2014

Research & Analysis by David Newcorn, VP/Digital, PMMI Media Group

BRANDING/MARKETING S U P P L I E R B E N C H M A R K S T U D Y

P A C K A G I N G

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 2

In a first-of-its-kind study, Packaging World and Healthcare Packaging surveyed more than 200 packaging suppliers to assess advertis-ing and marketing benchmarks. This study is

the first broad-based research of its kind that measures how, where, and how much pack-aging suppliers invest to build awareness for their products and brands.

Introduction

BRAND AWARENESS BUILDING BENCHMARKADVERTISING CHANNELS CURRENTLY UTILIZED

CONTENT MARKETING

E-MAIL BLASTS TO OWN LIST

DIRECT MAIL GOOGLE PAY-PER-CLICK

TRADE MAGAZINES (PRINT)

TRADE MEDIA WEBSITES/

EMAIL ONLINE

DIRECTORIES DON’T

ADVERTISE OTHER

MACHINERY BUILDERS MATERIALS SUPPLIERS

72% 40% 60% 43% 58% 29% 58% 26% 34% 16% 30% 26% 10% 27% 16% 15% 9% 11%

INVESTMENTS IN BRANDING VARY WIDELY FOR MACHINERY VERSUS MATERIALS COMPANIES, a fact that packaging magazine publishers have known for years! “Other” responses consisted mainly of trade shows, which some professionals consider a lead generation rather than branding strategy. Other answers included social media and face time with sales people, which could be considered a sales – not branding – strategy. Content marketing was defined as white papers, videos, webinars, etc. Online directories were defined as Global Spec, Thomas Register, etc.

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 3

SOURCES OF INFORMATION

RELIED UPON DURING STAGE 1

PEERS & COLLEAGUES

TRADE MAGAZINES

INDUSTRY OR PROFESSIONAL ASSOCIATIONS

SUPPLIER SALES PEOPLE

SOCIAL MEDIA

TRADE SHOWS LIKE PACK EXPO

TRADE MEDIA WEB SITES &

NEWSLETTERSSEARCH ENGINES

SUPPLIER WEB SITES YOUTUBE

32% 27% 22%37%41%44%49%54%56%68%

* Multiple responses permitted

USE OUTSIDE AD OR MARKETING AGENCY

PRINTED TRADE MAGAZINES remain the top source of information year-round for packaging professionals in Stage 1 of the buying cycle. And trademagazine Web site and e-newsletters is the top online source of digital informa-tion that packaging professionals rely on in Stage 1.

72%NO

YES28%

ALTHOUGH IT MAY SEEM THAT PACKAGING SUPPLIERS GO IT ALONE when it comes to the question of whether to rely on an ad or marketing agency, the numbers tell a different story when broken down by company size. Large compa-nies, defined as suppliers with revenues of $50 million or more, rely on agencies 46% of the time. In contrast, only 17% of suppliers with revenues below $50 million rely on agencies.

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 4

TOTAL MARKETING INVESTMENTAS A PERCENTAGE OF REVENUES

DIGITAL MARKETING BUDGETAS A PERCENTAGE OF COMPANY REVENUE

0.5% TO LESS THAN 1%

1% TO LESS THAN 2%

MORE THAN 2% LESS THAN 0.5%

MACHINERY BUILDERS MATERIALS SUPPLIERS

16% 45% 28% 29% 29% 18% 27% 9%

45%

MANUFACTURING

HEALTHCARE

MEDIA

RETAIL

HIGH-TECH

FINANCIAL SERVICES/INSURANCE

2.4%2.3%2.8%3.9%2.2% 2.5%

Source: Gartner U.S. Digital Marketing Spending Survey 2013

PACKAGING MACHINERY AND MATERIALS SUPPLI-ERS UNDER-INVEST IN MARKETING relative to other industries. According to a Gartner survey of 254 marketers from U.S. based companies with more than $500 million in annual revenues (admittedly skewed toward larger company sizes than is typical for packaging suppliers), non-packaging companies spent an average of 2.5% of revenues on digital marketing alone. By contrast, 83% of packaging suppliers spend less than 2% on all market-ing including trade shows and advertis-ing. An even sharper contrast is apparent when comparing machinery vs. materi-als suppliers—83% of machinery suppliers spend more than 0.5% of revenues on marketing, but only 56% of materials sup-pliers do.

Source: Gartner U.S. Digital Marketing Spending Survey 2013

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 5

➤ Only half of respondents invest in trade media, despite the fact that printed trade magazines continue to lead as the preferred information source in Stage 1 of the buying cycle, where 46% of end users are most open to learning about new suppliers.

➤ Email blasts to internal lists is cited as a branding strategy by many respondents. While it’s critical to continue to brand your company (and nurture leads) to prospects, internal list communication is more of a lead nurturing than branding strategy. It’s no substitute for casting a wider net to people who aren’t yet familiar with your company. Branding creates an awareness and positive impression with

professionals that don’t know your company. Suppliers should be doing both activities—branding to new contacts as well as nurturing existing ones.

➤ Search engines rank as a distant second to trade magazines and trade media websites and e-newsletters as a source of information that end users rely on in Stage 1 of the buying cycle. A search engine optimization (SEO) strategy is mandatory, but the return on investment for pay-per-click advertising has yet to be demonstrated. Only 15% of the packaging supplier community continues to invest in Google pay-per-click advertising.

Conclusions

➤ Re-examine your total marketing investment in light of changes at your company over time. If you’ve grown through acquisition and are marketing several brands but the marketing budget hasn’t changed, you are short-changing each individual brand or product line. Alternatively, if you’ve grown organically over the years by a significant amount but your marketing budget has remained the same, you are steadily decreasing your investment as a percentage of revenues over time.

In both cases, your branding efforts have become underpowered through inertia.

➤ Assess the importance of new business. If you can sustain your operation largely through repeat business, then your marketing budget may not need to be re-examined. But to the extent that your company expects to grow – or even survive – on revenue generated by an increasing number of new customers, your marketing budget and allocation may not be sufficient or properly allocated to support that goal.

What to do next

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 6

➤ If you are fighting outdated perceptions of your company in the marketplace, you may need to consider a three-to five-year rebranding strategy to reintroduce your company and its capabilities.

➤ To transform a company from a regional to a national or international player requires a comprehensive marketing strategy and a commensurate increase in investment levels for branding sustained over at least a three-year period.

➤ If your total marketing budget is less than 0.5%, it’s time to re-consider your marketing spend, as you’re lagging more aggressive competitors, not to mention other industries.

➤ Create an annual audit process to assess your total marketing spend, and how it supports your branding and lead generation needs, in light of the above variables. Over time, budgets can fail to mirror goals, due to forces of inertia. Pay particular attention to branding your company to new prospects in Stage 1, the widest part of the buying process.

What to do next (continued)

Want to learn more?With a deep knowledge of the packaging marketplace, Packaging World and Healthcare Packaging have the expertise to assist in marketing your machinery or materials to the largest available universe of packaging buyers. Whether your focus is on branding, content marketing or lead-generation, we can offer a program tailored to your budget and objectives. Our content creation team offers professional white papers, videos, 360° panoramic product photography and other custom products. Our propriety lead-management software allows real-time monitoring of campaigns, lead-delivery, and lead nurturing. If you think of B2B media as simply print magazines, it’s time to take a closer look! Learn more at PMMIMediaGroup.com.

PACKAGING BRANDING/MARKETING

SUPPLIER BENCHMARK STUDY | PAGE 7

➤ 568 respondents to the end-user survey (suppliers filtered out)

➤ Industries: 41% food & beverage • 25% healthcare • 18% CPG 16% other

➤ Buying power: 88% have bought machinery or materials in the last 12 months

➤ Age: 38% are 45 or younger • 62% are older than 45

➤ Gender: 79% male • 21% female

➤ Job duties: 24% operations • 12% machinery eng. • 21% pkg dev. eng. 13% marketing • 8% procurement • 5% supply chain • 17% other

➤ Company size:41% have 249 or fewer employees • 17% have 250 – 999 employees • 41% have 1000+ or more employees

➤ Surveys were conducted Dec. 2013 – Jan. 2014 via e-mail to the Packaging World and Healthcare Packaging e-mail database.

Methodology➤ Two separate surveys were conducted:

one to packaging end users, the other to packaging suppliers.

➤ Non-manufacturers filtered out of results (e.g., packaging distributors, design firms, branding agencies, consultants, etc.)

End user survey

Packaging supplier survey

➤ 223 respondents to the supplier survey

➤ 101 machine builders

➤ 119 materials suppliers, comprising 84 converters, molders, thermoformers, or package manufacturers and 35 raw materials suppliers (resin, film, board, etc.)

➤ Geographic distribution: 58% U.S. or Canada • 18% Europe • 13% Asia/Pacific • 6% Latin America • 5% Middle East & Africa

➤ Company size in annual revenues: 24% less than $5M (million) • 19% $5M to $15M • 24% $15M to $50M • 21% $50M to $250M • 12% More than $250M

PACKAGING BRANDING/MARKETING

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Other studies in this series

Packaging Buying Cycle Study

Packaging Buying Pain Points Study

Packaging Content Marketing Supplier Benchmark Study

Packaging Branding/Marketing Supplier Benchmark Study

Packaging Lead Generation/Lead Nurturing Supplier

Benchmark Study

Packaging End User Trends and Drivers Study

Download from pwgo.to/buy-cycle