AR rises to 28% of PR spend

According to BtoBOnline, IDC has found that spending on analyst relations has risen to 28% of the spending on public relations by technology suppliers.

The report by Kate Maddox (ex-@d:tech and Advertising Age) summarises IDC’s conference call on Thursday which announced the findings of its 2006 benchmarking survey with senior tech marketers. Vendors’ spending on marketing is now growing at 7.5% annually; that is the highest growth gate in four years. The results are especially interesting because IDC’s research seems to contradict similar research from Blackfriars, who feel that marketing spend is at a two year low.

Maddox writes that CMOs allocate “21.0% of their marketing program budget to advertising; 19.3% to events; 17.3% to marketing support and sales tools; 14.7% to direct marketing; 7.1% to PR; 5.6% to collateral; 5.0% to the Web; 4.2% to research; 2.0% to analyst relations; and 3.7% to other activities.” That makes the spending on AR equal to 28.2% of the spending on public relations: the folk at Blackfriars might not disagree with that ratio, even if they do they think the pie is getting smaller.

I did some similar research in 2000 and 2002, when I compared the PR and AR spending of my clients. Back then, AR spending was just under 20% of PR spending. However, those firms probably had above-average commitment to analyst relations.

Over the last few years, spending on both PR and AR has risen, largely at the expence of advertising. That makes the rise in AR even more remarkable: the communications budget has grown, but AR has grown even more quickly.

This is certainly reflected in our AR benchmarking surveys of analysts. The effort expanded on AR has continued to rise, and analysts are the first people to experience the impact of those growing resources. That means that analysts’ expectations are rising, as we discussed back in March. With other things remaining equal, that means firms need to put more effort into AR to simply hold their current position.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As the head of CCgroup's analyst relations team, Chapple directs programs that increase the value of relationships with industry analysts and sourcing advisors.