Study: Tech Start-Ups Cut Marketing Budgets

Funding for marketing resources and activities at hi-tech start-ups is decreasing far more than for other departments, according to the annual technology marketing study released yesterday by Launch Pad, a San Francisco high-tech marketing consulting firm.

The study, “Marketing Expenditures for Technology Start-Ups,” interviewed more than 30 hi-tech start-ups in the United States and Canada. Blanc & Otus, a high-tech communications company, also worked on the study.

The study found that marketing spending fell from $2.8 million in 2001 to just over $1 million in 2002, and declined from 20 percent of corporate expenditures in 2000 to 13 percent in 2001. Engineering, in comparison, increased its percentage of corporate expenditure from 29 percent in 2000 to more than 50 percent in 2002.

The report showed that public relations continues to get the largest share of overall marketing expenditure, rising from 19 percent to 25 percent over the past year. It's also seen as the most effective marketing tactic for start-ups. Outbound lead-generating telemarketing saw the largest absolute dollar increase compared with budgets in 2001.

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