As many of you know, every year around this time we run a survey about marketing budgets in 2018. The survey is live at this link. Please take a moment to share your insights with your fellow marketers. Sharing your knowledge makes us all smarter.
We’ve added an incentive this year. If you are one of the first 100 respondents, your name will be entered in a draw to win one of three gift cards from Amazon worth $100 each.
While we are waiting for the survey results, here are my fearless predictions of what will impact engineering marketers in 2018.
First, I predict that budgets for technology marketers will continue to grow. We’ve seen this trend over the past several years, and with the economy around the world running strong, and as marketing continues to displace sales as the primary way to engage customers, there is every reason to predict that this will continue. You might even challenge whether this prediction is in fact, “fearless” as it may appear to be too easy a call, like the Starbucks barista misspelling your name in ways you couldn’t possibly imagine.
In this post I’ll go out a little further on a limb regarding my predictions about:
- Why lead generation is doomed in 2018
- What the year will hold for mobile advertising for technical audiences
- What will happen to marketers who decide to build their own audiences
- Why Google and Facebook will predict purchase intent in 2018
Marketing budgets will continue to grow
Last year marketers reported that their budgets were growing, with more than twice as many marketers reporting bigger budgets than smaller.
There are (at least) three reasons why I predict that marketing budgets will go up in 2018, which in turn feeds management’s expectations of continued top-line revenue growth, creating the never satisfied monster of expectations that must be fed:
- The number one reason that marketing budgets will go up is that marketing teams can increasingly prove that their efforts drive leads that in turn become pipeline and revenue.
It was not always thus, and for some companies, connecting these dots is still more art than science. However, with the increasing adoption of marketing automation tools and the transparency of digital marketing, we are getting ever better at connecting a sale to its source. And that source is proving to be marketing in many instances.
If there is one thing I know from being a reformed CFO, it is that executive teams will double down on proven winners. Since marketing has proven its value, it will get more budget until such time as it no longer makes incremental contributions to revenue at a reasonable price. When we collectively reach that plateau, budget increases will stop. That will happen someday, but not in 2018.
- Reason number two that marketing budgets will go up is that marketing costs more than it used to. Now your rising budget will be required just to maintain the status quo. Take search marketing for example. Many marketers report that there has been an endless upward trajectory to the cost of their preferred search terms.
Another example is the cost of creating content. It’s not only that the cost of content itself has risen, but also that the quality required to capture attention has gone way up. For any of you who were industrial marketers three years ago, you will recall a time that blog posts usually ran about 400-600 words and cost less than $1,000. Now blog posts routinely run double to triple that length and cost 2-3 times as much to produce. However, they don’t necessarily get more views, engagement or clicks than they used to. The field has simply become more competitive, and so to stay in the same place, you have to spend more than last year. This is not an easy concept to sell to your CFO.
- Marketing continues to displace salespeople as the number one way to engage customers. This means that companies are shifting their spending from sales costs to marketing costs, and marketing budgets are going up as a result.
Over the past several years we have asked marketers whether marketing is becoming more important relative to sales, and every year marketers confirm the continued rise in importance of marketing.
Lead generation is doomed in 2018
As marketers, we know that there are only so many companies that can be prospects for our products. The number of prospects may be very large, particularly when your prospect companies may have dozens of locations that could use your products, and there may be multiple influencers in each location. That scenario can make your potential pool of prospects very large indeed.
But large is not infinite. My point is that there is a finite number of possible leads for your product. And so, as we get better and better at matching prospects to products, we will eventually reach a time when you can’t find more leads from your product than you did last year. Let’s also acknowledge that no matter what you do, a large share of your potential prospects will never download your white paper, register for a webinar, nor subscribe to your email newsletter.
This recognition of limited inventory happened long ago in search, with the result that all marketers understand that the price for any given term will go up as more marketers bid on a given set of terms.
Meanwhile, the trickle of content that was aimed at engineers has become a flood. All marketers are producing more content in the hopes of reaching more engineers. At some point, their inbox becomes flooded and they turn it off. We have already seen the open rates on email start to decline. The remedy for most marketers is to make better, more engaging content, but the bar is getting higher and the quantity of good leads from each piece of content is going down.
I predict that in 2018 lead generation campaigns will face diminishing returns. The result of the factors set out above is that the cost of leads will go up. The quality will flatline, or possibly even decrease. This will all happen while most of us will be evaluated on leads. This is not happy news. For many, 2018 will be a bitter disappointment because more spending on lead generation won’t generate proportionately more leads.
There will be a mobile advertising platform for technology marketers
Last year most engineering marketers admitted that they did not have a budget for mobile advertising. That made sense last year. There was no tailored platform for advertising on mobile.
Why is that when mobile is only getting bigger in terms of the time that our prospects spend on it? When we surveyed 1,187 engineers about their information habits, 61% said that they are using mobile devices to access engineering content, up from 53% the year before.
Our B2C colleagues have upped their spending on mobile as shown in the chart below. The fast-growing green parts of the column are mobile ad spending while the slow-growth blue columns are desktop spending.
The challenge B2B marketers face, and engineering marketers in particular, is that there hasn’t been a relevant mobile platform where they can find their prospects. Sure, you can advertise on Facebook or Google and have those ads appear on relevant sites, or retarget your users as they float around the Internet. Or like most marketers, you can pivot your budget to content that can be consumed on a screen of any size, but in terms of a dedicated mobile platform, nothing has developed as a clear winner.
In 2018, I predict that some enterprising software company (ies) will develop excellent ways to reach engineers on mobile devices.
What happens to marketers who invest in building their own audiences
In the book, Killing Marketing, Joe Pulizzi and Robert Rose argue that brands should strive to build their own audiences by developing their own publications. This, they argue, will allow marketers to reach their audience in a more authentic way, and will allow them to seamlessly identify prospects from within the audience at a time when they are ready to buy, thereby eliminating the annoyance of interruption advertising and avoiding the cost of having to continually pay media to reach the same audience.
Pulizzi and Rose point to winning brands such as Red Bull Media as the zenith of this strategy, when a brand’s media efforts are so successful that they are able to sell advertising to other marketers to fund their own audience development efforts.
As set out in a recent blog post, Technology Brand Launches a Digital Publication, the numbers are not all rosy. This path requires substantial investment, and will fly directly into the headwind of the trends towards increased volume and quality of content. How easy will it be to garner a valuable audience for your brand while every other marketer is doing the same thing?
Like every other technique in marketing, starting a publication works well for the first movers and then has decreasing returns to each successive team who implements it. Like banners and email before it, this technique is simply another approach that will eventually find its place in the constellation of tools that marketers use.
My prediction for 2018 is that many large technology brands will start their own publications this year. They will tough it out in 2018 and tell positive stories of their success. However, I predict that the path to publisher will end in tears for many, and at least half of those brands who start down this path in 2018 will abandon that dream in 2019 or 2020.
Google and Facebook will get scarily close to determining purchase intent
Facebook and Google advertising will become more useful to marketers thanks to big data and machine learning. Already many of us dedicate a chunk of our budget to both of these platforms. They undeniably work. Google has been excellent for years at matching search results and landing pages (the Context) to your products, while Facebook has been great at matching people (their Identity) to your products. In 2018, both platforms will get much better at matching “intent” making them increasingly relevant to technical B2B marketers like us.
For years we have been thinking of Google in terms of “search.” In 2018 I predict we will all start to think of Google’s ad platform differently. Why? It’s because Google can not only combine our search history and our browsing history, but Google can comb through LinkedIn and Twitter to identify our jobs as well.
Advanced AIs using machine learning can analyze this data to see what patterns eventually lead to steps in the buying process, such as requests for quotes. This is powerful stuff. You might think that this is only possible for consumer purchases because B2B purchases involve so many more buyers. However, with enough data, even B2B purchases will become more predictable.
Like Google, changes at Facebook mean that you need to start advertising there as well, if you aren’t already. First of all, last week Facebook announced that they would include fewer company messages in the news streams of their users. Accordingly, if you want to reach anyone on Facebook, you’ll have to pay for it.
Secondly, many marketers have thought of Facebook as being used by every demographic except our target market of engineers. That has long since been debunked. Yes, you can still find 60-year-old engineering decision makers who don’t have an account, but for considered purchases such as engineering technology, you need to reach a lot of people on the decision-making team, and a lot of those people are on Facebook.
Facebook knows a lot about its users – not just demographic data, but also friend connections (what they call the social graph) and interests. From there, it is not a huge step to infer job roles and then start to move towards purchase intent. In 2018, I predict that Google will get there first, but that Facebook won’t be far behind.
Other social media platforms will start to make an effort toward predicting purchase intent as well. LinkedIn is particularly well placed to do so, but historically they have been slow to capitalize on their unique place in social media, so I predict that LinkedIn will lag the field.
There are lots more predictions
Will chatbots start helping your web site visitors become prospects in 2018? Will your marketing automation vendors offer machine learning plug-ins to automate recommended content to navigate your prospects through a buying journey? I predict yes and yes.
Other things that have long been promised won’t happen. For example, banner ads won’t die (less than 10% of visitors to engineering.com have ad blockers, for example) and email marketing will still be around because engineers actually read their email if you can get it to them.
Help navigate the future
If you’ve made it this far, thank you. I hope you found these predictions useful. Feel free to disagree on social media, of course, because we can’t all agree on the future.
If you would be so kind as to share this post via email or social media, I would appreciate it.
And if you can take 5 minutes to complete the marketing budget survey, you will help all of us become better marketers in 2018.