CMOs: Mobile Spend Slowing, Social Going Strong
August 18, 2014
By Karlene Lukovitz
Spending on social media and video is accelerating, while spending on mobile marketing shows signs of slowing, according to the CMO Council's annual State of Marketing global benchmarking study.
More than 525 senior marketing executives from around the world (half from North America) were surveyed on 50 key points during the first quarter. The survey spans company sizes and customer focuses (41% are B2B, 23% are B2C and 35% are hybrid).
The top areas of projected media budget growth over the next 12 months are social advertising and online video (71% of marketers project growth in each of these areas), social engagement campaigns (69%), retargeting (67%) and search engine marketing/SEM (66%).
Forty-four percent of marketers say their social advertising budgets will grow by up to 5% (up from 38% saying the same in last year's survey), and 27% say that these budgets will grow more than 5%. Furthermore, 39% say that spending on social media engagement campaigns will grow by up to 5%, and 30% by 5% or more.
Similarly, 39% and 32% say that online video spending will increase by up to 5% or more than 5%, respectively. The comparative numbers for online retargeting are 35% and 32%, and those for SEM are 35% and 31%.
Meanwhile, mobile's numbers have declined from last year, when 62% said they planned budget increases and 25% projected increases of more than 5%. This year, nearly half (48%) said they expect no change in spending on mobile SMS and 45% said they expect no change for mobile banners. A third do expect to increase mobile banner spending by up to 5%, and 27% expect to do the same in mobile SMS. But just 15% and 17%, respectively, expect to increase mobile banner and mobile SMS budgets by more than 5%.
Asked to rank the most effective ways to brand and generate demand in their market, nearly 50% list search-optimized Web site marketing, as well as events and trade shows. Another 42% see the most value in social media interaction and engagement. These eclipsed traditional print and broadcast media and were well ahead of mobile search and mobile advertising.
Web sites (including microsites and communities) are now on par with trade shows and conferences when it comes to consuming the largest portions of total demand generation/advertising budgets, at 9% each.
Television and lead generation/thought leadership (including content generation) follow, at 7% each. The social media allocation is projected at 6%. Several channels are each projected at 5%: SEM/SEO, online display advertising, direct marketing (print and offline), sales collateral, and marketing research/online media analytics. Social advertising and engagement campaigns are each at 3%.
Digital and Big Data Progress, Challenges
Not surprisingly, digital is a driving focus in budgetary, self-assessment and goals terms.
More than 70% of marketers have allocated between 10% and 30% of their budgets to various digital media. Top areas of digital marketing investment in the next 12 months include email marketing, Web site performance optimization, mobile applications, lead management, Web site design and development, and search marketing.
Asked about their biggest accomplishments in the past 12 months, 54% of marketers point to improving digital marketing capabilities and improving engagement with customers online. (The runners-up are restructuring/realigning marketing to better support sales and improve selling cycles, cited by 46%; and implementing new campaigns that advanced the business, brand or customer experience, cited by 45%.)
At the same time, nearly 60% list a “digital marketing makeover” involving platforms, programs and people as number one among the "transformational projects" they plan in the year ahead. Also, improved efficiency and campaign effectiveness is cited as the top reason for deploying new digital solutions and cloud-based services.
Furthermore, just 6% of marketers rank themselves as "excellent" when it comes to digital marketing performance. Most (54%) say that they're “getting better by growing capabilities and improving measurement," while 17% think they're "good and on the way to great." Twelve percent say they're lagging the competition, 7% they are neither improving or falling behind, 3% admit they're struggling and 1% that they're failing.
Perhaps pointing to some pressure from top management in the digital direction, asked which factors influence their decisions about marketing mix allocations, by far the largest number (58%) cited "management or business leader direction," whereas considerably smaller numbers cited potential ROI (39%), market/media research and analytics (37%), budget constraints (37%), digital media and online marketing effectiveness (36%), and channel demands and preferences (33%).
Marketers confirm they re focused on helping their organizations become more market-minded and adaptive to customer needs, and 63% say they plan to maximize the impact and value of marketing through improved customer segmentation and targeting.
But most are struggling in their efforts to tap and employ customer knowledge and insights, due to the complexity of data from social media, CRM systems, contact centers, market research departments, transactional channels, mobile apps, Web sites, e-commerce engines and third-party suppliers.
Only 6% claim to be leaders in Big Data management, whereas 62% view themselves as just keeping pace or lagging behind competitors in their region or other parts of the world. As a result, customer analytics skills top senior marketers' list of the new talent and internal resources they want to recruit in the coming months.
The top strategic areas of funding and resource allocation for marketers over the next 12 months include new product or program launches (53%); corporate branding and identity building (53%); and lead generation and qualification (50%).
The researchers point out that 44% say they will be investing in customer retention and monetization, which is more efficient and profitable than subsidizing new customer acquisition, where most marketing dollars tend to flow.
Most Budgets Rising; Agencies in Flux
More than half (54%) of marketers report that they expect their budgets to increase year-over-year. Forty percent project budget increases of up to 2%, but 31% expect increases of up to 10%, and 9% expect more than 20% growth.
About a quarter (27%) say budgets will remain flat, and another 22% expect cuts — a decided improvement over 2009, when half of marketers expected budget cuts.
More than half (55%) plan headcount additions, compared to 22% who expect reductions.
Fully 81% of marketers said that they think view management mandates for top-line revenue growth and market share are realistic and attainable within the next 12 months, although only 26% said they were halfway toward achieving these goals as of the survey.
While 63% of marketers rate the contributions of their agency partners as extremely valuable or pretty good, 66% are planning to make one or more changes to their agency rosters in the next 12 months. Lack of business results, value-added thinking and uninspired creative top the list of reasons for these changes.
CMO Status Perceptions Largely Positive
Three-quarters of senior marketers report receiving a salary increase or bonus in the past year, and 83% believe this will happen again in the next fiscal year if they perform well.
Thirty-nine percent of senior marketers surveyed report making between $100,000 and $199,000 per year, and 28% report making between $350,000 and $499,000 per year. Further, 89% report that bonuses are part of their compensation packages, 39% get perks and privileges, 34% get options, 29% get expense accounts and 28% get equity.
But a third believe they're not fairly compensated compared to other senior marketers and 21% say that they're not sure about this, versus 46% who feel they are fairly compensated.
Sixty-nine percent say that they're trusted, strategic members of the C-suite and/or increasing their stature and credibility with key business leaders. About 30% say today’s CMO is equal to other C-level peers in status and influence, although 45% think that this is only sometimes the case, and 20% believe that the CMO is not equal.
Forty-one percent say that their biggest area of frustration is insufficient budgets, followed closely by senior management's mindset toward marketing, and change-resistant cultures.
CMOs are most inclined to partner and interact with chief financial officers (58%), chief information officers (53%), and chief sales officers (51%). They're also aligning with chief HR officers (41%), chief operating officers (40%) and chief procurement officers (15%).
Increasing collaboration with sales or channel organizations is the top professional objective for the coming months (cited by 54%), followed by reaching out to customers to advance market insights (42%), and further interacting and collaborating with peers (42%).
"CMOs: Mobile Spend Slowing, Social Going Strong." MediaPost, 08/18/14.
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