The CMO Survey Blog

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.

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February 2011 Coverage

Banyan Branch, Social Spending on the Rise (August 30, 2011)

PR Web, According to Mark Herlan, Social Media is About to Secure its Place as a Business Tool (August 22, 2011)

Getting to Yes Faster, Considered-Purchase Brands: 9 Ways to Dump Your Medieval Courting Practices (July 14, 2011)

Forbes, CMOs Optimistic, But Social Media Disconnect Remains (April 6, 2011)DMA 2011 Statistical Fact Book: The Definitive Source for Direct Marketing Benchmarks, See Chapter 7: Social Media with related CMO Survey Results (2011 Edition)

DigitalCPG, Social Media Keeps Budget Amid Cuts (March 10, 2011)

Wolf21 Internet Marketing, Social Media Marketing – Integration in the Overall Marketing Strategy (March 6, 2011)

Memeburn, Integrating marketing and social media remains a challenge (March 3, 2011)

MarketingProfs.comBudgets Shifting; Social Spend, Optimism Up (March 2, 2011)

eMarketer, How Well is Social Media Fitting into the Marketing Mix? (February 25, 2011)

Business News Daily, Social Media Poised to Surpass Traditional Marketing (February 25, 2011)

Durham Herald Sun, Soaring Optimism About Economy (February 16, 2011)

AdAge, CMOs More Optimistic About Economy, Plan to Hire More (February 15, 2011)

Triangle Business Journal, Duke study: Optimism soars among chief marketing officers (February 15, 2011)

BtoB Online,  (February 15, 2011)

Marketing Pilgrim, CMO Survey Results Reported (February 15, 2011)

Brafton, CMOs optimistic about profits, social spend to increase (February 15, 2011)

fayobserver.comFayetteville Businesses Are Using Groupon.com to Reach Customers (February 12, 2011)

CMO Survey: Marketer Optimism Rises to Highest Level in Two Years, All Company Indicators Rebound

DURHAM, N.C. – Top marketing executives at U.S. firms are more optimistic about the U.S. economy and their own companies, with company performance indicators such as revenue, profits and new jobs climbing across the board.

These encouraging results come from the CMO Survey, a nationwide poll of chief marketing officers (CMOs) conducted twice annually by Duke University’s Fuqua School of Business and the American Marketing Association since 2008. The most recent CMO Survey queried 3,778 top marketing executives at Fortune 100, Forbes Top 200 and CMO Club companies from Jan. 11-28.

CMOs rated the U.S. economy at 63 on a scale of 0-100, up from a rating of 56 in August 2010. Nearly 69 percent of CMOs reported they were more optimistic about the U.S. economy, compared to 26 percent the previous quarter. In contrast, less optimistic CMOs fell to 6 percent, down from 35 percent the previous quarter.

“Because marketers have the most direct contact with customers and the best perspective of their future plans, these results are especially credible and bode well for economic recovery,” said Christine Moorman, Fuqua professor and director of the survey. “All measures of customer revenue are expected to see gains in the next 12 months.”

CMOs expect higher customer purchase volume, higher prices, more new customers entering the market and better customer retention. Advertising will see gains in the next year, with spending on traditional ads expected to rise more than 2 percent, the first foray into positive territory since before February 2009.

Spending on social marketing continues its upward trend. CMOs say their firms currently spend 6 percent of their marketing budgets on social media promotions, but that figure will triple to 18 percent over the next five years.

“The growth in social media marketing will be exponential,” Moorman said. “Smaller companies — with revenues under $25 million — in particular will increasingly rely on social media outlets to market their products and services.”

Moorman noted that although firms of all sizes plan to increase spending on marketing via social media, CMOs don’t believe their social media activities are well integrated with their companies’ overall marketing strategies. In fact, 42 percent rate this integration as below average and only 11 percent of CMOs said their company was “very effective” in integrating social media into their marketing strategies. This suggests an urgency to utilize social media even before a comprehensive plan is developed.

“This approach is natural for such a profoundly innovative tool for interacting with customers,” Moorman said. “Firms are in a period of experimentation and observation about social media. Like television advertising in the ‘50s, this period of learning will define the winners and losers of this generation of firms.”

Completing the rebound portrait, CMOs expect to hire 50 percent more marketing professionals over the next year, with the service consulting industry expected to post the largest gains with 82 percent growth.

U.S. CMOs expect most company revenues to come from domestic markets over the next year, while the international market with the highest expected sales increase is  China, up 4 percent over February 2010 estimates. Business-to-business companies expect the biggest increases in Chinese markets.

Apple, Inc. was selected by the survey participants as the standard of excellence in marketing.

Complete CMO Survey data tables by firm and industry characteristics are available at www.cmosurvey.org/results/.

ABOUT THE CMO SURVEY

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. Founded in August 2008, the survey is administered twice each year, with questions repeated over time to discern trends. The next survey will be in August 2011.

August 2010 Survey Coverage

Americas

Grow Your Rent Roll Blog, B2C Outpacing B2B in Social Measurement (October 8, 2010)

Marketing Profs, Three Critical Steps for Securing Your Marketing Budget (October 5, 2010)

2020 Focus on Brand, What”s Hot in B2B Marketing? (September 15, 2010)

CMO.com (reposted from BtoB Magazine Online), CMO Survey Reveals Marketing Optimism (September 14, 2010)

IDG Knowledge Hub, CMO Survey Reveals Marketing Optimism, Budgets Expected to Grow 9.2% (September 13, 2010)

BtoB Magazine Online,  (September 13, 2010)

mediabistro.comSocial Media Spending Rises But Competition for Marketing Jobs Becomes More Fierce, Survey Says (September 10, 2010)

eMarketer.comB2C Marketing Outpacing B2B in Social Measurement (September 9, 2010)

SocialMediaBiz.com (reposted from HubSpot Blog)New CMO Survey Report Marketing Spending To Rise (August 31, 2010)

HubSpot BlogNew CMO Survey Report Marketing Spending To Rise (August 31, 2010)

BtoB Magazine Online,  (August 31, 2010)

MarketingPilgrim.comCMO Survey: Spend on Social Media Is Up; Hiring Prospects Are Down (August 31, 2010)

Printing Impressions (PIworld.com)CMO Survey Finds Marketers More Optimistic About Revenue Prospects (August 31, 2010)

Europe

Social Media España (reposted from eMarketer.com), B2C Marketing Outpacing B2B in Social Measurement (September 9, 2010)

Middle East

Dubai City Guide, Social Media to Take Up 18% of US Marketing Budgets (undated, 2010)

Azzaman, Social Media to Take Up 18% of US Marketing Budgets (September 19, 2010)

Oman Daily Observer,CMOs Find Strong Trends in Social Media Marketing (September 18, 2010)

Zawya.com (reposted from Saudi Gazette Internet Edition),  (September 16, 2010)

Saudi Gazette Internet Edition,  (September 16, 2010)

Assabah, Marketers To Nurture Customer Relationships and Invest in Social Media (September 15, 2010)

Al Qabas, Social Media Control 18% of Marketing Budgets in The USA (September 15, 2010)

Al Bayan, Social Media to Take Up 18% of US Marketing Budgets (September 15, 2010)

Business Intelligence Middle East, Social Media To Take Up 18% of US Marketing Budgets (September 14, 2010)

February 2010 Coverage

eMarketer.com, Nearly Three-Quarters of Marketers Have Social Strategy (August 27, 2010)

Teradata Magazine, Social Media Explosion (August 2010)

Brian Solis Blog, Social Media Spend to Double This Year (July 30, 2010)

Darryl McDonald, Vision 2.0, Take Back Your Marketing Voice (July 13, 2010)

VMarketing China, Overall Optimism among Marketers Grows (July 2010)

Marketing Management, Up, Up, and Away (Summer 2010)

Social Media Examiner, 3 New Studies Prove Social Media Marketing Growth (March 29, 2010)

Connected Marketer, Social Media Spend Doubles (March 12, 2010) – CMO Survey Results

Marketing Profs, CMOs to Ramp Up Hiring, Budgets; Double Social Media Spend (March 8, 2010)

ConversationAgent, Two New Surveys Validate Companies Adoption of Social Media (March 4, 2010)

ScottMonty.com, Social Media Marketing Spending Spirals Up (March 3, 2010)

eMarketer, Marketing Budgets Spiral Towards Social (March 2, 2010)

CMO Survey: Marketers To Hire Again; Remain Focused On Social Media

DURHAM, N.C. — Top marketing officers at U.S. companies plan significant hiring increases over the next two years as they remain optimistic about prospects for their firms and the U.S. economy, a new survey has found.

The February 2010 CMO Survey is a nationwide poll of chief marketing officers conducted twice each year by Duke University’s Fuqua School of Business in conjunction with the American Marketing Association. The survey collected responses from 612 marketing executives during the last two weeks of January.

Nearly half of companies say they expect to hire new marketers during the next six months, while 60 percent will do so in the next year and almost 90 percent over the next two years.

Firms plan to increase hiring levels by 8 percent in the next six months, 13 percent during the next year, and 24 percent over the next two years.

Experienced marketers with skills related to Internet marketing, innovation and growth, and customer relationship and brand management will be the most sought after by survey respondents.

“Marketing hiring has been flat in recent years,” said Fuqua professor Christine Moorman, director of the survey. “This is an especially welcome sign of a return to better days in the marketing community.”

The biggest increase in marketing hiring is expected among business-to-business (B2B) product companies, while B2B services companies predict the smallest hiring growth. Consistent with this, B2B services marketers report the highest expected increase in outsourced marketing activities.

“B2B services companies also report that Internet marketing skills are particularly important to them at this time, which may explain their focus on outsourcing to established companies instead of hiring in-house staff,” Moorman said.

Overall optimism among marketers continues to grow, with 62 percent reporting their optimism about the U.S. economy has increased since last quarter, and nearly 64 percent feeling more optimistic about their own companies than they did last quarter. By contrast, in the August 2009 survey, marketers felt upbeat about the economy (59 percent) but less so about their own companies (48.2 percent).

“Marketers are beginning to see the signs of a rebound within their own companies,” Moorman said. “It’s no longer in the tea leaves; it’s showing up at their own cash registers. This is the strongest sign we have seen yet.”

This optimism is also reflected in respondents’ expectations for customer behavior, with 66 percent of firms anticipating increased volume in customer purchases, and 26 percent expecting higher prices. Nearly half of firms (47 percent) also expect an increase in the number of new customers in their markets, and 45 percent believe they have improved their abilities to retain current customers.

Overall, marketing budgets are expected to rise by 6 percent, the largest expected increase in a year. Internet marketing expenditures will account for the largest share of this increase, while traditional advertising will continue to drop off. Moorman points out that spending on brand and customer management – “the blocking and tackling of marketing” – continues to rise. “Without customer and brand, it’s hard to survive long,” she said.

Social media continues to emerge as a central component of Internet marketing strategies. Firms currently allocate 6 percent of their marketing budgets to social media, an allotment they expect to increase to 10 percent during the next year and 18 percent over the next five years.

B2B services companies report the largest planned increases in social media spending, from 7 to 11 percent of overall marketing budgets, over the next year. This trails similar increases already made by business-to-consumer services companies, which increased social media spending from 3 to 7 percent between August 2009 and February 2010.

“Even though many are still experimenting and learning how best to use social media tools, these results indicate that marketers think social media marketing is here to stay and will play an increasingly important role in their work in acquiring and retaining customers in the future,” Moorman said.

Survey respondents were also asked to recognize companies they consider to be marketing leaders that set the standard for excellence across all industries. Apple, Procter & Gamble and The Coca-Cola Co. were the top vote-getters, and will receive the “CMO Survey Award for Marketing Excellence.” P&G and Apple have won the award three times and The Coca-Cola Co. twice.

“These three companies are perennial favorites among survey respondents,” Moorman said. “Each has demonstrated a keen balance of proven marketing programs with a sophisticated approach to the adoption of social media and other new developments, and provide us all with opportunities to learn from their successes.”

Other findings of the survey include:

— Marketing channels show a similar economic rebound, with partners expected to increase level and range of products and services as well as prices paid.

— Companies plan to increase market research and intelligence activities by 7 percent, indicating firms are investing in activities to identify new growth opportunities especially those involving diversified growth.

— 72 percent of firms currently outsource some aspect of their marketing programs, and 41 percent expect to increase outsourcing over the next year.

Detailed results, including tabular summaries of results and results by firm and industry characteristics, are available at www.cmosurvey.org.


About the survey: 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. Founded in August 2008, the survey is administered twice each year, with questions repeated over time to discern trends. The next survey will be in August.

August 2009 Coverage

Bootcamp Digital, 81% of Firms are Using Social Media for Marketing – CMO Survey (May 26, 2010)

Marketing Management, Look Both Ways (November/December 2009)

The Tennessean , American Advertisers Begin to Come Out of Shells (September 7, 2009)

The Expertise Marketplace, Sales and Marketing Working as Equals (September 3, 2009)

StarkSilverCreek.com, (August 27, 2009)

KOMarketing Associates, (August 27, 2009)

Gaebler.com, Spending on Social Media Marketing to Continue Rising, Survey Finds (August 27, 2009)

B2B Lead Nurture Engine, Duke/AMA CMO Survey Indicates Optimism for the Future (August 27, 2009)

eMarketer.com, CMO Sentiment Looking Up (August 26, 2009)

HispanicAd.com, Marketers Prepare for Better Times Ahead – Increase Focus on Social Media Strategies (August 24, 2009)

Marketing Power, CMO Survey Reveals Jump in Optimism and Social Media Spending (August 14, 2009)

DreamGrow Digital, Two-Thirds of US Marketers Use Social Media (August 12, 2009)

Duke News, CMO Survey: Marketers Prepare for Better Times Ahead (August 10, 2009)

CMO Survey: Marketers Prepare for Better Times Ahead

DURHAM, N.C. — Chief marketing officers in the United States are increasingly optimistic about the economy and their customers’ purchasing activities, and are embracing the power of social media as they seek to promote their brands and attract new customers.

These are some of the results of the August 2009 CMO Survey, conducted by professor Christine Moorman of Duke University’s Fuqua School of Business in conjunction with the American Marketing Association. The survey results reflect the responses of 511 top marketing executives of U.S. companies who were polled during the last two weeks of July.

Overall, 59 percent of marketers are more optimistic about the U.S. economy than they were just one quarter ago. They also report improved expectations for revenue growth, with 47 percent feeling more optimistic about prospects for revenue from end customers and 39 percent more optimistic about revenue from channel partners (who resell products to end customers) than they were just three months ago.

Marketers anticipate an acceleration in customer activity over the next year, with 48 percent expecting an increase in purchase volume, 44 percent looking forward to customers buying more related products and services and 35 percent predicting an increase in new customers entering the market.

The recessionary belt-tightening is not over, however. Price remains the most frequently reported top priority for customers, with 34 percent of top marketers ranking it as their customers’ top priority, followed by trusting relationships with companies (20 percent) and superior product quality (19 percent).

“These results indicate that marketers believe the tide had begun to turn,” Moorman said. “However, they are clearly aware that the recession has caused customers to become more price sensitive and companies are wisely keeping that in mind as they make product and marketing decisions.”

Marketers continue to report a shift in spending away from traditional advertising (with a planned overall decrease of 8 percent) and toward Internet marketing, where they expect to increase investments by 10 percent. They report plans to increase spending on social media efforts by more than 300 percent in the next five years, increasing their marketing budget allocations for social media from 3.5 percent to 13.7 percent over the next five years. Social networking (65 percent), video and photosharing (52 percent) and blogging (50 percent) dominated firms’ social media patterns. Survey respondents report the five most frequently reported uses for social media tactics are brand building, customer acquisition, new product introductions, customer retention and market research.

CMOs report plans to increase spending on marketing consulting services by 1 percent (compared to February 2009 plans to reduce consulting spending by 5 percent) and a slight uptick (from 2 percent to 3 percent) in planned spending on marketing research and intelligence. Marketing hiring is flat except in the Business-to-Business Services (+3.5 percent) and Business-to-Customer Product (+1.6 percent) sectors.

“When we last polled these companies in February, they were cutting back on all but the most critical functions,” Moorman said. “The positive change in spending on market research and consulting services indicates that they are making preparations for future growth in the market.”

The survey also asked top marketers to identify firms across all business sectors that they regarded as having exceptional marketing capabilities. The most frequently cited firms, which will receive the August 2009 “CMO Survey Award for Marketing Excellence,” were Apple Inc. and The Procter & Gamble Company.

“These firms are consistently recognized by their peers for excellence in marketing,” Moorman said. “Moreover, they have not sat still through this tough economic period. Instead, they have upped the ante on their value propositions by innovating and getting closer to their customers.”

Other key findings of the CMO Survey include:

— Russia and Eastern Europe are the regions where marketers expect the most future growth to occur, with significant decreases in opportunities in Canada, Mexico and Western Europe.

— CMOs expect the majority of firm growth to occur internally, with 70 percent of growth spending allocated to internal growth strategies, 13 percent to partnerships, 10 percent to acquisitions and 7 percent to licensing.

— Despite economic pressures, there has been little turnover in CMO positions this year; top marketers report having been in their positions for an average of 4.3 years — unchanged from February.

The CMO Survey Results
View the slides that explain them
View more documents from FuquaMarketing.

Detailed results, including tabular summaries of results and results by firm and industry characteristics, are available at: faculty.fuqua.duke.edu/cmosurvey/survey_results/.
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About the survey: 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. Founded in August 2008, the survey is administered twice each year, with questions repeated over time to discern trends. The next survey will be in February 2010 with a bonus section on Marketing and Return On Investment. The survey will be expanded to include European CMOs beginning in 2011 and Asian CMOs in 2012.

February 2009 Coverage

BizJournals, (July 24, 2009)

Expertise Marketing, A CMO survey that includes B2B services! (July 28, 2009)

Training Magazine, (June 10, 2009)

Marketing Management, CMO Pessimism Waning (May/June, 2009)

eMarketer, What Are CMOs Thinking? (March 17, 2009)

Cure For Common Marketing, What Do Leading B2B Marketers See in 2009 That You Don’t? (April 1, 2009)

KoMarketing Associates, (February 28, 2009)

Adweek/Brandweek, (February 27, 2009)

Bluhalo, (February 27, 2009)

Marketing Pilgrim, (February 26, 2009)

MediaPost, CMOs Look To Web for Improved ROI (February 26, 2009)

Duke University, Survey: Marketers Cut Traditional Spending, Focus On New Opportunities (February 25, 2009)

Herald Sun, Duke Business Survey Finds Less Optimism (February 25, 2009)

Ascribe, CMO Survey: Marketers Cut Traditional Spending, Focus on New Opportunities and Innovation (February 25, 2009)

cnet, The New Permanent Crisis of Marketing (February 6, 2009)

August 2008 CMO Survey Coverage

August 2008 CMO Survey Coverage

CONTRACTORmag.com, Can America Afford Not to go Green? (January 1, 2009)

Marketing Management, CMOs Extremely Pessimistic about the Future, New CMO Survey Finds (November/December, 2008)

Marketing News, CMOs Take the Market’s Pulse (November 15, 2008)

Brandweek, (September 23, 2008)

Sustainable Life Media. Marketers Chucking Green Campaigns As Economy Slows (September 16, 2008)

AdvertisingAge, Economic Blues Leave no Room for Green: CMO Study Finds Focus on Environmentalism Waning in Tough Times (September 15, 2008)

Brandweek, (September 11, 2008)