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Technology Marketing Investment Forecast

The IDC CMO Advisory Service projects that IT vendor marketing budgets will increase by 6.4 percent for the full year 2005. This is the fastest rate of increase over the past four years. Based on IDC�s recently completed Technology Marketing Benchmarks survey, IDC expects marketing investment to continue to show strong growth over the next twelve months and will increase by 7 percent in 2006.

IDC analysts find that as tech vendors begin to more fully realize that revenue and share gains are harder to come by in the slower growth IT economy, sustained marketing investment is required to make real progress in revenue and share gains. �This is the dawn of tech marketing," said Rich Vancil, vice president with IDC's CMO Advisory Service. �The only tech vendors who will survive and thrive will be those whose marketing organization is highly skilled � both for internal and external execution.�

IDC has found that as tech marketers seek to build their capabilities, many of them are turning their attention inside the marketing organization to improve their �back office," including improvements in processes, people development, and organizational alignment. "Leading marketers are focusing on developing their infrastructure and organization because the job of marketing is getting harder," added Vancil. "These executives understand that their ability to make significant future contributions will require greater marketing proficiencies than what they have today."

To accomplish these goals, IDC sees a renewed investment in marketing hiring and professional development. IDC closely tracks the industry average Program-to-People ratio, the percentage of each marketing dollar invested in programs versus people who execute those programs. This now stands at 63.5 percent, a 4.2 percent decrease over 2004, which indicates that CMOs are making "net new" hiring decisions. Key areas for new marketing staff increases include product marketing, direct marketing, and marketing operations. In IDC�s analysis, the rise of the marketing operations function is one of the most significant new trends for 2005. Approximately 75 percent of tech vendors now have some level of formalized marketing operations staff in place while the average tech vendor has three marketing operations staff for every 100 full time marketing staff.

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