The CMO Survey Blog

Mobile Spending to Increase 160% Despite Performance Questions

Marketing leaders report their companies currently spend 6% of marketing budgets on mobile marketing and that this investment level is expected to increase to 15.6% over the next three years. The CMO Survey reports this increase in newly released results from 255 marketing leaders.

This whopping 160% increase reflects a growing reliance on mobile to interact with customers where they look for information and make purchases. On top of it, companies hope to reach customers closer to the time of purchase in order to make them aware of offerings, deals, and additional information that may help close more sales.

Despite these hopes, marketing leaders report only modest success in the impact of mobile marketing activities. When asked to rate the performance of their company’s mobile marketing activities on a scale from 1-7 where 1=poorly and 7=excellent, Figure 1 shows the current gap with only customer engagement breaching the halfway mark, while delivering your brand message, customer acquisition, customer retention, sales, and profits all falling below average.

Figure 1. How Mobile Marketing Performs (7-point scale where 1=poor, 7=excellent)

Examining different sectors, Table 1 shows, on average, B2C companies outperform their B2B counterparts in getting returns from mobile. However, at the same time, no sector has any real advantages.

Table 1. Sector Performance on Mobile Marketing

The CMO Survey did not ask how marketing leaders plan to invest the huge increase in mobile spending over the next three years, but it is clear that allocating a large portion of it toward understanding and managing the impact of mobile is essential. As with other aspects of business, it is not the size of your budget that matters, but how you manage the investment to create and leverage critical customer, brand, and financial outcomes. Among the most important steps are fundamentals of marketing strategy, including selecting your target customer, developing and communicating a benefit that meets customers across all aspects of your marketing, including mobile, and then figuring how to reach and engage customers at the right time and in the most effective ways. Importantly, marketing leaders should not forget that poor mobile marketing can harm your brand and your relationships with customers.

Strong Economic Outlook Spurs Marketing Spending

Marketing leaders report their most positive outlook since the recession hit six years ago, according to new results from The CMO Survey. When asked to rate how optimistic they are about the overall U.S. economy on a scale where 0 is least optimistic and 100 is most optimistic, current reports are 69.9 compared to February 2009 levels of 47.7.

This 46% increase is built on related reports that marketing leaders expect all customer indicators to improve in the next year. These include customer acquisition, customer growth (increased volume and increased purchase of related products and services), customer retention, and new customer entering the market. To top off this good news, price is predicted to be less important than superior product quality, excellent service, and a trusting relationship with companies.


Marketers are spending against this positive outlook. Specifically, marketing budgets are expected to increase 8.7% in the next year. Compared to the half of percent marketing leaders reported in February 2009, their confidence in markets is very clear.

What are marketers spending on? This is a four part story. First, digital marketing is expected to grow by 14.7% next year compared to a negative growth rate of 1.1% for traditional advertising (outside of the web). Second, marketing spend on mobile is expected to almost triple from 3.2% to 9% of marketing budgets in the next three years. Third, marketing spend on social media is expected to increase 126% over the next five years, from currently 9.9% of marketing budgets to 22.4%. Finally, marketers will spend more on marketing analytics, which currently account for 6.4% of marketing budgets. This is expected to increase 83% to 11.7% in three years.

Interestingly, hiring in marketing is not growing at the same pace with marketing leaders reporting only a 3.5% increase in marketing hires. One reason for this is that companies are hiring outside agencies and consultants to do some of these marketing tasks. For example, companies currently use outside agencies for 19% of social media activities which is an increase over 17.4% from just one year ago.

Sponsored by the American Marketing Association, Duke University’s Fuqua School of Business, and McKinsey, Inc., The CMO Survey collects and disseminates the opinions of top marketers in order to predict the future of markets, track marketing excellence, and improve the value of marketing in firms and in society. For a complete set of results, visit

Measuring the Impact of Social Media on Your Business

This post was co-authored with Becky Ross and Shannon Gorman, both MBA students at the Fuqua School of Business, Duke University.

Spending on social media continues to soar, but measuring its impact remains a challenge for most companies. When The CMO Survey asked marketers how they show the impact of social media on their business, only 15% cited they have been able to prove the impact quantitatively. This low percentage is not completely surprising given that social media is a recent innovation that companies are quickly trying to understand and direct to the most profitable ends.

Additionally, The CMO Survey asked marketing leaders to report on the metrics they are using to track and analyze their social media activities (see Table). The most common metric is “hits/visits/page views” which represents the beginning of the funnel—awareness—but is not very diagnostic of purchase. The metrics that show the largest increases over time, are “engagement metrics,” such as number of friends/followers (+88%), net promoter score (+71%), buzz indicators (+54%), product/service ratings (+71%), and other types of text analysis such as sentiment analysis or keyword analysis on Twitter or anywhere customers post text about companies (+77%). Although abandoned shopping carts also increased, in general, we observe fewer companies using actual purchase activities or financial outcomes, such as profits or revenues, as metrics to evaluate their social media programs which was discussed in a prior post.

Table. Frequency of Social Media Metrics Used by Companies

Given these findings from The CMO Survey, we interviewed social media experts to better understand the challenges of demonstrating the impact of social media and the types of metrics used to do so. Here are eleven insights gained from these interviews.

  1. Use goal-driven metrics. Set specific goals for each social media campaign and then develop metrics based on those goals. If a social media campaign is designed to generate brand awareness, then engagement is an appropriate metric. However, if a social media campaign is intended to drive purchase, then the conversion rate from visitor to buyer might be a more suitable metric. This insight may seem obvious but there is often a disconnect between goals and metrics.
  2. Demonstrate metric validity. Metrics must be vetted to ensure they are valid—meaning they measure what they are designed to measure. For example, at what point should marketers classify a consumer’s interaction with a company on social media as “engagement”? Is it when a consumer likes or shares a post? Proving metrics requires linkages to key outcomes, customer interviews, and managerial judgment.
  3. Uncover and verify leading indicators. Social media engagement, measured by the number of page views, click-throughs, comments, shares, and likes, is often used as a leading indicator of downstream sales outcomes. Identifying and tracking such leading indicators is valuable as companies can gain an early sense of how well their strategies will pay off.
  4. Create dashboards. Most companies with a social media presence track metrics from multiple sources. As a result, it is helpful to create a social media dashboard that aggregates these different sources and shows a comprehensive view of the company’s or brand’s performance. A dashboard saves monitoring time and ensures that marketers have real-time access to how important metrics are trending.
  5. Develop meaningful benchmarks. Comparing results to meaningful benchmarks provides important context when assessing the impact of social media campaigns. Building a database of social media campaigns and their corresponding outcomes enables your company to develop these benchmarks. Your agency may also be able to provide a broader view of these benchmarks if they have access to a range of campaigns from various companies.
  6. Conduct experiments. To truly understand the impact of social media, companies must be willing to conduct experiments. Small experiments such as pre- and post-tests that measure consumer activity before and after a social media campaign are a useful way of assessing performance. Even better, include a control group that is matched on observable characteristics for comparison to the treatment group. For example, use geo-targeted social media in one city and compare results to a control-group city in which the campaign did not run.
  7. Allocate funds to measurement. According to The CMO Survey, companies spend only 2.3% of their marketing budgets on measuring ROI. Measuring the impact of social media requires investing in metrics. This investment might include dedicated staff, agency partnerships, tools and technology, models, or customer databases.
  8. Consider the cost of ignoring social media. One social media expert we interviewed offered the insight that the inability to perfectly measure social media’s return on investment (ROI) should not limit investments in it. Instead, he encourages his organization to also consider the Cost of Ignoring (COI) social media – “What is the cost to our business of ignoring this new business platform?”
  9. Build predictive models. Metrics are often used to analyze what has happened, but they also can be used to predict what is likely to happen depending on the tactics employed, such as spending levels and media placement. To gain the most out of your metrics, leverage them to build predictive models and then plug in different inputs to simulate possible outcomes.
  10. Guide future actions. Measures should ideally be designed to offer developmental feedback. Ask yourself, if your social media campaign is not working, what information do you need to know in order to improve? Build your metrics or add additional metrics to capture this information so you know how to course correct and do better in the future.
  11. Stick with your metrics. Vendors are constantly developing new tools to measure the impact of social media. Nevertheless, marketers should focus on utilizing a handful of tracking tools that fit their goals and have passed important validity hurdles. Be careful not to flit between different metrics as doing so will hinder learning and waste valuable resources.

Although metrics are out there, debates about what these metrics mean and how they should be used can become both statistically and philosophically complex. At a recent conference, Tony Fagan, Google’s Director of Quantitative Research, noted that his staff was implementing propensity score matching in order to improve their ability to make causal inferences from observational data. His comment made it clear that marketers are not in Kansas anymore when it comes to social media measurement. We hope these insights offer a few signposts to marketers on this path.

Sponsored by the American Marketing Association, Duke University’s Fuqua School of Business, and McKinsey, Inc., The CMO Survey collects and disseminates the opinions of top marketers in order to predict the future of markets, track marketing excellence, and improve the value of marketing in firms and in society. For report downloads, visit  

12 Tips for Integrating Social Media into Your Marketing Strategy

This post was co-authored with Becky Ross and Shannon Gorman, both MBA students at the Fuqua School of Business, Duke University.

Social media is an increasingly important tactic in companies’ marketing strategy and yet results from The CMO Survey continue to indicate that many companies manage social media as a separate activity. Asked how effectively social media is linked to their company’s marketing strategy on a 1-7 scale where 1 is “not integrated” and 7 is “very integrated,” the average level of integration was only 3.9. Although we see companies planning to increase social media spending as a percent of marketing budget from 9.4% to 13.2% over the next year and 21.4% over the next five years, the level of integration has not changed in the past four years (see Figure).

Figure. How effectively is social media linked to your firm’s marketing strategy? (1=Not integrated, 7=Very integrated)


We interviewed marketers across industry sectors for insight into what actions they are taking to improve social media integration. Here is what we learned.

  1. Choose strategy over tools. Social media is still in its infancy, so change is constant and new tools are being introduced at lightning speed. Using the latest and greatest technology may benefit the company, especially when its target audience includes younger and more media-savvy customers. However, it is always important to judge the value and impact of a social media tool against the company’s marketing strategy rather than its innovativeness. Will the tool help the company design or develop a more effective marketing strategy? If not, leave the shiny object on the shelf for another day.
  1. Drive social media actions against marketing goals. If social media actions are undertaken without a clear customer objective, integration is likely to be elusive. This means that marketers should always identify a specific customer objective when employing social media tactics. One common approach we observed was marketers using social medial to help move the customer into and through the purchase funnel.
  1. Be forward looking. Like traditional media campaigns, social media is often used to generate brand, product, or company awareness. If awareness is the goal, marketers must have a clear understanding of what happens next in the company’s marketing strategy to convert awareness into purchase intent. Likewise, if building brand advocacy is the goal, marketers should be clear about how to use these evangelists to amplify the company’s message and increase customer loyalty.
  1. Align social media channel to marketing strategy. While practically every brand is on Facebook and Twitter, there are many other social media platforms, such as Instagram and Snapchat. Brands typically do not have the resources to be on every social media platform, so how do marketers prioritize? They should choose the social media platforms that fit the company’s target audience and brand positioning. For instance, Facebook and Twitter tend to reach a broad demographic, while Instagram and Snapchat have a younger user base.
  2. Create social media toolkits. Brand toolkits have become standard procedure for many companies and are effectively used to guide local markets on how to portray global brands by providing templates and guidelines for tailoring content. In a similar way, some companies are starting to create social media toolkits which include templates for Facebook and Twitter posts. These kits can ensure strategic alignment and create a more cohesive brand image across geographies and platforms while reducing the time and resources required to develop social media content.
  1. Put social media experts on brand and customer teams. When social media operates from a separate group or from a separate location, there is a greater probability of poor integration. Instead, social media experts should be closely linked to the brand and customer teams so they are involved as soon as communication objectives have been established. This involvement pays off because social media experts are tuned in to the latest platforms and know what approaches generate interest from current and potential customers, fans, and enthusiasts. As a result, these experts can guide brand teams to the most effective results.
  1. Balance in-house and agency expertise. With so much to learn and social media moving at such a fast pace, many companies outsource social media activities to multiple agencies. This structure threatens the integration of social media because agencies rarely understand the totality of a company’s marketing strategy. This concern leads some companies to move more social media activities in house or utilize deep partnership models with their agencies.
  1. Convert to purchase. Social media is one of the very few places where companies can engage with their customers in an ongoing, personal, and real-time manner. As such, it can serve as a key touch point that brings the company’s marketing strategy to its raison d’être— If, for example, a follower posts she is going shopping for a particular item, companies can respond with a tweet containing helpful information or personalized discounts, and/or promotions.
  2. Be willing to say no. Given the buzz surrounding social media, every brand or customer-facing function likely wants its own Facebook page and Twitter account. Marketing leaders need to hold the line and decide which social media platforms are ideal for a given brand from a strategic and customer point of view. Controlling social media access through a social media group ensures that someone is accountable and knowledgeable about the best ways to use it as part of a company’s or brand’s marketing strategy.
  3. Champion integration. For integration to be valued and sought, leaders need to share success stories throughout the organization. Success stories can become part of the company’s ethos and organically influence the integration of social media in marketing activities.
  4. Sort out attribution. If social media is part of a company’s marketing strategy, questions will be raised about its contribution to sales revenue and how it works alone and in conjunction with other tactics. These are worthy questions and steps must be taken to understand and measure the effects of social media in order to integrate it with the company’s marketing strategy in the most efficient and effective manner. Marketers shouldn’t let these attribution questions keep them from pursuing social media, but instead consider them an opportunity to demonstrate its value.
  5. Learn from failures. Because it is much easier to experiment with social media than traditional media, companies can test and learn quickly. Also, social media execution costs tend to be much smaller than traditional media, so the losses from failures are less severe. By experimenting with social media, companies can more accurately determine which social media posts and campaigns have the greatest impact on their marketing strategies—helping to further integration efforts.

When social media is integrated with the company’s marketing strategy, the company’s management of its customer and brand assets is seamless. Strategic elements such as segmentation, targeting, positioning, and all go-to-market activities reflect a clear and consistent understanding of the value the company offers to its customers and how the company seeks to capture value from attracting and retaining these customers over time. The result of social media integrated into marketing strategy is improved efficiency and effectiveness in all aspects of the marketing plan.

Tweet this: Social media important to company performance but difficult to prove

New results from The CMO Survey point to this disconnect. Social media spending is currently 9.4% of marketing budgets and is expected to increase 128% to 21.4% in the next five years (see Figure 1). However, the 351 marketing leaders responding to August 2014 survey overwhelmingly report that proof lags spending and only 15% of marketers report their companies can show the impact of social media using quantitative approaches.

What’s the buzz? Companies experienced a 25% percent increase in sales through the Internet in the last year—from 8.9% to 11.3% of sales. There does appear to be a sizable opportunity in reaching customers through the Internet that underlies this spending push. Consistent with this view, digital marketing, more broadly, is expected to increase 10.8% in the next year, while traditional advertising budgets are predicted to decrease 3.6%. In other words, there is a signal in all this buzz.

Figure 1. Social media spending as a percent of marketing budget


Pinning it down: Demonstrating the effect of these spending increases on businesses remains a challenge. Forty-five percent of marketers have not been able to demonstrate this impact at all while 40% have qualitative proof only. Getting that all-important quantitative proof, which only 15% have, is essential to justifying this spending (see Figure 2).

Figure 2. How companies demonstrate the impact of social media spending


Doing so will likely require more spending on measuring marketing ROI. Survey results indicate that companies spend only 2.3% of marketing budgets on measuring marketing ROI. It will also require companies to rethink the way they approach such measurement. Survey results also indicate that only 11.9% of companies surveyed use experiments—a method that allows marketers to know with certainty what, whether, and to what degree social media spending impacts performance.

Who Has the Biggest Marketing Budgets?

Marketing budgets are rebounding. They are expected to increase 6.7% in the next twelve months according to the February 2014 edition of The CMO Survey. This is a sizable increase over projected increases of 4.3% in August 2013 and a massive boost over the 0.5% increase reported in February 2009. Bounce!

To put these figures in perspective, The CMO Survey reports that marketing budgets represent approximately 10.9% of overall firm budgets. These figures have hovered around this average since this question was first asked in February 2011. On the other hand, marketing budgets as a percent of firm revenues improved to 9.3% from 7.9% in 2013 indicating that marketing budget growth outpaced revenue growth. One question that survey users often ask about these figures is whether or not they include salaries for marketing employees. Analysis indicates that these marketing spend estimates include both employee and non-employee investments in marketing.

I examined all three marketing spending metrics across several firm and industry characteristics. These are summarized in Tables 1-3. As shown in Table 1 across these three indicators, B2C-Product companies have the largest marketing budgets (as a percent of budgets and revenues) and the largest expected growth in marketing budgets across the four economic sectors. I expected a large increase over the B2B companies which may be reaching customers with their own or their channel’s salesforce. However, I did not expect to find B2C-Product companies also dominating B2C-Service companies by 20-30% differences. Would love to hear from marketing leaders in this sector about this differential.



The Riddle of Marketing in Russia

This post was co-authored with Evgenia Barkanova, Irina Kudryashova, and Irina Melnik, all MBA students at the Fuqua School of Business, Duke University.

Winston Churchill said, “Russia is a riddle wrapped in a mystery inside an enigma.” This becomes clear when thinking about U.S. companies marketing in Russia (more properly called the Russian Federation). Results from the last CMO Survey indicate that Russia is the international market with the highest sales growth rate. Sales are reported to have grown an average of 57% for U.S. companies that designate Russia as their largest international market. This compares with India at 38%, China at 26%, and Brazil with 19% growth.

Where is the enigma inside the Russian marketing mystery? Consider these facts. Russian is the world’s 6th largest economy. A member of G8 and G20, identified among the BRIC economies, and a recent entrant to the WTO, Russia is an emerging economic powerhouse. Strong earnings from the oil/natural gas industry have grown the overall economy and allowed the country to diversify its economy while retaining an above average GDP growth rate of 4.1 % from 2010-2012 according to the World Bank (compared to 2.4% for the USA). Even with these impressive credentials, Russia remains a difficult market for many foreign companies for a variety of reasons. What should U.S. marketers know about this Russian riddle? We collected the following case studies involving non-Russian and Russian companies as well as several interesting facts to offer these insights.

1. Sochi 2014: All eyes on Russia: The 2014 Winter Olympics in the Black Sea resort of Sochi promise a wealth of opportunities for foreign firms and investors. An estimated $50 billion will be spent on more than 40 transport, housing, stadiums, and other modernization projects along with upgrades in telecom, energy, and environmental protection to convert Sochi into a winter sports wonderland. Participating in this important international event could help non-Russian firms make inroads for future projects. Official sponsorships as well as using the Olympics for independent marketing events that piggyback on individual events and athletes could help build brand awareness among Russian customers. One threat is that the games may not go off as well as sponsors hope. The opening ceremony glitch with the Olympic rings is well-known by now and public perception of the games is so bad that @SochiProblems has already racked up ten times the followers compared to @2014Sochi—the official Twitter account for the games. The Olympic experience may serve as a metaphor for doing business in Russia … full of opportunities, but one is wise to prepare for more than the usual amount of the unexpected.


CMO Optimism, Confidence, and Company Growth Strategies

Results from the February 2014 edition of The CMO Survey, a biannual survey of marketing leaders, offer strong evidence that markets are on solid footing. CMO optimism for the U.S. economy reached its highest point in five years. Asked to rate their optimism about the overall economy on a 0-100 scale where 100 is most optimistic, CMOs reported an average score of 66.1 which is nearly 20 points higher than a low score of 47.7 in February 2009 (see Figure 1). This optimism occurred across all sectors, ranging from manufacturing to biotech and consumer packaged goods.

Figure 1. How optimistic are you about the overall U.S. economy on a 0-100 scale with 0 being the least optimistic and 100 the most optimistic?

Underlying this optimism are improvements in key customer metrics such as increased entry of new customers into the market, increased customer acquisition, increased purchase volume, and increased customer retention. These top marketers also predict that customers’ top priority over the next twelve months will be a focus on product quality, not on low price. This shift indicates a belief that consumers are ready to spend again and are less interested in cost savings.

Does Pressure to Prove the Value of Marketing Help or Hurt Company Performance?

Two-thirds of all top marketers feel pressure from their CEO or Board to prove the value of marketing according to August 2013 results from The CMO Survey. Of those, 60% describe that pressure as increasing. These numbers are consistent with the fact that most CMOs continue to find proving the value of marketing elusive. Survey results indicate that only 36% of top marketers report being able to prove the value of marketing quantitatively in the short-run and 31% in the long-run. Demonstrations of the value of social media are even more elusive with only 15% able to offer quantitative evidence for the value of social media spending.

A key question that needs to be asked is whether pressure on CMOs to prove the value of marketing helps or hurts company performance. These are reasonably good arguments on both sides. On the positive side, increasing pressure might make marketers work harder. On the negative side, increasing pressure could make marketers focus on strategies that are easily measured or that only provide short-term boosts so that proof is in hand when the CEO or board comes knocking. This means that instead of designing and selecting strategies that are optimal for company goals, strategies are selected to help marketers defend their spending decisions.

Why Companies Should Compete on Privacy (and What Customers Can Do to Help)

The CMO Survey reports that 40 percent of companies use customer information collected online for targeting purposes and 88.5 percent of chief marketing officers expect this practice to increase over time. At the same time, CMOs have very low levels of concern about how the use of online customer data infringes upon privacy. Specifically, when asked, “How worried are you that this use of online customer data could raise questions about privacy?” on a scale where 1=not at all worried and 7 is very worried, the average response was 3.5. The Figure shows the full distribution.

Figure. CMO concerns about use of online customer data and privacy questions

At the same time, a recent by the Pew Internet & American Life Project found that 86 percent of Internet users have taken steps to remove or mask their digital footprints — ranging from clearing cookies to encrypting their email. Fifty-five percent have gone even further to avoid being observed by specific people, organizations or the government.