Marketing Budgets and Staff on the Increase, ITSMA Research Shows

ITSMA study on 2006 services marketing budget allocations and trends shows technology services marketing budgets increasing by average of 17%

LEXINGTON, Massachusetts—March 21, 2006—ITSMA, a membership community that helps companies market and sell technology services and solutions, today announced the publication of its Services Marketing Budgets and Benchmarks Study: 2006 Budget Allocations and Trends. Based on data gathered from companies including AT&T, BearingPoint, Cisco, GE Healthcare, HP, IBM, Microsoft, SAP, Xerox, and others, the report highlights that services revenues are expected to rise, marketing staffs are increasing in size, and marketing budgets are growing.

“Relief is finally on the way for overworked and underfunded services marketers across the technology industry,” said Julie Schwartz, senior vice president of thought leadership and chief research officer at ITSMA. “Two-thirds of the companies we surveyed for this study said that their budgets are increasing this year, and more than half of the participating companies are hiring. All in all, 2006 is shaping up to be a good year for services marketing.”

Key trends revealed include:

• ITSMA members project 15% services revenue growth in 2006
• 67% of the companies surveyed indicate that their budgets are increasing in 2006—by an average of 17%
• 57% of companies are increasing the size of their services marketing staff, with 21% staying at 2005 levels and 21% decreasing headcount

Marcom Is Getting a Smaller Piece of the Pie

The report also reveals important new trends in marketing spending. According to the study, the percentage of the overall services marketing budget allocated to marketing communications continues its steady downward trend, declining from 42% of the total budget in 2002 to 30% this year. ITSMA sees two reasons for this shift:

• As marketing assumes more of a leadership role within the company—helping to develop new solutions and define new markets, for example—it is adding new activities that are eating into marcom’s share of the budget.

• Marketers have begun to migrate away from traditional advertising, printed collateral, and large public trade shows to less costly interactive activities and smaller, more intimate seminars.

Key Areas of Investment in 2006: ABM, Thought Leadership, and Solutions

Account-based marketing (ABM) emerges as an area of increasing investment, with 14.5% of the services marketing budget earmarked for it this year, compared with 10.6% in 2005. Similarly, investment in thought leadership is on the rise—up to 16.1% of spending in 2006 from 13.5% in 2005. Additionally, a vast majority of study participants (84%) believe that total company revenue from solutions is increasing, making it a key area for marketing investment as well.

“When we asked marketers to identify their priority issues for the year, differentiation and strengthening relationships with customers and strategic accounts ranked high on the list,” said Schwartz. “Making investments in solutions development and portfolio management, thought leadership, and ABM are all excellent ways to sharpen your competitive differentiation and improve relationships. ITSMA will continue to look to industry leaders for best practices in these areas in 2006.”

For more information on Services Marketing Budgets and Benchmarks Study: 2006 Budget Allocations and Trends, visit http://www.itsma.com/research/abstracts/b016.htm.

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ITSMA specializes in helping companies market and sell services and solutions more effectively. We work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA annual program clients include business leaders such as Avaya, BT, Cisco, Deloitte, Hewlett-Packard, IBM, Microsoft, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing℠, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.