Don’t Believe All You Hear About Rising B-to-B Marketing Budgets

I love planning season. It’s that magical time of year when children return to school, and many companies are looking ahead to the coming fiscal year and laying out their plans for global domination.

This is also the time of year when my colleagues and I at SiriusDecisions are busy helping marketing leaders prepare to achieve their goals by assessing and optimizing organizational structures, go-to-market strategies, staff skill sets, technology infrastructures, operational processes, tactic mixes and, of course, annual budgets. Year after year, marketing leaders’ plans and expectations are influenced by the breathless predictions – of pundits, bloggers, industry publications and research firms – of increased or decreased b-to-b marketing budgets. Thankfully, this year (as in the previous two years) everybody is predicting increases. However, these predictions can’t necessarily be taken at face value.

At SiriusDecisions, we conduct primary research (via surveys and interviews) to understand business leaders’ expectations about how much marketing budgets will change in the coming year. However, our research doesn’t end there. Through an ongoing benchmarking process that we conduct with hundreds of b-to-b organizations across industries and geographies, we can see the budget changes that are actually realized by these organizations.

The bottom line: After years of comparing predictions against realities, we can safely say that when it comes to predicting marketing budget increases, CMOs are an optimistic bunch. They tend to anticipate increases that are approximately 50 percent greater than what is actually realized. Since these same marketing leaders are the ones who fill out surveys, the predictions of budget increases made by most pundits, bloggers, publications and research firms also tend to be higher than the reality by about 50 percent.

So take this as fair warning: When it comes to b-to-b marketing budget predictions, don’t believe everything you hear.