Marketing Trends for 2018 and BeyondJune 25, 2018
“Today it's important to be present, be relevant and add value." – Nick Besbeas
How are marketers staying present, relevant and adding value?
Three surveys querying Chief Marketing Officers (CMOs) about how they are going about marketing were released this year. We have compiled key data from the Korn Ferry CMO Pulse Survey 2018, the Nielsen CMO Report 2018 and The CMO Survey by Duke University’s Fuqua School of Business and sponsored by Deloitte LLP and the American Marketing Association in this blog entry.
We categorized key data from these three surveys into 4 categories: an overview of the state of marketing, how marketing budgets are being spent, which channels are being used and analytics. All data referenced in this article are from the perspective of CMOs.
State of Marketing
There is a disconnect between marketing efforts and company performance.
Most CMOs--52%—can’t make a direct and obvious correlation between marketing efforts and company performance. Just 13% say there is an obvious and direct connection between marketing efforts and company performance.
Despite the disconnection between aligning marketing output with company performance, most CMOs are optimistic about their future marketing results.
Takeaway point: The general perception is that marketing efforts are working, but tying these efforts to specific company objectives is a murky area. That’s why it is important to identify clear, measurable marketing objectives before undertaking any marketing campaign. Plan campaigns around specific goals and brainstorm ways to quantify success before embarking on marketing activities.
Overall, marketing spending accounts for 7.9% of company revenues and 11,1% of company’s overall budget. 82% expect to increase their digital media spend and 44% expect to decrease their traditional spend within the next year.
CMOs carve out a dedicated budget portion of their budget to digital channels. Overall, about 44% of CMOs say that digital media accounted for the largest percentage of their overall spend. Social media spending accounts for 12% of the total marketing budget. This percentage is expected to increase to 15.3% in the next 12 months and to increase to 20.5% in 5 years. Companies that provide consumer services plan to increase their social media spending in the next 5 years about 3% more than companies selling products.
Mobile marketing accounts for 7% of the overall marketing budget and is expected to climb to 13.5% of the total budget in the next 3 years. Companies that provide consumer services allocate more of their marketing budget to mobile than companies selling products.
Takeaway point: Unsurprisingly, the trend is to increase digital spending. We must surmise based on the available data that traditional marketing efforts still occupy most of the marketing budgets. This suggests that digital channels won’t replace traditional channels anytime soon, so keep a combination of traditional and digital channels in your marketing mix.
Given that most marketers are increasing their spending on digital media, digital channels are the most prevalent. However, the preferred channels for brand building are traditional media. Digital reigns supreme for the remaining marketing activities.
The preferred channels for customer acquisition include search, social networks and email. 46% use social media for brand awareness. Social networking ranks as the most impactful social media platform.
The top 5 uses for social media include brand awareness/brand building, acquiring new customers, introducing new products/services, retaining current customers and brand promotions. The top 5 most effective social networking activities are social networking, blogging, product reviews, video sharing and photosharing.
Mobile also plays a role. It’s primarily used for customer engagement, delivering brand messaging and customer retention.
Most CMOs aren’t focusing exclusively one 1 channel to connect with customers. 62% plan an omnichannel approach (provide a unified experience across all channels) and 36% plan a multichannel approach (treat each channel as a separate entity).
CMOs ranked all channels from their most to least effective:
- 90% social media
- 89% search
- 83% mobile
- 73% programmatic
- 62% print
- 61% linear TV
- 51% OTT-TV/connected TV
- 46% radio
Takeaway point: The shift in marketing budget allocations reflects the growing importance of digital channels. As the trending spending data indicates, both traditional and digital channels will remain integral to marketing efforts in the near future. It is critically important to be both thoughtful and strategic when deploying marketing campaigns.
As discussed in the first section of this article, there is a disconnect between marketing efforts and company performance. Is the problem that marketing objectives are not defined clearly enough to quantify? Is the issue with the analytics themselves, or something else entirely?
Most CMOs don’t think they have quality data—only 44% agree that they have access to quality data.
Just 26% expressed high confidence in their ability to quantify digital media’s performance. Nielson’s survey found just 5% expressed extreme confidence in their ability to quantify traditional media ROI. There is an overall higher confidence in the ability to measure digital media over traditional media.
Despite the lack of quality data and confidence interpreting what data is available, CMOs are showing a strong commitment to investing in analytics. Currently, analytics account for 5.8% of the company’s marketing budget and 79% expect to increase their investment in analytics within the next 12 months.
Takeaway point: Even though the quality of available data is lacking (along with confidence in interpreting it), the consensus is that collecting analytics is still important. Having some idea is better than no idea.