The CMO Survey Report February 2014 - Highlights and Insights

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Information about The CMO Survey Report February 2014 - Highlights and Insights
Marketing

Published on February 19, 2014

Author: christinemoorman

Source: slideshare.net

Description

Depicts key survey results and offers trends over time. You can see a slide show of this report below.

About The CMO Survey Mission - To collect and disseminate 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 society. - The survey is an objective source of information about marketing. It is a non-commercial operation dedicated to the field of marketing, not the sale of products and services. Survey Operation - Founded in August 2008, The CMO Survey is administered twice a year via an Internet survey. Many questions repeat to observe trends over time. - The February 2014 survey was the eleventh administration of The CMO Survey. Sponsoring Organizations 2

Survey Methodology Survey Sample - 4582 top U.S. marketers at Fortune 1000, Forbes Top 200, and top marketers who are AMA Members or Duke University Alumni and Friends - 408 responded for a 8.9% response rate Survey Administration - Email contact with four follow-up reminders - Survey in field from January 14, 2014 - February 4, 2014 - 88% of respondents VP-level or above Results Interpretation - M = sample mean; SD = sample standard deviation - B2B = Business-to-Business firms; B2C = Business-to-Consumer firms 3

Survey topics Topic 1: Marketplace Dynamics……………………………………………………… 5-11 Topic 2: Firm Growth Strategies…………………………………………………….. 12-16 Topic 3: Marketing Spending………………………………………………………… 17-28 Topic 4: Financial and Marketing Performance……………………………………. 29-34 Topic 5: Social Media…………………………………………………..…………….. 35-42 Topic 6: Marketing Jobs…………………………………………………………….... 43-46 Topic 7: Marketing Organization…………………………………………………….. 47-49 Topic 8: Marketing Leadership……………………………………………………..... 50-54 Topic 9: Marketing Analytics………………………………………………………..... 55-63 Topic 10: The CMO Survey Award for Marketing Excellence……………………. 64-66 4

Topic 1: Marketplace Dynamics

Marketer optimism for U.S. economy reaches highest point in 5 years Marketplace Growth Spending Social Media Performance Jobs Organization Leadership Analytics Figure 1.1. 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? Marketer Optimism About Overall Economy 80 70 63.4 63.3 60 50 56.5 57.8 65.7 66.1 Aug-13 Feb-14 62.70 58.40 55.6 52.2 47.7 40 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 6

Optimists almost quadruple since 2009 Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 1.2. Are you more or less optimistic about the overall U.S. economy compared to last quarter? Less Optimistic No Change More Optimistic 70% 60% 50% % of respondents 54.4% 59.3% 40% 32.3% 30% 25.7% 20% 14.9% 10% 13.3% 0% February 2009 February 2014 7

Optimism for US economy grows across all sectors Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Figure 1.3. Optimism for U.S. economy by sector February 2009 70 38% 66.2 February 2014 65.6 44% 45% 66.2 26% 64.1 60 50 48 45.3 46 B2B Services B2C Product 50.8 40 30 20 10 0 B2B Product XX% B2C Services Change between February 2009 and February 2014 8

Marketer optimism for own companies and overall economy closest in five years Marketplace Growth Spending Social Media Performance Jobs Organization Leadership Analytics Figure 1.4. How optimistic are you on a 0-100 scale with 0 being the least optimistic and 100 the most optimistic? Optimism for Overall Economy Optimism for Own Company 100 90 80 70 60 64.2 72.8 63.4 62.7 February 2011 February 2012 February 2013 72.4 73.2 66.1 57.8 50 40 73.2 63.3 70.0 47.7 February 2009 February 2010 February 2014 9

Positive customer metrics forecasted Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 1.5. Forecasted customer outcomes in next 12 months February 2013 February 2014 80% 74.7% 69.3% 70% 60% % of respondents predicting an increase 67.7% 59.7% 59.1% 59.3% 40% 49.6% 49.0% 50% 43.8% 42.3% 32.8% 34.3% 30% 20% 10% 0% Increased customer Increased customer Customers will buy Increased ability to purchase volume price per unit more related retain customers products and services from my firm Increased entry of new customers into the market Increased ability to acquire new customers 10

Customer priorities to shift to superior product quality Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 1.6. Customers’ top priority in next 12 months 35% 30% 25% % of respondents Low Price Superior Product Quality 20% Superior Innovation 15% Excellent Service Trusting Relationship 10% Brand 5% 0% August 2012 February 2013 August 2013 February 2014 11

Topic 2: Firm Growth Strategies

Firms decrease market penetration and move toward riskier growth strategies in next year Marketplace Growth Spending Performance Types of growth strategies Social Media Jobs Organization Leadership Analytics Table 2.1. How growth spending is expected to change* Existing Products/ Services New Products/ Services Existing Markets Market Penetration Strategy Product/Service Development Strategy New Markets Market Development Strategy Diversification Strategy Growth Strategy Actual Spending in Past 12 Months Expected Spending in Next 12 Months Percent Change Expected Market Penetration Strategy 52.9% 47.1% -11.0% Market Development Strategy 15.3% 17.0% +11.1% Product/Service Development Strategy 21.8% 24.3% +11.5% Diversification Strategy 10.0% 11.5% +15% * % of spending across growth strategies 13

Companies to increase organic growth and partnership strategies in next year Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Table 2.2. How firms will grow in the next 12 months* Strategy February 2014 Average B2B Product B2B Services B2C Product B2C Services Organic Growth 71.8% 70.4% 69.9% 79.5% 70.5% Growth via Acquisitions 10.2% 9.1% 12.3% 7.6% 11.8% Growth from Partnerships 12.8% 13.9% 13.9% 8.0% 12.2% Growth from Licensing 5.2% 6.6% 3.8% 4.8% 5.5% * Percentage of spending across growth strategies 14

Sales from international markets as a percent of overall company sales Marketplace Growth Spending Social Media Performance Jobs Leadership Organization Analytics Figure 2.1. Percent of company sales expected to be international in next 12 months 35% 32.4% 30% 25% 24.7% 20% 15% 18.7% 19.6% 19.3% 19.5% 20.5% February 2013 August 2013 22.5% 10% 5% 0% August 2010 February 2011 August 2011 February 2012 August 2012 February 2014 15

Canada, Western Europe, and China remain U.S. firms’ highest revenue growth markets Marketplace Growth Spending Performance Social Media Figure 2.2. Highest international revenue growth markets (% respondents) Eastern Europe 2% Korea 2% Middle East 2% Australia 3% India 3% Russia 3% Jobs Leadership Organization Analytics Figure 2.3. Average change in growth of highest revenue international markets 30% 25% Other: 13% Mexico 4% Japan 4% Southeast Asia 5% Brazil 7% Western Europe 26% 20% 19.7% 15.6% 15% China 15% Canada 12% 18.4% 10% 5% 0% February 2012 February 2013 February 2014 16

Topic 3: Marketing Spending

Marketing budgets rebound Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.1. Percent change in marketing budgets in next 12 months Change in Marketing Spending 12% 9.2% 10% 9.1% 6.7% 8% 8.1% 6.4% 5.9% 6% 6.7% 6.1% 4.3% 4% 2% 1.1% 0.5% 0% Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug- 13 Feb-14 18

Digital marketing spend vs. traditional advertising spend Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.2. Percent change in traditional advertising* spend in next 12 months Traditional Advertising Spend 15% 12.8% 11.2% 11.5% Digital Marketing Spend 10.2% 10.1% 10% 8.2% 5% 1.3% -0.8% 0% -0.1% -1.9% -2.7% -2.1% February 2013 August 2013 -5% August 2011 February 2012 August 2012 February 2014 *Refers to media advertising not using the web. 19

Industry differences in digital vs. traditional advertising spend Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 3.1. Change in digital and traditional advertising spending in next 12 months by sector B2B Product B2B Services B2C Product B2C Services Digital marketing spend +9.0% +7.4% +7.7% +8.2% Traditional advertising* spend -1.6% +0.2 +2.8% -1.3% *Refers to media advertising not using the web. 20

All other marketing spend categories remain positive, but slower growth expected Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 3.2. Percent change in marketing spending in next 12 months August 2012 February 2013 August 2013 February 2014 Overall marketing spending +6.4% +6.1% +4.3% +6.7% New product introductions +9.4% +8.0% +7.1% +7.8% New service introductions +6.4% +5.8% +4.9% +4.0% Customer relationship management +9.0% +8.1% +6.0% +5.1% Brand building +7.5% +6.8% +4.6% +4.9% 21

Investments in marketing knowledge continue to decrease Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.3. Changes in firm spending on marketing knowledge in next 12 months 10% Marketing research and intelligence 8% Marketing consulting services 6% Developing knowledge about how to do marketing* 4% Integrating what we know about marketing 2% Marketing training* 0% August… February… August… February… *Developing knowledge about how to do marketing refers to the development of new marketing capabilities, while marketing training involves transferring existing marketing knowledge to employees. 22

Marketing budgets represent 10% of overall firm budgets Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.4. Marketing budget as a percent of firm budget* 16% 14% 12% 10% 10.0% 10.4% August 2011 February 2012 11.4% 10.9% 10.6% 9.4% 8.1% 8% 6% 4% 2% 0% February 2011 August 2012 February 2013 August 2013 February 2014 *Question asked in Feb-11 for the first time. 23

Who has the biggest marketing budgets? Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Table 3.3a. Marketing percentage of firm budget by economic sector B2B Product February 2014 B2B Services B2C Product B2C Services 10.4% 8.7% 14.9% 11.4% Table 3.3b. Marketing percentage of firm budget by company sales revenue <$25 Million February 2014 $26-99 Million $100-499 Million $500-999 Million $1-9.9 Billion >$10 Billion 12.7% 12.6% 6.5% 6.6% 9.7% 7.8% Table 3.3c. Marketing percentage of firm budget by company internet sales 0% Internet Sales February 2014 1-10% Internet Sales >10% Internet Sales 9.4 10.8% 13.8% 24

Marketing spending as a percentage of firm revenues increases to 9.3% Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Figure 3.5. Marketing spending as a percentage of firm revenues 10% 9.3% 9% 9% 8% 7.9% 7.8% 8% 7% February… August… February… 25

Marketing spending as a percentage of firm revenues by firm and industry Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Table 34a. Marketing spending as a percentage of firm revenues by economic sector B2B Product February 2014 B2BServices B2C Product B2C Services 8.1% 5.8% 15.2% 11.0% Table 3.4b. Marketing spending as a percentage of firm revenues by company sales revenue <$25 Million February 2014 $26-99 Million $100-499 Million $500-999 Million $1-9.9 Billion >$10 Billion 13.9% 6.1% 5.9% 2.9% 6.7% 5.5% Table 3.4c. Marketing spending as a percentage of firm revenues by company internet sales 0% Internet Sales February 2014 1-10% Internet Sales >10% Internet Sales 6.2% 7.8% 18.6% 26

Companies lack quantitative metrics to demonstrate impact of marketing spending Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.6. Short-term and long-term impact of marketing spent on business Which best describes how your company shows the short-term impact of marketing spend on your business? Which best describes how your company shows the long-term impact of marketing spend on your business? 60% 50.0% 50% 40% 30% 51.5% 35.7% 28.6% 19.9% 20% 14.3% 10% 0% We prove the impact quantitatively We have a good qualitative sense of the impact, but… We haven't been able to show the impact yet 27

B2C Product companies demonstrate the impact of marketing quantitatively Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 3.7. Sectors that prove short-term and long-term impact of marketing quantitatively Companies that prove the short-term impact of marketing quantitatively Companies that prove the long-term impact of marketing quantitatively 70% 64.9% 60% 50% 39.5% 40% 30% 33.8% 28.2% 30.0% 25.0% 37.1% 20.0% 20% 10% 0% B2B Product B2B Services B2C Product B2C Services 28

Topic 4: Financial and Marketing Performance

Company performance on financial metrics stable ~ 3-4% increase Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 4.1. Percent change in firm performance in prior 12 months Firm sales Firm profits Marketing ROI 5% 4.1% 4% 3.9% 3.4% 3.3% 3% 3.1% 3.0% August 2013 February 2014 2% 1% 0% 30

Performance on key customer and brand assets also holds Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 4.2. Percent change in performance on customer and brand metrics in prior 12 months Customer acquisition 4% 3.4% 3% Customer retention Brand value 3.6% 3.5% 3.1% 2% 2.0% 1.9% August 2013 February 2014 1% 0% 31

Company performance by sector Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 4.1. Sector performance metrics for prior 12 months B2B Product B2B Services B2C Product B2C Services Firm sales +3.6% +5.1% +3.6% +2.7% Marketing return on investment +3.6% +3.2% +3.1% +4.5% Firm profits +2.2% +3.4% 3.2% +3.3% Customer acquisition +3.8% +3.9% +2.5% +3.6% Customer retention +1.5% +2.5% +1% +2.9% Brand value +2.8% +3.7% +3.5% +5.4% 32

Firm performance goals remain strong Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 4.2. Company performance and goals Actual firm performance in prior 12 months Goal in the next 12 months Expected change in next 12 months Firm sales 3.9% 6.8% +74.4% Marketing return on investment 3.4% 5.3% +55.9% Firm profits 3.0% 5.9% +96.7% Customer acquisition 3.6% 6.1% +69.4% Customer retention 1.9% 4.3% +126.4% Brand value 3.5% 5.4% +54.3% 33

Marketing excellence ratings improve! Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 4.3. How would you rate your company’s marketing excellence? 40% Marketing excellence over time 34.4% 35% • Feb-2014: Mean = 4.7 (SD = 1.4) 30% • Aug-2013: Mean = 4.5 (SD = 1.4) 25% • Feb-2013: Mean = 4.5 (SD = 1.4) 20% • Aug-2012: Mean = 4.4 (SD = 1.4) 14.7% 15% 15.4% 11.1% 10% 5% 16.1% 7.2% 1.1% 0% 1=Very Weak 2=Weak 3=Fair 4=Good 5=Strong 6=A leader, but 7=Excellent, one not one of of the best in the best the world 34

Topic 5: Marketing and Social Media

Social media spending expected to be 18% of marketing budgets in five years Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 5.2. Social media spending as a percentage of marketing budgets 25% 20% 18.1% % of total marketing budget 15% 10% 10.1% 7.4% 5% 0% Current Levels Over Next 12 Months In Next 5 Years 36

Social media spending across sectors Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 5.1. Changes in social media spending across sectors B2B Product B2B Services B2C Product B2C Services Overall Current Social Media Spending 6.9% 7.2% 7.7% 8.9% 7.4% Social Media Spending in the next 12 months 9.7% 9.5% 10.4% 11.4% 10.1% Social Media Spending in the next 5 years 17.4% 18.4% 17.2% 20.3% 18.1% 37

Human capital related to social media: Slow to grow, 2:1 internal to external Marketplace Growth Spending Social Media Performance Figure 5.2. Employees performing social media in companies Jobs Leadership Organization Analytics Table 5.2. Average number of employees by sector In-house social media employees In-house social media employees Outsourced social media employees 4.1 Outsourced social media employees 4.0 B2B Product 4.1 2.0 3.0 B2B Services 4.1 1.5 B2C Product 5.7 3.9 B2C Services 4.9 2.1 2.0 1.0 2.4 1.7 2.1 1.1 1.3 Feb-2013 August 2013 0.0 February 2014 38

Social media integration gap remains Marketplace Growth Spending Performance Social Media Figure 5.3. How well is social media integrated with marketing strategy? Jobs Organization Leadership Table 5.2. Integration scores by sector B2B Product Mean (SD) Feb-2014 3.5 B2B Services 3.6 B2C Product 4.3 B2C Services 3.7 Mean = 3.8 (SD = 1.8) 25% 20% 22.0% 17.0% 14.8% 14.0% 15% Analytics 14.0% 11.4% 10% 6.8% 5% 0% 1 Not at all Effectively 2 3 4 5 6 7 Very Effectively 39

Social media remains poorly integrated with marketing strategy Marketplace Growth Spending Social Media Performance Jobs Organization Leadership Analytics Figure 5.4. Average social media integration scores over time Question: How effectively is social media linked to your firm’s marketing strategy? (1=not integrated, 7=very integrated) 7 6 5 4 3.8 3.8 3.8 3.8 3.9 3.8 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 3 2 1 Feb-11 40

Persistent poor integration of customer information across channels Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Question:. How effectively does your company integrate customer information across purchasing, communication, and social media channels (1=not at all, 7=very effectively)? Results: • Feb-14: Mean = 3.5, SD = 1.6 • Aug-13: Mean = 3.4, SD = 1.6 • Aug-12: Mean = 3.7, SD = 1.6 Table 5.4. Customer information integration gap across sectors Average integration across all channels Mean (SD) B2B Product 3.4 (1.7) B2B Services 3.4 (1.6) B2C Product 4.1 (1.5) B2C Services 3.7 (1.7) 41

Half of all firms haven’t been able to show the impact of social media on business Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 5.5.. Which best describes how you show the impact of social media on your business? We haven’t been able to show the impact yet 15.9% We have proven the impact quantitatively 49.2% 34.8% We have a good qualitative sense of the impact, but not a quantitative impact 42

Topic 6: Marketing Jobs

Marketing hiring drops off Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 6.1. Percentage change in marketing hires planned in next 12 months 7% 6.2% 6% 5.2% 5.4% February 2012 February 2013 4.7% 5% 4% 3% 2% 1% 0% February 2011 February 2014 44

B2B companies to hire more marketers Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 6.2. Percentage change in marketing hires planned in next 12 months February 2013 February 2014 7% 5.9% 6% 5% 5.2% 4.9% 4.4% 4% 3.1% 3% 3.4% 2.3% 2.2% 2% 1% 0% B2B Product B2B Services B2C Product B2C Services 45

Outsourcing of marketing 3.1% Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 6.3. Percentage of company marketing expected to be outsourced in next 12 months 14% 12% 9.3% 10% 8% 6% 4.3% 4.5% 3.2% 4% 3.1% 3.5% August 2012 February 2013 2.6% 3.1% August 2013 February 2014 2% 0% August 2010 February 2011 August 2011 February 2012 46

Topic 7: Marketing Organization

Presence of marketing employees surges Marketplace Growth Spending Performance Figure 7.1. Number of Employees Social Media Jobs Organization Leadership Analytics Figure 7.2. Marketing Employees as a Percentage of Total Employees 10% 9000 8800 8600 8400 8200 8000 7800 7600 7400 7200 7000 Marketing Marketing Employees (90) employees (526) 8% 6.3% 6% 4.2% Non-marketing employees Non-Marketing (8318) Employees 4% 2% (7690) 3.1% 1.1% 2.5% 1.2% 0% August Febrary August Febrary August Febrary 2011 2012 2012 2013 2013 2014 48

Product/service organizational structure dominates Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 7.3. Organizational structure in companies 80% 73.3% 70% 60% % of firms 50% 40% 30% 26.7% 20% 10% 0% Customer Groups Product/Service Groups 49

Topic 8: Marketing Leadership

Consistent erosion of marketing leadership Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Table 8.1. Percentage of companies in which marketing leads activity* Activity Feb-11 Feb-12 Feb-13 Feb-14 Advertising Positioning Promotion Brand Marketing analytics** Marketing research Social media Competitive intelligence Public relations Lead generation Market entry strategies New products CRM Targeting/Market selection Sales Pricing Innovation Customer service Stock market performance 85% 79% 81% 81% 73% 71% 58% 65% 53% 50% 44% 38% 31% 32% 30% 33% 22% 0.4% 85% 78% 79% 84% 71% 73% 62% 53% 53% 46% 52% 41% 35% 30% 34% 39% 21% 1.2% 84% 82% 82% 84% 76% 76% 76% 68% 61% 56% 56% 47% 41% 36% 24% 31% 35% 24% 2.3% 79.9% 69.2% 74.8% 79.1% 68.4% 63.2% 74.4% 52.6% 59.8% 55.6% 47.9% 46.4% 33.3% 33.3% 29.5% 32.9% 29.5% 18.8% 1.3% * Red indicates marketing’s influence has decreased, green indicates that marketing’s influence has increased, and changes of 1% or less are viewed as no change. **Marketing analytics added in Feb-13. Weaker marketing leadership: • Advertising • Positioning • Promotion • Brand • Marketing analytics • Marketing research • Social media • Competitive intelligence • Public relations • Market entry • CRM • Target/Market selection • Innovation • Customer service Stronger marketing leadership: • Sales • Pricing Maintaining marketing leadership: • Lead generation • New products • Stock market performance 51

Marketing leaders retained for an average of 4.6 years Marketplace Growth Spending Social Media Performance Jobs Leadership Organization Analytics Figure 8.1. Marketing leader retention Years top marketer in current role in the firm 12 10.5 10 8 Years top marketer in any role in the firm 9.0 8.0 6 9.2 8.8 5.4 4.3 4.6 4.3 Aug-2009 Aug-2010 Aug-2011 4.1 9.5 10.0 4.8 5.1 Feb-2013 Aug-2013 9.4 4.6 4 2 0 Feb-2012 Aug-2012 Feb-2014 52

Shifting direct and indirect influence for top marketers Marketplace Growth Spending Social Media Performance Jobs Organization Leadership Analytics Figure 8.2. Number of people reporting to top marketer Number of direct reports Number of indirect reports 30 25.4 25 20 17.0 24.6 17.5 15.4 16.1 15 10 5 7.2 7.3 Aug-2010 Aug-2011 8.6 6.0 5.6 6.9 0 Feb-2012 Aug-2012 Feb-2013 Aug-2013 53

Best Practices from Marketing Leaders: See full interviews at www.cmosurvey.org/cmo-insights/ Senior Vice President and Chief Marketing Officer Beth Comstock discusses how GE approaches marketing: “You have to create a platform that invites innovative ideas.” This platform involves four capabilities that have produced an array of new products, services, customers, and business models. Chief Marketing Officer Kim Feil discusses how she built a marketing function. From insights to accountability, she describes the organization, processes, metrics, and talent management strategies important to this effort. Executive Vice President and Chief Marketing Officer Geert van Kuyck shares ideas on building the essential skill set for CMOs and the importance of defining the CMO’s mission. He discusses the use of the Net Promoter Score and other metrics to evaluate business results at Philips, touching on Philips’ engagement with LinkedIn and social media metrics. Executive Vice President and Chief Marketing Officer Stephen Quinn describes how Walmart rebuilt its customer focus. Key steps involved harnessing internal support, generating market insight, using customer-focused metrics, living the brand internally, and building marketing talent. Global Marketing Officer Marc Pritchard shares views on how marketing contributes to P&G’s performance. He talks about how P&G learns about customers and how it is relentless in its attention to building loyal customers and strong brands in the store, on the web, and around the world. 54

Topic 9: Marketing Analytics

Spending on marketing analytics expected to increase 72% in three years Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 9.1. Percent of marketing budget spent on marketing analytics 14% 12.2% 12% 10% 8% 7.1% 6% 4% 2% 0% Current Levels In Next 3 Years 56

Spending on marketing analytics by firm and industry characteristics Marketplace Growth Spending Performance Table 9.1a. Firm sector differences Jobs Organization Leadership Analytics Table 9.1c. Firm size differences B2B Product 7.9% In Next 3 years 12.7% B2B Services 5.6% 11.4% B2C Product 9.9% 12.7% B2C Services 7.2% 12.9% Current Social Media Table 9.1b. Firm internet sales differences 0% 6.4% In Next 3 years 11.6% 1-10% 7.5% 8.0% In Next 3 years <$25M 5.5% 10.5% $26-99M 6.2% 10.7% $100-499M 6.6% 11.4% $500-999M 9.9% 16.1% $1-9.9B 8.5% 13.8% $10+B 7.6% 13.1% 12.4% >10% Current 13.6% Current 57

Most projects fail to use marketing analytics; slight shift upwards Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 9.2. Percentage of projects using available or requested marketing analytics 100% 80% 60% 40% 37% 35% 30.4% 29% Feb-2013 Aug-2013 32.5% 20% 0% Feb-2012 Aug-2012 Feb-2014 58

Contribution of marketing analytics remains low Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 9.3. To what degree does the use of marketing analytics contribute to your company's performance? 1 = Not at all and 7 = Very highly 7 6 5 4 3.9 3.7 3.5 3.7 3 2 1 Aug-2012 Feb-2013 Aug- 2013 Feb-2014 59

Breakdown of marketing analytics’ contribution to company performance Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Figure 9.4. To what degree does the use of marketing analytics contribute to your company's performance? Mean = 3.7 (SD = 1.9) 25% 20% 16.2% 16.2% 17.4% 15% 16.2% 13.7% 12.9% 10% 7.5% 5% 0% 1 Not at all 2 3 4 5 6 7 Very highly 60

Most companies do not have the right talent to fully leverage marketing analytics Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Figure 9.5. Does your company have the right talent to fully leverage marketing analytics? Mean = 3.6 (SD = 1.7) 30% 24.5% 25% 18.4% 20% 18.0% 15.9% 15% 10% 9.0% 8.2% 6.1% 5% 0% 1 Does not have the right talent 2 3 4 5 6 7 Has the right talent 61

Marketing analytics talent difficult to find Marketplace Growth Spending Performance Social Media Jobs Leadership Organization Analytics Figure 9.6. How challenging was it to find the right marketing analytics’ talent* Mean = 4.8 (SD = 1.5) 30% 24.2% 25% 25.3% 17.9% 20% 15.8% 15% 10% 5% 7.4% 7.4% 2 3 2.1% 0% 1 Not at all challenging 4 5 6 7 Extremely challenging *Answered by respondents stating they had hired marketing analytics talent in the last year 62

How companies measure marketing ROI Marketplace Growth Spending Performance Social Media Jobs Organization Leadership Analytics Figure 9.7. How companies measure marketing ROI Lead generation to sales metrics 2% We don’t measure marketing ROI 15% Manager judgments 27% Experiments 16% What percent of your marketing budget do you spend measuring your marketing ROI? Mean = 3.5% (SD = 5.1) Econometric modeling 18% Customer surveys 22% 95% Confidence interval around the mean = 2.8%-4.2% 63

Topic 10: The CMO Survey Award for Marketing Excellence

The 2014 CMO Survey Award for Marketing Excellence – Overall Winner Participants were asked to nominate a company in response to the question: Which company across all industries sets the standard for excellence in marketing? Apple, Inc. 65

The 2014 CMO Survey Award for Marketing Excellence – Industry Winners Participants were asked to nominate a company in response to the question: Which company in your industry sets the standard for excellence in marketing? Amazon GEICO Google (Online Retailer) (Consumer Services) (Online Advertising) IBM Procter & Gamble The Coca-Cola Company (Technology Solutions/Consulting) (Consumer Packaged Goods: Non-food) (Consumer Packaged Goods: Food) 66

Preview Next survey: July 2014 Participate: Sign up here Media: Press releases and coverage Feedback: Send comments to moorman@duke.edu 67

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