While expectations of marketing departments are increasing, funding for marketing activities continues to decrease disproportionately to that of other departments, according to a study from consulting firm, Launch Pad, and communications firm, Blanc & Otus.
For the annual technology marketing study, Marketing Expenditures for Technology Start-Ups, marketing executives in business-to-business high-tech firms were questioned about marketing budget allocation.
The study shows that annual budgets for all departments within high-tech start-up companies continue to shrink, and that marketing has suffered the worst decline, falling (on average) from US$2.8 million in 2001 to just over US$1 million in 2002. Engineering, on the other hand, has increased its percentage of corporate expenses from 29% in 2000 to over 50% in 2002.
Successes despite cuts
The study goes on to highlight ways in which start-up marketers are changing the tactical marketing mix and succeeding despite their smaller budgets.
"Marketers are under pressure to generate leads for the sales department, while also being responsible for everything from telemarketing to business development to documentation - all with fewer resources and far less funding than ever before," explained Shelley Harrison, CEO for Launch Pad. "They are being highly creative with their tactics and the ways in which they allocate their precious funds."
Public Relations continues to get the biggest share of overall marketing expenditure, increasing its share from 19% to 25% over the past year. It is also seen as the most effective marketing tactic for start-ups.
Outbound lead-generating telemarketing saw the largest actual budget increases compared with 2001 budgets, reflecting every company's need for demand generation.
"Selecting which marketing programmes are the most appropriate has been a big challenge for technology start-ups," said Greg Spector, CEO for Blanc & Otus. "Our report provides a road map for developing programmes that improve the bottom line and support the existing business plan."
Launch Pad interviewed marketing executives of over 30 high-tech start-up companies throughout the US and Canada, and reports on marketing issues such as key challenges, size of overall budget, staffing, specific budget allocations, the effectiveness of various tactical programmes, and programmes in which marketers felt they had over- or under-invested in the past. The report can be bought online at Launch Pad's web site.