B2B Spending on Mobile to Fall Nearly 40 Percent

Mobile marketing expenditures by B2B companies are poised to drop nearly 40 percent this year.

According to Outsell’s “Annual Advertising and Marketing Study 2010: Total U.S. and B2B Advertising,” B2B firms will reduce their mobile marketing spending by 38 percent this year. “This is the first year that it’s negative,” said report author Chuck Richard, VP and lead analyst at Outsell. Mobile spending by these marketers will fall from $325 million in 2009 to $202 million this year, Richard told ClickZ News. In 2009, B2B mobile spending rose 5 percent.

He chalks it up to “first year post-recession effect.” The predicted drop, however, is not a long term indication that B2B spending on mobile will be depressed in future years, he added. And it’s worth noting mobile is the only digital channel measured by the publishing research firm that will experience a decline in B2B spending. Meanwhile, B2B marketers will boost digital marketing expenditures this year on channels such as search, video, and social media.

There are a few factors contributing to the expected mobile spending reduction. Because these marketers are so focused on allocating their pared-down budgets to campaigns producing high ROI, they are pulling dollars from mobile, which is considered experimental for B2B marketers.

Another reason some B2B marketers are not spending a lot on mobile lies in the nature of typical business purchases. Many businesses don’t base buying decisions on geographic proximity, a key element of most consumer-aimed mobile campaigns. “Wireless marketing benefits strongly from your location,” said Richard. He also suggested that the immediacy of consumer-aimed mobile campaigns has less impact in the B2B space. “In B2B you have long purchase cycles,” he said.

Still, Richard explained that some B2B verticals such as sales and construction do rely on mobile devices, meaning marketers trying to reach those types of businesses should not neglect mobile. Nor should B2B publishers debating whether it’s worth it to pursue mobile projects in light of the spending forecast.

“It’s a partial signal,”suggested Richard. Although paid apps and mobile ads have not been major revenue streams yet, publishers “can’t afford” to risk losing potential mobile readers, he said.

All in all, mobile’s share of B2B marketing spending will contract to 0.4 percent this year.

The minute portion of B2B spending going towards mobile is another reason to temper reactions to the predicted drop off. “We’re into the realm of math of small numbers; there’s not much money there to start with,” said Richard. He added that he “would be surprised” if the B2B mobile spending growth rate is negative in 2011.

B2B marketers spend over half of their digital budgets on their Web sites, and that number is expected to grow 7.5 percent this year. Search engine marketing, which accounts for the next largest portion of digital spending – around 15 percent – will grow 17 percent in 2010, according to the report.

Significant growth is expected in spending on webinars, video sites, and social media. Webinar related expenditures will go up 26 percent, video sites around 153 percent, and social networking 43 percent.

Outsell also reported that digital marketing expenditures by all U.S. advertisers will surpass those of print for the first time this year, calling it “an industry milestone crossover event.”Print spending is expected to fall 3.2 percent, while online spending will grow almost 10 percent.

However, Richard cautioned, “Print is not on its way out; it’s sort of reaching a new equilibrium.” Key to this is his belief that marketers are “getting smarter, more mature, and understanding how the different media affect one another.”

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