Marketers are more optimistic about the economy, expect marketing budgets to increase and will spend more on digital, social media and marketing analytics.
That’s according to a new survey of 288 senior marketing executives – the CMO Survey – conducted by Duke University’s Fuqua School of Business. The survey was conducted in conjunction with the American Marketing Association and McKinsey & Co; Duke has run this survey twice a year since 2008.
Economy Smiles at Marketing
The survey found 69.9% of marketers are more optimistic about the economy than they were in 2009. However, it’s worth noting, a graph of the every survey since 2009 is marked by ups and downs. AdAge explained the metric this way:
When asked to rate their optimism about the U.S. economy on a scale of 0 to 100 (with 100 being the most optimistic), CMOs gave an average rating of 70, a record high since the survey was launched in February 2009 and the optimism rating was only 48.
Marketing Budgets to Grow Digital Spend
Overall, marketing budgets are set to grow by 8.7% in the next year — a benchmark where budgets have hovered for the last few surveys. B2C services companies saw the greatest shift from 5.8% a year ago to 13.4% today.
Survey respondents said more and more of that budget will focus on digital, social media and mobile tactics in the future. The survey also underscored the dichotomy between digital media and traditional spending – where the former will increase by 14.7% and latter will drop by about 1%.
The Top 6 Forcasted Marketing Outcomes
The Duke Study was far more definitive on marketing priorities than the Salesforce State of Marketing survey, which was also published recently. Duke’s findings also indicates these priorities have been more or less consistent over the last few years. These priorities include:
- Increase customer acquisition – 78%
- Increase volume of purchases – 72%
- Cross selling of related products – 66%
- Improve customer retention – 52%
- Demand generation – 51%
- Price increases – 34%
One interesting shift is in customer retention. In 2009, customer retention was the top priority with just 37% percent of the vote. Businesses usually struggle with marketing in a recession, cutting spending when really, it’s their chance to buy low. In my mind, this survey finding suggests marketers are switching gears from defense – retaining and earning more sales from existing customers – to an offense.
Spending on customer relationship management (CRM) will rise to 7.5% from 5.1% a year ago. Given the expectations to spend more on social media, it’s a good time for marketing organization to consider tackling the complicated problem of social CRM.
Social Media Marketing Gets a Boost
Social media investments are expected to grow from a current 9.9% to 22.4% in next five years. It’s significant that marketers believe one-fifth of their overall marketing spend will center on social media, though the study does not distinguish between organic efforts and paid social media efforts. It is almost assured, that the majority of that spend will center on paid social media – the future of social media is a path paved in payment.
Across segments – B2B and B2C (including product and services) – social media are seemingly well integrated into marketing activities. About 60% expressed confidence in social media and marketing integration.
Social media integration is not all unicorns and rainbows however, as Christine Moorman, a professor at the Durham, NC-based Fuqua School of Business, told the Triangle Business Journal’s Jason deBruyn:
Integrating social media activities with the rest of the company’s marketing strategy also remains a challenge, with no improvement in this rating over time.
Ms. Moorman directed the research.
Respondents also said just 18.9% of social media activities are conducted through outside agencies. As in the point above, I’d suspect the bulk of that, flows to agencies focused on social media advertising buys. Facebook for example, has little organic value and is probably best treated like a traditional advertising purchase.
What goes unsaid, is that social media advertising will add to the demands for content from marketing organizations.
Finally Warming up to Mobile
The perennial “year of mobile” seems to be gaining traction. Mobile marketing spending will grow to 9% in the next five years, or about triple what marketers are currently spending.
Though the survey makes no mention of where specifically in mobile that spending will flow, it’s a safe bet to focus on responsive design. Google for example, is beginning to penalize sites that are not mobile friendly.
Those marketing organizations that invest in social media advertising, should also experiment with mobile-only ads. For now, these ads, on Twitter and Facebook, tend to be less expensive and are more apt to catch the intended audience on “in-between time.” Trade show conferences are a good example – attendees walk the floor with a mobile device rather than sitting down with desktops or laptop style devices.
CEOs Press for Marketing ROI
The Duke study found that marketers also say their efforts earned 3.1% ROI this past year and aim to boost the return to 5.1%. The majority, 61% said they feel pressure from the CEO or board to prove ROI.
This pressure may in part explain another area of spending where marketing plans to bulk up: marketing analytics. Survey takers said they expect their investment in marketing analytics to rise to 11.7% up from the 6.4% they spend today.
Ms. Moorman told AdWeek:
We observe that companies under-utilize the marketing analytics that they’ve requested and have available for decision making. It’s clear that using marketing analytics remains a distinct challenge for companies—beyond the production of these sophisticated data.
The Media Post also noted the caveats with marketing analytics – mainly marketers have to get better at using them:
And yet for all the money invested and apparent enthusiasm for leveraging marketing analytics, the same group of marketers reports an actual decline in analytics’ use. While 37% of projects used available tools or requested marketing analytics in February of 2012, that number declined to 30.4% last year, and is now down to 29% this year. To be sure, the use of analytics is strongest among consumer-facing projects (46.9%) than it is in B2B (24.9%).
Shift in Responsibility for Core Marketing Activities?
A perusal of the study, which is embedded nearby, provides additional points of interest. For example the study found that the percent of companies where marketing leads core activities such as advertising, positioning and brand are down! There is no indication of which business functions are taking responsibility for the overall brand. It seems to me for the minority of marketing organizations where this has happened, it’s a clear vote of no confidence.
Sales and Marketing Find Equal Footing
Some 69% said sales and marketing are working together on an equal level. Historical quibbles such as what constitutes a qualified lead bore no mention. Yet we know the alignment between sales and marketing is more important than ever. Research is demonstrating a shift in the buyer’s journey where customers have all but made up their minds about a purchasing decision before taking a final step of engaging sales.
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When asked, “Which company across all industries sets the standard for excellence in marketing?” respondents named Apple. It’s a likely candidate, one I’d argue is an example of a user-experience driven company, but it’s hardly a model for social media marketing, which according to this survey, is where marketers are increasingly headed.
When asked, “Which company in your industry sets the standard for excelled in marketing?’ respondents named, Nike, Amazon, P&G (which is about to sell off 100 brands), GE, Google and Geico. Personally, I’m a little weary of the ubiquitous Geico commercials, but the company certainly deserves recognition for staying on message – they’ve even got Warren Buffet making the pitch.
The report says the survey was emailed to 2,630 marketers at Fortune 100 and Forbes Top 200 companies, in addition to some AMA members and “Duke Alumni and friends.” The response rate was 10.9%.
Image credits: The CMO Survey, Christine Moorman, SlideShare
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