This is an excerpt from the latest Socialight Insights Report: 2016 B2B Social Marketing Budget Trends. Download the report today to access the Top 6 Insights, and Top 6 Takeaways for 2016.
Key Research Insight:
Largest Firms Late To Adopt Innovative Initiatives.
In the survey for this report, we asked a few general questions about marketing budgets with respect to the firm’s total revenue, and about the percentage of total marketing budget allocated to digital channels.
The results were, nonetheless, surprising.
Generally, marketing spend as a percentage of revenue fell on a curve with two peaks and two valleys.
The smallest firms, revenues <$25 million, and those upper mid-sized firms between $100 and $999 million, allocate the largest percentage of revenue toward marketing.
Comparatively, mid-sized firms on the lower end of the spectrum, from $26-$99 million, along with the largest firms, those at $1B+, had the lowest percentage of of their revenue invested in marketing.
SMALLER FIRMS DIFFERENTIATE THROUGH DIGITAL
In contrast, firms’ digital spend as a percentage of total marketing spend was very consistent across revenue brackets.
The largest B2B spenders, by percentage, on digital marketing are the smallest firms, likely looking to gain competitive differentiation in the market through new, innovative methods.
Firms <$25 million are allocating over 30% of total marketing spend on digital channels, which is significantly higher than the average for all other revenue brackets (18%).
Digital spend at firms larger than $25 million in revenue all fluctuate tightly between 16% and 20% of total marketing spend.
This indicates that these larger firms have potentially identified the optimal digital marketing mix for their products and services, and therefore can market through digital channels more efficiently than can those smaller firms who are still working on identifying and optimizing the right channels.
THE WAIT-AND-SEE STRATEGY
However, it also may indicate that larger firms have more budget rigidity and are therefore less likely to invest in emerging and innovative channels.
While this wait-and-see strategy is not necessarily a bad one for the largest firms who have the market-leader position – it allows them to be patient with newer digital channels and invest efficiently once the channel matures – it also opens them up to the risk of newcomers heavily investing in digital channels and stealing market share.
The wait-and-see strategy that appears to be in place for many mid-sized firms, though, is unwise, as it allows smaller firms that intelligently invest in digital to potentially leapfrog their position in the marketplace.
These firms do not necessarily have the market-leader position and should be making every effort to integrate digital initiatives like Content Marketing, Community Marketing, Online Reputation Management, and others, so as to incrementally gain market share and challenge the industry leaders on the digital marketing front.
As Kevin French of Stuzo states in the report:
“Our B2B clients, from SME to Fortune 100, are betting big on the adoption of innovative marketing channels and technology in 2016.
The digital products that Stuzo creates – mobile apps, IoTs, social communication platforms – were once strictly a B2C playing field, but now B2B marketers understand that they really need these solutions, too.”
Download the full report to see the Top 6 Insights, and Top 6 Takeaways for 2016: