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How much should industrial companies spend for online marketing?

I've been on the sales end of industrial marketing for the past 15 years. I've sold various products including website design, SEO, banner ads, Google Adwords and industry directories. Still, when it gets down to advertising, many manufacturing or industrial businesses appear to be in the dark about what's an appropriate figure to spend on marketing to generate continued growth.

Some VPs and marketing managers I speak with on a daily basis are still surprised about the price of marketing. Some understand the value in marketing, while others are completely blown away by the cost.

I thought I would share with you what I've found other businesses are spending, to help you determine what you should be doing to better compete in your market. Typically, advertising budgets are tied to a sales ratio. Margin-driven businesses tend to spend a larger amount on advertising. Volume-driven businesses tend to spend a lesser amount on advertising.

A good rule of thumb is that at least 15% of your total annual marketing budget should be allocated to online marketing.

I find that the typical B2B industrial or manufacturing business tends to spend anywhere between 2-6% of sales revenue on marketing.  Industrial companies looking to maintain their  current market position will likely spend on the lower end of the scale.  Those that are looking to grow their position in the market will be on the upper end of the spectrum.

We all know that trade shows and advertising in trade journals make up a significant part of the marketing dollar for many manufacturing businesses. Year after year companies choose the same exact marketing buys without a clear idea of how well those methods work. The Internet has turned everything upside down. Buyers aren't waiting for the next trade show to get information about equipment or services they need. They're looking for that information online.

The Buyersphere Report 2013, an annual report that tracks B2B buyer behavior, reported that 47% of industrial buyers use supplier websites to get product information, 29% used a search engine, compared to 28% that use an industry specific intermediary.

So, have industrial businesses adjusted to this increased emphasis to online product/service research? If you ask me, for the most part the answer is NO.

A good rule of thumb is that at least 15% of your total annual marketing budget should be allocated to online marketing. This includes items like ongoing website development, SEO, web-based PR tactics, blogs, video development via YouTube, and various social media strategies. Some B2B surveys like the one published by the Content Marketing Institute report that businesses are spending as much as 33% percent of their marketing dollars for online marketing content.

Those are the ones that are 100% bought in to the value of online industrial marketing. On the other hand, I still see crazy spending at every manufacturing trade show I attend for elaborate trade show booths, massive capital machinery on display, and countless numbers of employees standing around happy to speak with anyone walking by. I see it again every time I pick up an industrial trade magazine with those full page 4-color ads. Who's reading the print version these days?

Even more interesting is to look at the online marketing efforts for many of those companies. Most have dated websites with flash-driven images, broken links all over, data sheets from 2004 and little to no effort on search engine optimization (SEO).

With three-quarters of the industrial buyer market saying they use Internet first to do their product research, doesn't it make sense to re-think how your company is allocating its annual marketing budget?

For a FREE evaluation of your website's performance and opportunities to improve lead generation, contact John Inama at 877-799-9994 ext. 2104 or fill out our form.

 

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