Marketers are relatively upbeat about the economy and growth prospects over the next 12 months or so. That’s according to the newest edition of The CMO Survey, a semiannual study spawned out of Duke University’s business school.
It’s a survey I’ve followed for several years as I usually find the benchmarks, particularly around marketing budgets, useful. This latest survey polled 362 senior marketers and I’ve culled through the 95-page report to review the data from B2B product segment and the technology vertical, which are the markets I serve. Here are five points I think are relevant for B2B marketing leaders.
1) Marketers anticipate budget growth
Marketers from B2B product companies say their budgets grew 6.2% over the last 12 months. Over the course of the next year, they anticipate this budget growing by 9.3%. Compared to the overall survey, this growth was slower in the last year (7.1%) but may grow slightly faster in the next 12 months (8.9%). In the technology vertical, budget growth is expected to grow even more – to 12.4% over the next year.
As a percentage of budget, B2B product companies allocate 9.2% to marketing, compared with 11% overall. As a percentage of revenue, B2B product organizations invest 6.3% of revenue in marketing, compared with 7.9% overall. As a vertical, technology companies invest 9.7% of revenue in marketing.
Comment: These are decent benchmarks for a CMO to wrangle with the CFO over budget. It’s not impossible to compete on a smaller budget, but it introduces one more challenge. On the flip side, pressure for short-term results rises with budget increases. It’s politically savvy to budget for some quick wins, but don’t blow it all on short-term tactics that deluge your SDRs with fruitless chases. Be sure to invest in strategic programs and marketing motions that are consistent, sustainable and build compounding returns.
2) Social media spending high and rising
B2B marketers say they spend 9.3% of the marketing budget on social media and expect to see this grow to 17.6% over the next five years. This is slightly lower than the overall survey response, where marketers say they spend 12% of budget on social media and expect it to increase to 20.5% over the next five years.
About 20% of the social media activity is being outsourced to agencies. Brand awareness accounts for about half of that activity (45.6%), followed by customer acquisition (32.6%) and brand promotions such as contests (29%). When asked, “To what degree does the use of social media contribute to your company’s performance?” respondents give social media a score of 3.3 on a scale of 1 to 7 where lower is better.
Comment: That social media spending is rising has been a consistent theme in this survey for many years. However, the platforms have changed as organic distribution has all but eroded in support of platform advertising models.
As a critical thinker, I have a hard time reconciling how businesses can pour this amount of spend into social media. I imagine much of it is for tactical, one-off campaigns. If spending is indeed this high, I hope marketers are investing equally in strategic purposes and long-term programs such as audience building and subscribers to your content marketing platform.
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3) Marketers see mobile spending grow
B2B marketers say they spend 5.6% of budget on mobile and see it growing to 11.8% over the next three years. In terms of the overall survey, the results tally at 7% of budget with expected growth of 11.8% over the next three years.
Comment: Mobile strikes me as a trend that isn’t any longer. Mobility is a foundational component as there is a mobile thread in nearly everything marketing does. Mobile computing devices have become so ubiquitous and powerful that the distinction between mobile and desktop may be hard to identify in the not-so-distant future.
In the near-term, marketers should consider mobile viewers as a targeting option. For example, if you are promoting content on a Twitter hashtag around a conference, set up an A/B test for mobile and desktop traffic. Chances are most of your audience will be mobile, but the desktop could be very dedicated and more economical.
In the long term, mobile has to be part of the marketing discussion earlier in the conversation. For example, if you are a B2B enterprise software provider, your mobile applications should have customer communication components baked in from the start rather than bolted on in a crisis.
The litmus test is this: if you were tasked with communicating in-app to existing customers today, how long would that take? A day? A week? Months on the development backlog? Your application – especially SaaS models – what you sell is an owned media channel in its own right.
Example: if you run iOS you’ve probably noticed that the prompt to update your apps doesn’t take you straight to the update page anymore, rather it takes you to an Apple announcement page. There’s no reason businesses can’t find a non-intrusive way to do this on the enterprise side.
4) A bigger role for marketing analytics
B2B marketers say they currently invest 6.4% of budget to marketing analytics and see that growing to 20.4% in three years. That’s higher than the results of the overall survey which came in at 5.8% today and growing to 17.3%.
When asked, “To what degree does the use of social media contribute to your company’s performance?” B2B marketers from product organizations give analytics a score of 3.7 on a scale of 1 to 7 where lower better.
Comment: The comparisons of these results around marketing analytics to social media is striking. Marketing analytics is a strategic initiative, yet it by the measure of this survey, it receives less investment and is less valued than social media, which is clearly a tactical play on the very tail end of any communication. This is exactly the point I’m making about budgets above.
5) The battle for marketing talent gets real
Hiring plans reached the highest levels recorded in this survey in six years. The percent change in new hiring among B2B product companies is 7.1% just slightly lower than for the overall survey at 7.3%.
The importance of talent can’t be overstated. In the survey section about growth, “having the right talent” was identified as the most important factor for driving future growth with 35% – in a distant second place was “having the right operating model” with 23.1%.
In terms of desirable attributes, technical skills and creativity were at the top of the list which included the following:
- Martech platform experience: 21.8%
- Creativity: 19.4%
- Natural leadership abilities: 17.1%
- Data science: 13.5%
- Curiosity: 12.9%
- Emotional intelligence: 10%
- Financial acumen: 5.3%
Comment: It’s been an employers’ market for the better part of a decade and there are many indications that has shifted. I worry businesses are unaccustomed to this environment, overreliant on technology to support human resources, and going to struggle with attracting and retaining talent for the next few years.
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The full survey is freely available for download without registration here.
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