webinars

Search engine optimization (SEO)/paid search/online
advertising
37 33 Email, electronic newsletters

Corporate Website

FY2010 FY2011 (est.)


Despite client desire for greater intimacy, marketers
are spending less aggressively on programs at the
later stages of the buying process
What are your spending plans in FY2011 for the following budget categories?
% of Respondents Increasing Spending (N~41)
Demand generation and lead management 67

Sales (channel) enablement and support 57

Brand and communications 50

Content development 49

Offering management 45

Business partners/alliances 43

Strategy and market planning 43

Market intelligence/competitive intelligence 34

Customer satisfaction/relationship management and monitoring 30

Loyalty programs, senior client Marketing Operations 19
engagement programs, service
quality and client satisfaction Other 21
monitoring, reference management,
customer councils, user group or
community management


Nevertheless, budget is flowing in the right direction

How is your marketing budget (including staff) allocated among these activities?
Mean % (N=31)

23 27 Retention, loyalty, and growth

29 28
Pipeline progression

48 45 Lead generation

FY2010 FY2011 (est.)


In 2011, services and solutions marketers must seize the
opportunity to increase buyer relevancy and client
intimacy to achieve trusted advisor status

Stage 1.
EPIPHANY

Stage 2.
AWARENESS
Relationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stage 6.
Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY TRUST
Need Search Alternative Selection and Post-Purchase Partnership
Buying Recognition Evaluation Purchase Evaluation
Process Clarify Explore
Explore the Finalize the Select the Evaluate
possibilities objectives short list provider satisfaction mutually
and solution beneficial
Identify a specifications Solicit Negotiate Measure initiatives
need or proposals the contract value
opportunity Identify delivered Provide
Evaluate Ultimate
alternatives
(short list) alternatives sign-off
references
and advocacy
Stage 3.
INTEREST

Stage 4.
CONFIDENCE


To achieve better buyer relevancy and client
intimacy, marketers need to:

 Re-examine marketing spending
allocation
 Expand marketing focus to:
– Build greater relevancy
– Create intimacy

 Invest in talent and systems to
support the expanded
marketing focus


Appendix: Table of Contents for Services Marketing
Budgets and Benchmarks: 2011 Budget Allocations and
Trends, January 2011

Slide
Survey Highlights 3
Survey Methodology and Demographics 28
Size of the Marketing Budget 52
Services Revenue Growth 60
Marketing Staffing 64
Services Marketing Budget Allocation 93
The Marketing Mix 123
Marketing Operations and Automation 144
Marketing Priorities 159
Appendix: Definitions Used in This Report 170


Appendix: Definitions Used in This Report
 FY: Fiscal Year
 Size of the Marketing Budget: Calculate marketing spend as a % of revenue. Include staff expenses. When calculating a
specific marketing budget, use the corresponding revenue. For example, use total revenue in EMEA to calculate the size of
the marketing budget in EMEA.
 Major Categories of the Marketing Budget
– Strategy and Market Planning: Market segmentation, opportunity analysis, core competency identification, brand and
positioning
– Market Intelligence/Market Research: Competitive analysis, voice of the customer, market research—syndicated or
custom, for tracking and analyzing industry and competitor trends
– Offering Management: Develop and oversee service products and programs, including voice of the customer and
offering related market research, new offer development, lifecycle management, portfolio management, pricing, go-to-
market strategy, value proposition development
– Content Development: Development of marketing content, including thought leadership, case studies, and reference
materials; identifying, evaluating, researching ideas
– Brand and Communications: Marketing program development and execution to communicate who you are and what
you do: brand communications, advertising, PR, analyst and influencer relations, Website, SEO, Intranet, social media,
word of mouth, sponsorships
– Demand Generation and Lead Management: For specific offerings/industries: marketing program/campaign creation
and execution, including events (on- and off-line), direct marketing, telemarketing, database marketing, lead
nurturing/pipeline progression
– Sales (Channel) Enablement and Support: Account-Based Marketing programs, bid and proposal support, tools,
training, other support, guidance, and management for the sale of services via a corporate sales force, partners, channel
firms, etc. Do NOT include direct sales expense here (commissions, salaries, travel expense, etc.)
– Customer Satisfaction/Relationship Management and Monitoring: Loyalty programs, service quality and client
satisfaction monitoring, reference management, customer councils, user group or community management
– Marketing Operations: Marketing staff training and professional development, marketing management, marketing
software and tools, metrics, and analytics
– Business Partners/Alliances: Partner strategies and programs, relationship management, and partner communications
– Other: Could include travel and entertainment, corporate allocation, administration, or anything else that did not fit in the
above buckets but is part of the marketing budget


To Purchase the Study For More Information
Julie Schwartz
Member price: $595 Senior Vice President
Research and Thought Leadership
Non-Member price: $995 ITSMA
Email: jschwartz@itsma.com
This report is available free to companies that provided Phone: +1-781-862-8500, Ext. 112
detailed data in the study.

Alcatel-Lucent EMC Patni If your company is on this list you are
Atos Origin Event 360 Philips Healthcare entitled to receive the report for free,
Avanade, Inc. Fujitsu Rimini Street, Inc. please send us an email (using your
Avaya Geehan Group SAP company email) and request your free
Aviat Networks Hewlett-Packard SBS Group report. Orders will be processed the
Black & Veatch IBM Global Business Siemens Enterprise next business day.
BT Services Communications For non-participating companies, this
CA Technologies Infosys Technologies SITA report is available for sale at member
Capco Infotech Steria and nonmember prices. To order, click
Capgemini KPIT Cummins Symantec the “Buy” button at the top of this
CGI Infosystems Ltd. Talent Partners page.
Cisco KPMG Tata Consultancy
See if your company is an ITSMA
Cognizant Lenovo Services
member
CompuCom Microsoft Corporation The TriZetto Group
CSC Nokia Siemens Networks Wipro Technologies Download the datasheet (including
Northrop Grumman Wood Mackenzie order form) PDF (272 KB)
Oracle Xerox Email ITSMA for more information

For more ITSMA research, visit ITSMA’s Online Library at
http://www.itsma.com/research/online-library/


ITSMA Budget Study 2011 Abbreviated Summary

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