The CMO Survey – August 2019


– Here are my top 10 results
from he August 2019 CMO Survey. These results are based on a sample of 341 top marketers at
for-profit U.S. companies, 95% of whom hold a position
of VP-level or higher. Marketing budgets are
expected to grow by 8.7% in the next year, nearly reaching the eight-year
high of 8.9% from 2017. Now, this compares to a 6.3% actual increase in the last year. Consistent with this, marketing
budgets as a percentage of overall firm budget
matches its highest level in the history of The CMO Survey at 12%, which is also 9.8% of
overall firm revenues. Three important findings
related to marketing leadership emerged from the August 2019 CMO Survey. First, although 73.5% of marketing leaders are unlikely to use their
brands to take a stance on politically-charged issues, this percentage is trending
down from the 82.6% who reported being unwilling
in the February 2018 survey. B2C companies are most
likely to take a stance. Second, marketing leaders
believe that new technologies have actually strengthened the importance of marketing in their companies,
scoring an average of 2.75 on a scale where plus seven
is significantly strengthened and negative seven is
significantly weakened. On the negative side, two out
of three marketing leaders state that they tend to focus on “managing the present” rather than
“preparing for the future.” Let’s hope that the use of
new technologies in marketing will begin to shift marketers to a more forward-looking focus. Budget spent on marketing
analytics has grown steadily over the last three years,
rising from a low of 4.6% of marketing budgets in 2017
to the current level of 7.2%. This level is expected to grow by 61% over the next three years to reach 11.6% of marketing budgets. Contributions of analytics to performance remain moderate, however. And one reason for this
weakness may be that only 40% of marketers report having
quantitative tools to demonstrate the impact of marketing spend on their company’s performance. Now, the silver lining
of this is that this is the highest reported
use of quantitative tools in the history of The CMO Survey. Marketing leaders report
a 27% increase in the use of artificial intelligence and machine learning in their
toolkits over 2018 levels and they expect this level to increase another 60% within the next three years. These rates are even
higher for larger companies and for companies with a larger proportion of their sales through the internet. The top uses of AI in marketing involve AI for content personalization, predictive analytics
for customer insights, and targeting decisions. The adoption of blockchain technologies in marketing is slower, with no real growth over 2018 figures. When asked to compare their
customer experience performance, or CX performance, to competitors, marketers generally rate
their companies poorly on various customer experience activities. Specifically, they report above
average performance only on assuring customer experiences
are compatible with the brand. Eleven other key CX
activities are rated on par or below competition. Combining their top challenges and weak competitive performance, the biggest opportunities
for CX improvement appear to lie in, first, developing the necessary
capabilities to design, deliver, and monitor the customer experience, and two, integrating
touchpoints seamlessly across the entire customer journey. Societal metrics measuring the degree to which marketing benefits society and the impact of marketing
on the ecological environment show no gains over an eight-year period. This is really surprising given
the pressure that customers and other stakeholders are placing on companies to create this type of value. Where’s the resistance, and
how can companies move forward and make gains in this important area? It might be worth studying
the education sector, which rates itself 20% above the average of other sectors on these metrics. Spend on mobile has trended
upwards over the past five years from 3.2% of marketing budgets to 12.8% in this August 2019 CMO Survey. This level is expected
to continue to rise, growing 71% over the next five years to 21.8% of marketing budgets. Customers are expected to
prioritize excellent service and superior product quality in 2020, while pressures for low price have dropped since the last Survey. Although companies continue to build new marketing capabilities
by training current employees or hiring new employees
with needed skills, about 54% of firms, this number has decreased
from the August 2018 survey. Partnering with agencies and consultancies to
build these capabilities has, in turn, risen. Marketing hiring is expected
to increase with a 6.2% change in marketing hires planned
for the next 12 months. B2C services companies expect
to hire the most at 8.6%. In response to the
question, to what extent are new technologies
replacing marketing employees, almost 58% reported not at all currently, but this number is expected to drop to 37% in the next three years. B2C services companies
report the most replacement. I’ll offer a deeper dive on these results over the next six months, so stay tuned for more analysis and recommendations at cmosurvey.org.