Marketing spending has climbed to an all time high, according to Zweig Group’s 2019 Marketing Survey.
The market is hot and firms are investing in new people, new markets, and new technology. Zweig Group’s just released 2019 Marketing Survey of AEC Firms polled marketing leaders in firms of all types and sizes across the country. The bulk of survey respondents reported “slow growth” or average annual growth between 1 percent and 19 percent, and just 6 percent of the sample reported a decline in size. This steady growth is predominant in the industry and driving an investment in marketing as it relates to both recruiting and the pursuit of new projects.
The survey reports the average amount spent on marketing has climbed to an average of 6.8 percent of net service revenue – an all time high. With an average revenue of $11.6 million last year, that’s almost $794,000 spent on marketing. The bulk of marketing spending continues to be comprised of labor, with marketing labor (non-staff) at an average of nearly 50 percent and marketing staff labor comprising another 25 percent. Another area of big spending was proposals (an average of 8.4 percent). The majority of firms (48 percent) reported they expected marketing spending to increase this year, by an average of 11 percent.
Some things haven’t changed over the past decade: “direct relationships and referrals” continues to be the most successful marketing technique for AEC firms (33 percent of respondents). Big changes in other areas did occur, with firms reporting a growing influence of social media, website, networking events and public speaking, and marketing department development, all receiving between 11 percent and 14 percent of respondents reporting them as the most successful technique of the past year. Least successful strategies include “advertising” (36 percent) and “email campaigns” (16 percent).
While all this industry growth is a good thing, many firms are relying on repeat business. Maximizing relationships from existing clients is a great practice, but overreliance on this can be dangerous territory as the disruption of cash flow from just a few key clients, due to events completely out of the control of the consulting firm, could prove disastrous to an AEC firm. The average firm reported 73 percent of their work is coming from past clients. This reliance on well-established clients and overflow of work is leading to another issue – lackadaisical go/no-go processes. Just 11 percent of respondents reported they “always” follow this formal process, and 17 percent reported they rarely followed one!
More firms than ever are embracing social media – with almost all reporting the use of LinkedIn (96 percent, up from last year’s figure of 94 percent) and 84 percent on Facebook. What’s shocking is that only 45 percent of firms are on Instagram (28 percent were last year) and only 6 percent of firms are on Pinterest! With AEC firms reporting “promoting services” as the top use of social media accounts, it’s surprising that they neglect image heavy Instagram and home/structure-focused Pinterest.
Interaction is an important component of social media, and, although many firms are still not actively interacting, this is an area of improvement. This year, almost half of all firms (48 percent) reported they shared other’s content on Facebook – last year this was 42 percent. Likewise, 46 percent of firms retweeted other Twitter users, up from 38 percent last year.
LinkedIn, the favorite social media platform for the AEC industry, was the one channel on which more firms were interacting than were not, 58 percent reported they liked content shared on LinkedIn, an increase from last year’s 46 percent.
Although it may be slow, change is occurring in the AEC industry. This year’s Marketing Survey shows that tried and true methods such as word of mouth and repeat business will always be staples of the industry, but a healthy dose of caution and protocol is still advisable as we look toward the future. The AEC industry needs to balance new investments and ensure that a healthy balance of new work still comes through the door as we look toward a potential market downturn.
Christina Zweig Niehues is Zweig Group’s director of of research and e-commerce. She can be reached at email@example.com.