Why software development companies invest in video content: the US marketing research

With piking software development needs in literally every sphere of life, the technology partakes improvements in the usual processes, enhancing the level of provided services. The software companies fight over wielding unique software architectures, employing cutting-edge software development tools and top-notch technologies in order to make their customers happy.
Even though the industry has been majorly affected by the COVID-19 pandemic, the market is still adjusting to its’ precedence. 

This article provides a current software development market review. It overviews marketing budget numbers in the US; overview of software marketing trends; a forecast for 2022 marketing budget expectations. As experts in visual content production, we share insights on which aspects are worth investing in and why to boost software development sales numbers. We illuminate how to grow their client base by rocketing engagement to the website, lead generation and better informing potential customers. 

See a brief summary of the article in our video.

Software development market research

Even though software development products continue to evolve rapidly based on scalable methodologies and enhanced functioning and security of the software produced, one could have observed some fluctuations in numbers on the market. With COVID-19 in the arena, the global service market has slightly declined due to negative economic trends in the US, especially in the software development area. 


In 2020, global revenue for enterprise application software reached 209.4 billion U.S. dollars. Comparing the results with 2019 numbers, the experts state that the 2,2% decline is inflicted by the coronavirus (COVID-19) pandemic.

Market growth

It is a great time to invest in the software development industry, states McKinley. Even though it is a sphere that fluctuates and is extensively subjected to changes, it constantly evolves:

  • According to the research, the AI market may see some extensive growth in less than 4  years.
  • With spending $57 billion in 2021 on AI systems we expect it to grow into a $190 billion industry by 2025.
  • With the popularity of the Internet of Things (IoT), Statista forecasts $1.1 trillion global spending in 2022, therefore allowing the edge computing market to reach $6.72 billion by 2022.

Market value

Outsourcing IT services is not a novelty in the contemporary world. However, with the manifestation of coronavirus (COVID-19) pandemic outsourcing software development for companies has been extensively growing as a market trend. At the moment being, IT outsourcing for startups, medium to large businesses and enterprises expands in value day by day. Statista reports that the IT services value delegated to external contractors will surpass $413.72 billion by the end of 2021. To compare, in 2020, the global market for IT outsourcing was estimated at $342.9 billion. 

What are the reasons why IT service outsourcing rockets so quickly?

Cost reduction

According to a Deloitte survey, the top reason for outsourcing (70%) is cost reduction. Outsourcing to non-US companies can save the cost of software solutions production without quality loss. In the past, some businesses used to seek help from India due to a growing number of qualified IT-specialists and fairly low hourly rates. As for now, the European market shows growing potential for software development services such as planning and requirement analysis, software design and implementation, testing, deployment, as well as supporting and maintaining the final product. To compare, in Ukraine the salary of a developer may range between $800 to $4000. Qubit labs report that Ukrainian market growth rate is 26%. Currently there are over 4000 tech companies, 1600 SaaS companies, and a pool of over 185 000 software developers in Ukraine and growing.

Workplace adjustments: remote, freelance   

Allowing employees to work remotely during pandemic was a smart decision for businesses that wished to sustain their revenue and yet keep the people safe. As this experience has shown, remote work is a great idea in so many different ways, including allowing employees to balance off their life and provide high work performance. Here’s some data related to remote work patterns:

  • Following this trend, 80% of the companies are planning to continue allowing full-time remote work until the end of the pandemic and 47% even after it, Gartner survey reports. 
  • PwC survey claims that 78% of respondent CEOs have agreed on long-term remote collaboration.
  • FlexJobs’ survey states that 95% of respondents feel more productive while working from home, and 51% report that remote work helped them to be more productive.


Business Automation is thriving at the pace of innovation across all sectors globally.
With time the industry will only continue to grow and become more diversified with every upcoming year. As the software industry is a highly competitive industry that impacts every sector of our lives, it is only gaining momentum. Investment in developing software solutions is not only a thriving global need, but with the right approach to marketing may become a gold mine. Let’s analyze how software development companies allocate their budget to marketing needs. 

Software development budget allocation on marketing in 2021

Past software development marketing budget allocation reports

The leaders planned to spend 26% of their budget on marketing technology according to the 2019 Gartner study in 2020 (down from 29% in 2019), focusing on email marketing, web content creation and marketing analytics. Forrester Research and eMarketer showed that the priority was to fund online digital channels. According to the February 2020 CMO survey there was a 7,6% expectation of marketing budget growth. Affected by COVID pandemic, the marketing expense in software development was expected to drop down slightly and continue to exponentially grow. In June 2020 the numbers whopped to 11.4%. Meanwhile, B2C companies spent 11,9% of revenue on marketing, and B2B service companies allocated only 4.8% of their revenue.
Working off the situation with the rainy cloud imposed by the effects of the pandemic, companies focused on maintaining brand awareness and retaining customers even after the revenues dropped. Below is WebStrategies graph depicting software development companies budget allocation in 2021.  

Budget allocation estimates in 2021

  • In February 2019 eMarketer survey estimated a 62,3% budget allocation on digital ad in 2021, increasing to 66,8% by 2023.
  • In 2021, the half of the marketing budget was to prioritise online presence
  • Due to search engine needs, the largest share should be invested in the online display (banner ads, online video, etc.) 
  • The highest growth will be taken by online video doubling the investment numbers of 2016 by 2021
  • Due to the previous fact, digital marketing will rush 11% annual growth rate 
  • 17% compound annual growth rate will be dedicated to social media advertising investments. The overall average expense will use 13% of total marketing budget, marking the second-highest point in their survey history.
  • By 2021 46% of advertising will be partaken by paid search, display advertising, social media advertising, online video advertising and email marketing 

Below is a 2017 survey report of 2500 digital marketers reporting on what marketing activities generated the best ROI. Current trends are similar.

Marketing software development trends

For the last 5 years the companies choose to invest in traditional advertising by single digit percentages less each year. Following the 2019 data report, Facebook, Youtube and Instagram still have the leading positions among the social media channels worth investing in. 

The chart below from eMarketer projects the following for 2021:


By 2021, digital spend will more than double television spending. Software development companies should primarily focus on heavy investment in digital marketing, otherwise missing opportunities for visibility for prospects and customers. The latest Forrester Research projects that digital marketing spending will make up 46% of all ad spend in 2021.

Marketing expenses: Marketing budgets by business size

Business size            Percent of revenue to spend on marketing
Small business                         7-8%

Mid-sized business                   10%

Enterprise business                  15%


This works for the companies in all business models. Nonetheless, the data shows that B2B companies tend to transition to a digital model slower, which is also the reason for their slower development.

To conclude the above mentioned:

  1. Despite dropping numbers in revenue, the marketing budgets are increasing
  2. Traditional advertising channels loose their actuality, therefore companies spend more on digital
  3. Companies spend 5-12% of their revenue of their total marketing budgets on marketing
  4. B2Cs generally spend more on marketing compared to B2Bs
  5. Smaller companies spend more on marketing as a percentage of their total revenue
  6. The highest priorities of marketing budget are on search and display marketing 

Content marketing strategies

Marketing ABCs for Software Development Companies in 2021

There are a range of different marketing strategies for software development companies to hi-jack their sales. Nonetheless, the latest market trend research recommends focusing on content marketing. Invest into at least of these 5 content marketing strategies for software companies to increase engagement, revenue,and as a result bump up the number of sales:

 Work on software development company visual image

  • Ensure clarity and understanding of your IT company concept through engaging company animated video. It might be clear what kind of company you work for, or what type of product you produce for you. Nonetheless, start off by explaining it to a stranger and you might lack words. If you can’t find a way to explain your business in less than 20 words, you might want to seek help. Individuals wouldn’t understand why they have to buy your services, if they don’t know how you can help them. Having at your disposal an explainer video for startup companies, or animated whiteboard video for a large corporation is a great tool to illuminate the crucial benefits of your A-game in a concise format.

  • Increase lead conversion by means of showing the benefits of your services or products in an engaging explainer product video. It is one thing to own a great company, which creates a fantastic product. It is completely different to be able to pitch about all it’s capabilities. Explainer videos are very effective ways to sell a product or explain a service. As a matter of fact, based on our case study for Jivochat a product explainer videos for SaaS companies can increase conversion by up to 15%. Product explainer videos are short animated cartoons that are specifically designed to elaborate on the benefits of your product. You can check other examples of SaaS explainer videos by XPLAI  and other explainer videos on Behance
  • Use social media to tell your story to enhance your social media presence. It’s not enough to have a great product. You need to make sure everyone knows about it. Going social today means everything for the business. If you are not online you don’t exist. There are so many different IT companies on the global market today, and the need is growing exponentially. However, being clear about what a company does specifically can cost you millions of dollars and wasted valuable time. Work extensively on your social media. Letting people know about your industry does not only show expertise and professionalism, but can also serve as an advantage in front of your competitors. Who would you rather choose to perform services from: a company that does everything you tell them to do, but at the end of the day does not change the statistics, or a company that can evaluate your situation and consult you based on your situation specifically? Make sure you get known by your existing and potential customers by sharing your work stories, rather than stating blunt data in a text format in your About page. Visual support, such a quick explainer video, or an animated demo cartoon could be a great addition to your social media content, especially if it briefly lays out a complicated business model into a 30 second engaging cartoon that is easy to understand.
  • Show your expertise. Reflect your activity not only as a contractor, but also as an expert. Engage your potential customers by uniquely generated educational content. Another way of getting a bit more stardust is by engaging with other field experts. The next level of proving credibility is sharing expertise. Collaboration with other professionals helps mutual social media exposure and widens your social circle. Additionally, it also helps to gain some insights and new approaches from other field experts, and refresh your own model. Invite special guests to your podcasts, or get featured in someone else’s vlogs. Getting listed in information exchange resources that increase your exposure. Engage with Capterra, or G2 for a placement in the online marketplace vendor serving as an intermediary between buyers and technology vendors within the software industry based on user reviews and research, user ratings and social data.
  • Optimize your user experience.  Start by checking how well your website represents your company values. Is everything clear and easy to find? Make sure you are seen as an expert that can advise on the best solution for the customer. Ensure you are bringing leads in through some engaging content like useful or educational material, short explainers and demos, professional vlog. Intuitive navigation and user-friendly interface add up to your website optimization. Popularize your website through SEO techniques. Increase your chances of gaining new clients by using engaging explainer videos as material for marketing ads that increase lead conversion up to 40%. Adaptability is a necessary skill for business. In his book Antifragile, Nassim Taleb claims that flexibility in resolving conflict situations is the best risk management technique. It only could be achieved when one analyzes past activity, its dynamics, statistics, and sees clearly the trajectory of the movement in order to understand which different types of strategies could be incorporated. It might be hard to do it on your own, because trends change so fast that newer and newer strategies need to be applied. Use analytics software to track your performance. Website analytics software like Google Analytics is a must-have. Such tools can track and measure your return on investment (ROI). Additionally you can track the activity on all your channels with MarketingCloudFX. Research shows that most activity is based around video content marketing, therefore investing in it is crucial.


Reasons Why Video Content Marketing is Essential

What is Video Content Marketing?

Video marketing is a form of content marketing that is gaining importance. According to Demand Metric, 83% of marketers believe that video is now more important than ever.

Videos are a Perfect Way to Explain About Product

Video content can be a valuable tool in helping potential buyers learn more about a product. WYZOwl reports that 94% of marketers believe video content can help increase understanding of products or services.

Videos Have a Good Return on Investment

Measuring return on investment helps to designate the company areas that need more funding. According to the research video content brings in the most ROI in comparison to the rest of the video marketing content.

Videos bring great engagement

From XPLAI animation studio experience, in 80% cases companies prefer 2D character animation even if their story is about a product. 2D animation for software development companies raises 75% more interest in viewers due to storytelling techniques applied in the script. 40% of viewers tend to pursue the purchase or a service or product based on their first exposure to a character explainer video.  

Videos are Great for SEO

Invideo wrote, “By 2022, online videos will make up more than 82% of all consumer internet traffic — 15 times higher than it was in 2017”. Online video content is watched by 85% of US users daily. Employing video content such as explainer videos is helping to boost SEO numbers, brings engagement and converts potential leads into new customers. 


Our goal as experts in animated marketing videos is to provide insightful data for software development companies to make the right choices when budgeting. This marketing research underlies the importance of investing into video content marketing based on the fact that 85% of the US professionals watch online content.    

Check out how XPLAI creates visual content production for companies that develop specialized system and application software products. Our primary goal is to help companies grow by telling their story right.