Marketing, the industry and the downturn
Introduction
This independent research was done by Construction News, using Lychgate Projects – respondents taking part on telephone interviews were not told the research was being done by Construction News until the end. They were chosen at random by Lychgate.
I believe the main points are that
*marketing spend is coming under pressure this year but most companies are optimistic about next year
*some companies are changing focus to a more immediate on provable value and lead generation
*there is more interest in digital marketing
*trade journals (and their websites) will have to work harder to prove their value and this will favour market leaders with strong products across paper, digital and events
Nick Edwards
Objectives and challenges when marketing to contractors
When marketing to contractors, across all target advertiser groups, the main objective in the last 12 months has been to increase brand and company awareness and generate sales leads.
These objectives are not expected to change in the coming 2 or 3 years according to 72%.
When adjusted to allow for those who do expect change, sales lead generation will become
more important.
Budgets and trends in marketing to contractors
Construction industry marketing budgets vary with 53% under £100,000 and 47% above
£100,000). Construction products / material manufacturers and marketing agencies have the largest budgets with 38% and 34% respectively of their budgets over £200,000.
Companies are on the whole pessimistic about marketing budgets for the rest of this year with a net 19% of companies expecting a fall in budgets this year. They are however more optimistic
about next year with a net 5% of companies expecting an increase in budgets. The overall
effect is a 4.5% drop in marketing spend this year and an anticipated 0% change in spend next
year. Construction material companies are more pessimistic about next year with a net of 12%
of companies expecting a fall in budgets.
Current marketing methods for contractors
Internet marketing has been heavily used in the last 12 months (by over nine in ten), and of all
methods is considered to give the best return on investment. Use of websites and emailing is
the main internet marketing activity.
Trade journal advertising in hard copy or online has been used by almost all interviewed (85%)
in the last 12 months, and is used as the main method by 24%.
The greatest users of trade journal advertising in the last 12 months have been Plant, hire and
equipment companies, construction products and materials, commercial vehicles manufacturers and marketing agencies, with at least 90% using trade journals. Law companies and IT and communications companies have been the lowest users (but these target Contractors).
Trends in methods used
A net figure of 72% of companies expect use of internet or electronic marketing to increase over the next 2 years, while a net of 15% expect to reduce use of adverts (hard copy or online) in the trade press. Trade journals are likely to suffer a greater fall in net use than any other marketing. In terms of actual spend, revenue could decline by about 10% next year, based on
respondents who were able to give a % change in trade journal spend.
Amongst those expecting to use internet marketing more, most of this will be improving their
own web site. 23% expect to use more e-mail campaigns, 10% e-newsletters and 9% more e-
advertising.
Awareness and use of trade journals
Construction News is the best known and most used publication with 72% recalling it
unprompted as a journal targeting contractors. 52% have advertised in Construction News in
the last 12 months. Contract Journal and Building are also well known and used but to a lesser
extent (37% and 27% used for adverts respectively).
The key driver in selecting a journal to advertise in is the quality of the readership in terms of
matching the advertisers’ target audience. Unprompted, 42% felt this was most important,
increasing to 76% after prompting.
Over nine in ten are targeting main contractors and most consider Construction News is the
best publication for this. It is also seen as the best for targeting sub contractors. Other targets
include Civil Contractors and Housebuilders.
Construction News is seen as particularly strong in effectively reaching customers with an
average of 7.3 compared to Building’s 6.6 and Contract Journal’s 6.7.
Awareness and use of other paid for promotional services
There is high awareness of most services (other than hard copy) available from publishing
companies, but low usage with 61% using paid for advertising only.
Greatest interest was shown in networking events (59% very or fairly interested), and digital
editions (53%). 40-50% would also be interested in most other services such as sponsorship of
web sites and e-mail news alerts.
Two-thirds are interested in the regional targeting of contractors.
NOTE: This information is copyright Construction News and may be used for internal purposes only