First in a series of posts looking at results and insights from our study of building products marketers
When we joined with the American Institute of Architects and Centro to commission a proprietary study of building products marketers (BPMs), one of the first things we wanted to understand was what companies’ B2B marketing budgets are as a percentage of total sales. Let’s take a quick look at what we learned.
B2B marketing budgets are increasing significantly
B2B budgets are a significant percentage of company sales, and are reaching 18 percent of sales (average) in 2021. Not an insignificant amount. Pre-pandemic budget share was at 15 percent and growing even then.
Company size an indicator of budget increases.
The largest BPMs are increasing B2B spend aggressively. In a hot market, companies with sales over one billion have increased budget 4% since 2019. Companies with sales of 100-500 million are up 1% over the same time period.
Why increase budget to capture market share?
The competition has expanded on their pre-pandemic marketing in order to gain brand awareness and drive results while the market is hot. Burns Real Estate mid-year outlook expects that nearly $400 billion will be sent on building materials in 2021.
With challenger brands in the $100-$500M revenue range being flat with their marketing spend as a percentage of total sales, and larger champion brands increasing spend to compete, the focus is on how to approach budgets. Challenger brands generally have more agility to learn and test faster, offsetting trying to match the percentage of spend used by champion brands. Champion brands are doing a nice job of not resting on their laurels and are focused on remaining competitive or even on growing the brand.
If you don’t respond accordingly, the risk is that your brand will be lost in the shuffle. This doesn’t mean that you’re outspending the competition but during a period of great disruption you’re either the disrupter or the disrupted.
Complete study results available for download
Download our “Reimagining Building Materials Marketing For A New Economy” white paper for additional details about where BPMs are focusing their budgets and fast ways that you can get started towards best-in-class marketing strategies.
Until next time.
If you want to discuss the study and opportunities further, please contact me.