November 21st, 2013
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.
September 4th, 2013
Companies are spending big dollars on big data. Approximately 5.5% of marketing budgets currently are spent on marketing analytics and this is expected to increase to 8.7% in the next three years as reported in The CMO Survey. Expectations are running high and many companies are trying to figure out how to crack the code to generate good strategic insight from the data.
I’m in favor of the trend to capture and use data to drive decisions. However, that is where the problem lies. As the stash of data grows, companies are using a smaller percentage of it. I first asked the question, “In what percent of projects does your company use available or requested marketing analytics before a decision made” in February 2012 and the result was 37%, which I thought was the bottom. However, when asked that same question in August 2013, the percentage dropped to 29%. Figure 1 shows the continuous decline over the last 18 months.
Figure 1. Percent of Projects Using Requested or Available Marketing Analytics
This finding is not completely unexpected, however. Reviewing the thirty-year history of research on this topic, usage rates have always been low for many types of marketing information—marketing research, advertising research, and, now, social media research. This marketing analytics utilization gap is a challenge to big data’s contribution to the bottom line.
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…)
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…)
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…)