Christine Moorman is the Director of The CMO Survey® and the T. Austin Finch, Sr. Professor of Business Administration, The Fuqua School of Business, Duke University.

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The CMO Survey Blog

Overcoming the Marketing-Sales Turf War: Six Strategies to Integration

June 4th, 2013

Marketing needs sales and sales needs marketing. Unfortunately, “need” does not equate to a “successful partnership” between the two groups. Conflict and distrust are more common. Such a dynamic can hurt the bottom line, especially in companies that use sales groups to interface with their customers. The CMO Survey® asked top marketers to describe how their companies structure the marketing-sales relationship. 7% stated that sales is within marketing (marketing has the power), 10.3% noted that marketing is within sales (sales has the power) and 72% indicated that marketing and sales work together on an equal basis. These data from the February 2013 issue of The CMO Survey have not changed much over the last five years. Bottom line: As equal partners, marketing and sales must find a way to work together.

It is easy to blame stereotypes of these two powerhouse functions as the reason for the well-documented sales-marketing turf war. Marketing is analytical and sales is interpersonal. Sales has a short-term focus and marketing has a long-term focus. Marketing is more strategic and sales is more tactical. Marketing is pull and sales is push. However, these stereotypes obscure the truth. In reality, the roles that sales and marketing play and their subsequent relationship depend on how the company chooses to manage and structure these two functions. (more…)

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Measuring Social Media ROI: Companies Emphasize Voice Metrics

May 23rd, 2013

The influential economist Albert O. Hirschman argues that customers can have a disciplining effect on companies and markets through their exit and voice behaviors. Instead of simply “quitting” a product, Hirschman urged customers to voice their complaints so companies could improve and learn. Hirschman would be a happy camper these days because social media puts a megaphone on the voice of the customer. Results from The CMO Survey® show that companies, in turn, are also starting to see the value of emphasizing voice-based metrics.

The CMO Survey investigated which metrics companies are using to measure the impact of social media investments. In August 2010 and then again in February 2013, top marketers were asked to share which metrics they use to evaluate social media. Looking across the results, we can see which metrics companies most often use. The survey did not, however, ask respondents to rank or rate each metric in terms of importance. (more…)

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The Utilization Gap: Big Data’s Biggest Challenge

March 19th, 2013

Big data’s the buzz. It’s in the press, all over the web… heck, it even has its own hashtag– #bigdata. CMOs recently reported that the percent of their companies’ marketing budgets devoted to big data will increase from 6% to 10% over the next three years. Multiply this 66% increase across all of the other areas Big Data is showing up in companies (e.g., supply chain management) and you have a sizable strategic expenditure. The bigger the company, the larger this increase. In data collected from The CMO Survey, companies with sales revenue of $10B or more will spend 13.7% of marketing budgets on marketing analytics in three years while companies with sales revenue of $25M or less will spend 9.2%.

Despite this big spend, there are reasons to worry that Big Data is not delivering its full strategic wallop. When asked to report the percentage of projects in which their companies use marketing analytics that are available and/or requested, CMOs report a dismal 30% usage rate. This number has decreased from 37% a year ago. So while companies are spending more on Big Data, less of it is being used. (more…)

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Bulls, Bears, and CMOs: Predicting the Future of Markets

March 19th, 2013

From reading the press, I think it’s fair to say that we look to members of the financial sector to tell us where the economy is going. These soothsayers read the tea leaves using metrics like interest rates, capital expenditures, unemployment and stock market reactions. This is all well and good, but it is incomplete. I think it is also wise to tap into the collective wisdom of marketing leaders who have their fingers on the pulse of the market’s biggest engine—customers.

In the February 2013 CMO Survey, 468 U.S. CMOs rated their optimism for the economy on a scale of 0 (lowest) to 100 (highest). The average score was 62.7, which is up from 58.4 in August 2012. This ~10% increase is important but a set of follow up questions tells us even more. Specifically, CMOs were asked to state whether they were “more optimistic,” “less optimistic,” or “no change” compared to the prior quarter. In August 2012, results indicated that uncertainty was rampant with about one third of the sample more optimistic, another third less optimistic, and the final third no change (see Figure 1). Results of the February survey indicate that CMOs who were more optimistic increased from 29 percent of the sample in August 2012 to a whopping 56 percent in the current survey! This 93 percent increase offers a very strong signal that economic uncertainty is fading. (more…)

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Do Marketers Know What They Want From Social Media?

March 17th, 2013

Social media spending as a percentage of marketing budgets will more than double over the next five years according to new results from The CMO Survey. Responses from 468 top marketers in February indicate that companies are spending 8.4 percent of their budgets on social media. Over the next year, that number is expected to increase to 11.5 percent, and in the next five years it will reach 21.6 percent.

Looking back to the first time I asked these questions in August 2009, the levels were 3.5 percent of current budgets and expected to increase to 6.1 percent over the next year and 13.7 percent over the next five years. The increase in current spending from 3.5 percent to 8.4 percent alone represents a 140 percent increase in the last 3 years. No other part of the marketing budget has grown so much in such a short amount of time. In fact, during the same time period, traditional advertising has continued to plummet. It was decreasing by 7.9 percent per year three years ago and continues to drop 2.7 percent in the current year.

The dramatic increases in social media spending were universal across different business sectors: B2B-product, B2B-services, B2C-products, and B2C-services. The B2C-product sector, which includes companies such as Procter & Gamble and The Coca-Cola Company, expects the most dramatic increase, from 9.6 percent to 24.6 percent (see Table 1). (more…)

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New Results from The CMO Survey

February 26th, 2013


Watch the video above to see and hear Chris Moorman discuss the results.

Full results, including the “Highlights and Insights” report, are available on the results page.

Chris Moorman’s post about these results can be found at:  blogs.forbes.com/christinemoorman/

Marketing in a Technology Company: GE’s Organizational Platform for Innovation

February 1st, 2013

This post was co-authored with Anna Chavis and Jace Moreno, MBA students, Fuqua School of Business, Duke University.

At a recent roundtable discussion at Fortune’s Most Powerful Women Summit, Beth Comstock, the Chief Marketing Officer of GE, described how GE approaches marketing: “You have to create a platform that invites innovative ideas.” Unfortunately, we teach marketing and many companies approach marketing as if the organization does not exist. As a result, marketing often fails because it sits outside, or is layered on top, of the most important activities in companies. Marketing needs to be down in the trenches and marketing leadership needs to foster a culture of innovation that creates new products, new services, and new customers.

GE has written this approach into its DNA. In particular, GE’s culture ensures that technological innovation (the historical backbone of GE) and commercial innovation (managing with deep consideration of the customer’s needs and wants) are inextricably entwined. We interviewed Beth Comstock during her visit for the Distinguished Speaker Series at the Fuqua School of Business, Duke University. From this talk and from other press accounts, we derived four capabilities that constitute GE’s organizational platform for innovation. We discuss these capabilities and offer examples of the new products, services, and customers that have resulted.

Capability 1: Create Marketing Innovation Internally

A big feeder of GE’s marketing innovation is the ECLP—Experienced Commercial Leadership Program—GE’s first externally focused leadership program. ECLP began in 2002 as part of Jeff Immelt’s commitment to grow GE’s commercial pipeline and aims to position GE as the “gold standard in marketing.” The two-year post-MBA program develops a pipeline of future leaders and also teaches the company what good marketing is and how it has the potential to change traditional views of product development. The program is viewed as a mutual learning experience—the graduates bring an external perspective and unique talent to GE and program participants learn from GE’s R&D expertise. As Comstock noted, “Marketing must bring a different viewpoint to tough problems. This involves data analytics that produce customer insights and the ability to address customer needs in a creative manner.” She went on to point out that “The best marketers are the ones who have both the creativity and analytical skills in the right proportion.”

Capability 2: Integrate Collaboratively Within GE

There are two key illustrations of this capability—the Commercial Council and the Imagination Breakthrough Process.
(more…)

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In Search of Marketing Excellence: Ten Differences Between High-Performing and Low-Performing Companies

January 16th, 2013

Marketing excellence—marketing leaders strive to attain it and marketing professors try to dissect it. For the first time, The CMO Survey-August 2012 asked top marketers “How would you rate your company’s marketing excellence?” on a 7-point scale where 7=one of the best in the world, 6=a leader but not one of the best, 5=strong, 4=good, 3=fair, 2=weak, 1=very weak. The mean score was 4.4 (standard deviation=1.4). Figure 1 contains the full distribution of responses.

Figure 1. Marketing Excellence Ratings in Companies

Over time, The CMO Survey will develop a longitudinal database and provide more definitive answers to the questions surrounding marketing excellence. However, using only the August 2012 data, I can share some of the performance, spending, strategy, leadership, and organizational choices/outcomes that are and are not correlated with marketing excellence.

To generate these insights, I classified companies participating in The CMO Survey according to whether they performed above or below the mean on the marketing excellence question. The high-performing group (n=184 firms) has a mean marketing excellence score of 5.52 (s.d.=0.66) and the low-performing group (n=170 firms) has a mean marketing excellence score of 3.22 (s.d.=0.88).
(more…)

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Six Reasons Marketing Budgets are on the Rise

November 1st, 2012

Marketing budgets as a percent of overall firm budgets and as a percent of firm revenues are both on the rise as noted in my prior post. Why are firms spending more on marketing? Here are six reasons I see in The CMO Survey™ data and in my research.

  1. New jobs: Marketing appears to be taking a leadership role in managing social media activities in companies. Given social media spending as a percent of marketing budgets is expected to rise from 7.6% to 18.8% over the next 5 years, this means new funds are flowing toward marketing.
  2. New skills: Companies plan to increase marketing training by 3.7% in February 2012 to 7.2% in August 2012. In particular, I see many companies in investing in programs to build marketing capabilities. A good example is GE’s Experienced Commercial Leadership Program, which develops cohorts of young marketers for the company. Another example is Becton Dickinson’s Marketing Excellence Initiative, which provides non-marketers with a big dose of training in key marketing tools and processes.
  3. New knowledge: Big Data has captured the imaginations of leaders in companies big and small. The ability to leverage information about customers in order to deliver and demonstrate value opens the door for marketers to fill the role as analysts and “data whisperers” as McKinsey calls them. As noted by McKinsey in its Chief Marketing and Sales Officer forum, “Data whisperers are those analysts who can coax meaning and insights from the increasingly sophisticated and massive data sets available today.” (more…)

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Marketing Spend on the Rise – Three Trends Worth Watching

October 19th, 2012

Results from The CMO Survey™ (August 2012) contain three indicators that marketing spend is on the rise in companies.

First and the weakest, CMOs reported that marketing spend is expected to grow by 6.4% in the next year. This number is positive, supporting my thesis, but the number is actually down from expected growth of 9.1% from August 2011. Given continued depressed firm growth and slow economic growth, this decrease is not altogether unexpected. It is positive nonetheless.

Second and more telling is the fact that marketing budgets as a percent of firm budgets increased 40% from 8.1% in February 2011 to 11.4% in August 2012. The Figure shows that this percentage has increased steadily over the last 18 months, pointing to the fact that companies are placing a greater emphasis on marketing spend relative to other types of strategic spend.

Figure. Marketing Budgets as a Percent of Firm Budgets

Third, marketing spending as a percent of firm revenues increased 30% from 8.5% in February 2012, the first time The CMO Survey™ asked the question, to 11% in August 2012.
(more…)

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