If your marketing budget grew by 5% or more in the next year, how would you invest that money?
I like to ask that kind question because it’s an interesting mental exercise that really makes marketing think about what they want to achieve. Moreover, three recent surveys of CMOs suggests it has a practical application too since marketing budgets, which on the whole have risen over the last few years, will continue to grow.
Here are the cliff notes to each of those three surveys.
1) Budgets Still Growing; CMOs Worry About Talent
The latest survey of survey of 324 CMOs and senior marketers our of Duke shows marketing shops are still poised for growth in terms of budget and headcount. I’ve watched this bi-annual survey closely for the last several years and though little changed in the last six months or so, there were a few points that stood out for me:
- Overall marketing spend came in at 7.3% of company revenues. This is down slightly, but macro trends across the economy suggest corporate revenues are up. In other words, the budgets may be a smaller slice of a bigger pie, which means more net new money.
- Marketers said their budgets grew 7.5% in the last 12 months and expect budgets to grow another 7.5%. This too is slower growth, but here again, I’d suggest context is important: most marketers would gladly accept slower growth of bigger budgets. The survey hasn’t reported growth of less than 5% since late 2015.
- Marketing shops plan to expand marketing hiring by 6.4% in the next year. This number has not changed compared to the same period last year (though it is down modestly sequentially). However, the unemployment rate has dropped, which means hiring that 6.4% is probably going to cost more. It’s important too since “having the right talent” (34%) was the top factor senior marketers cited for driving organic growth. Interestingly, the top three “skills” marketing leaders look for in new hires are:
a) creativity – 25%;
b) natural leadership ability – 21%; and
c) marketing technology (martech) platform experience – 18%.
The full report in PDF format is available without registration: The CMO Survey Highlights and Insights August 2018.
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2) Spending Changes and Long-Term Focus
Digital marketing giant Dentsu Aegis surveyed 1,000 senior marketers and also found “Most CMOs expect their budgets to increase over the next 12 months.” However, the study says “the composition of that spend is changing.”
It’s changing because of several interrelated challenges. On one hand, competition is fierce (56%), people are increasingly intolerant of advertising (46%) and “information overload” is a genuine problem (44%).
The evolution also attributed to the fact what we consider “media” and the channels in which CMOs are willing to invest is evolving:
“The definition of media is changing and has moved beyond distribution channels alone. CMOs also choose to define it more broadly across technology (48%), content (44%), distribution channels (41%) and data (38%). Each of these provides a potential source of consumer insight and a more holistic way of using media to reset strategy.”
Short-termism may be holding marketing back. For example, most CMOs believe their drive business growth “by securing long-term consumer relationships (70%) and finding new sources of revenue (63%).”
Yet bigger budgets come with strings for immediate results:
“Nearly half of CMOs identify securing long-term investment as the biggest challenge to delivering their marketing strategy. CMOs find themselves managing competing imperatives – not least, the need to deliver short-term results while also building a long-term brand proposition. Shifting the focus back to long-term, sustainable brand health will be needed to help engage consumers and deliver consistently.”
The full report is a good read – one of the better studies I’ve seen in a while. It is available in PDF format with registration: How Brands Win in the Digital Economy: CMO Survey 2018.
3) The CMO Priorities
The IBM Institute for Business Value surveyed more than 12,000 CXO executives for a Global C-Suite Study – then it distilled answers form just 2,069 CMOs to hone in on just how the CMO role is changing.
In many ways, it shows the profound influence the customer experience (CX) is having on both the business and marketing. The study says “CMOs are facing an expanded mandate to reimagine their role” because businesses are shifting “from product-led to experience-led” orientation.
The survey asked CMOs for their top priorities over the course of the next year, and then categorized them in this order:
a) Increasing sales revenue;
b) Improving the omnichannel customer experience;
c) Reinventing customer experience through channel innovation;
d) Demonstrating the ROI of marketing initiatives; and
e) Championing a customer-centric corporate culture
Interestingly, the report says, the authors used IBM Watson among other techniques to draw its conclusions. Using your own product for marketing is usually a big win. The full report is ungated and can be downloaded in PDF format: The Modern Marketing Mandate: The Chief Marketing Officer Perspective.
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The opposite of getting 5% more budget is losing it. That’s also a useful mental exercise. Thinking over what you’d cut brings into focus those programs and efforts you really value, or perhaps those that deliver more than expected.
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