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Results from the February 2020 CMO Survey are in. The survey, administered bi-yearly online, covers the opinions of top marketers on budgets, firm capabilities, and social media. Here we’re covering the survey’s most important findings.
Marketing budgets will increase, but not as much as last year’s prediction. The survey found that marketing budgets are expected to grow by 7.6 percent in 2021, a decline compared with last August’s 8.7 percent growth. Marketing budget as a percent of firm revenues will grow to 8.6 percent, a nine percent increase since 2018, while marketing budget as a percent of firm budget remains consistent at 11.3 percent.
Digital marketing is growing faster than traditional marketing with brands spending nine percent on customers, 7.1 percent on brands and 6.1 percent on product innovation. Marketers are spending 15.2 percent of the budget on customer experience, a 71 percent increase over the last three years.
Marketing capability development remains the top marketing knowledge priority for service companies, even more than product companies, at 12.7 percent followed by marketing consulting services at 11.2 percent.
Marketers are investing 54 percent of spending on existing markets and offerings while diversification remains the lowest growth strategy. Companies are continuously focusing on domestic marketing with a 13 percent increase observed since 2012.
Current budget spending on China is at 2.1 percent, up 1.7 percent three years ago. Marketers plan to increase Chinese budgets 100 percent to 4.2 percent in three years with the biggest spenders in mining and tech.
When data was collected for this survey in January, Chinese budgets were expected to exponentially grow. However, the outbreak of the Coronavirus may eventually slow international spending given the disruption of consumer spending in China, as cities are currently being described as ghost towns. Similarly, an outbreak in the US could disrupt consumer spending here, which accounts for 70 percent of the economy.
Internet sales as a percent of revenues are at the highest level in a decade at 13.5 percent. The space is dominated by B2C companies at 18.1 percent.
Social media remains important for marketers as spending grew to 13 percent of marketing budgets, the second-highest point in CMO Survey history. Companies with 10 percent of internet sales dedicate more than twice the spending on social media than those with no internet sales. Outside agencies now perform about a quarter of all social media activities, the highest level reported since the question was first asked in 2014.
Across all industries and company sizes, social media spend for companies will increase by 62 percent over five years. Despite this, marketers continue to rate it as contributing only moderate value to company performance (3.4 on a seven-point scale).
Mobile spend also continues to rise and is expected to grow 73 percent over the next five years, with companies citing social ads the highest spend on mobile. Companies that sell at least 10 percent online see the most value with mobile, averaging 4.1 percent compared to a 2.7 average for companies that don’t sell online. Difficulty tracking customers across the mobile journey is the top challenge for companies.
Among the quality of companies’ marketing knowledge resources, companies ranked marketing capabilities highest, followed by customer insights than competitive intelligence. Online sellers rated their marketing knowledge resources as higher in quality, dominated by analytics and intelligence.
Survey results are based on a sample of 265 top marketers at for-profit US companies, 98 percent of which include responses from vice president level or above, surveyed from January 7-28, 2020.
This article first appeared on a.list