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CMOs: Positive Outlook for Marketing Spend, Better Accountability and Analytics

CMOs are upbeat about spend levels, saying they’ll be mostly holding steady or trending upward in 2008; however, many say they are frustrated and stymied by organizational culture, senior management mindsets, and insufficient budgets, according to the CMO Council’s annual Marketing Outlook survey, reports MarketingCharts.

Some 825 senior marketers across all global regions responded to the CMO Council survey, which was sponsored by Deloitte Consulting LLP and Marketo.

Some 37.6 percent of respondents said annual budgets would not change in 2008, 33.1 percent said they expect to increase spend by up to 5 percent, and almost 10 percent said their budgets would grow 6-10 percent. Only 7.6 percent said they expect to see budget increases of more than 11 percent.

Most global marketers (52.6 percent) said they had budgets last year that equaled less than 4 percent of revenue, and 35.4 percent said their spend was 4-10 percent of revenue.

“It’s not just what they’re spending, it’s where dollars are going and how effectively they are being used,” noted Donovan Neale-May, the CMO Council’s executive director. “There’s definitely more attention to the analytics side of the business and the use of more tangible and targeted forms of personal interaction, contextual communication and online demand generation.”

When asked how they tracked and measured return on marketing spend, nearly 20 percent of marketers said they did not, and 34 percent said they were planning to introduce a formal ROI tracking system. Typical measures included revenue, profits and market share; volume, caliber and conversion of leads; and direct response metrics.

Among the key findings:

• Improved accountability of the marketing organization and using customer data and analytics for better targeting and effectiveness were the two top accomplishments in 2007. This was followed closely by adding new internal resources, capabilities and skill sets.
• While some 79 percent believe marketing is making significant or reasonable progress in improving the perceived value of the function, 21 percent of marketers are either still trying to gain traction or are stalled and losing credibility in their organizations.
• Quantifying and measuring the value of marketing programs and investments remains the top challenge in the year ahead, report some 53 percent of respondents. Other key priorities include growing customer knowledge, insight and conversations, as well as upgrading the efficiency and effectiveness of marketing groups.
• Important organizational and operational changes planned for 2008 include adding new competencies and capabilities, improving accountability of the marketing organization, deploying content and website management solutions, and implementing marketing ROI and/or resource allocation capabilities.
• That focus on organizational improvement is not surprising, considering that 50 percent of CMOs are hired to fix broken marketing organizations, according to the CMO Council.

“Clearly, investments are being earmarked to better integrate and align marketing with sales and to leverage customer insight and intelligence to improve acquisition, conversations and relationships,” noted Dave Couture, a Deloitte Consulting LLP principal and sales and marketing specialist.

MarketingCharts has more findings from the study, including on agency relationships, 2008 marketing dollar allocation and marketing automation.