Page 17 - AeM_Nov_2017

RESEARCH, ANALYSIS & TRENDS

"The risk is that CMOs are either being too nearsighted
to be strategic or too visionary to deliver against market-
ing's objectives," said Mr. McIntyre. "The result is a lack
of focus on the metrics that matter to CMOs and the
business — how marketing activities deliver return on
investment and profitability to the organization."

Not all organizations have felt the impact to the same
extent. Extra-large businesses have been shielded from
cuts thus far, and cuts have varied across industries,
with retail and manufacturing hit hardest.

While Gartner predicted these cuts, they will come as a
surprise to many CMOs. Only 14% of respondents sur-
veyed in last year's CMO Spend Survey anticipated cuts further than channel performance metrics and challeng-
in 2017, meaning many CMOs will be ill-prepared for es them to employ advanced analytics to answer the
change. CMOs need to think and act fast, ensuring they elusive total marketing ROI question.
continue to meet the growing business expectations or
further cuts will be ahead. And as marketing logic dictates that it requires more
resources to acquire a new customer than to retain or
The survey found that two-thirds (67%) of CMOs plan to grow an existing one, CMOs' budgets have become
increase investment in digital advertising, while tradi- heavily skewed toward retention, with budgets dwarfing
tional media faces budget losses. More than half of acquisition budgets by a ratio of two-to-one. However,
CMOs expect their investments in event marketing and this ratio can only be justified if it reflects the profitability
partner/channel marketing to fall or flatline, with 63% of existing customers bring to the business. Valuable mar-
marketers stating they expect flat growth or cuts in of- keting budget may be diverted to nurturing the wrong
fline advertising investment. At the same time, invest- customers — those that are a long-term drag on profit-
ments are growing across a range of digital channels, ability because they buy low-margin products, buy only
including websites (61% of CMOs expect to increase during promotions or have high servicing costs. Fur-
investment) and mobile (59% expect to increase spend- thermore, discarding the value of acquisition may harm
ing). CMOs also show a strong and continued commit- the long-term financial health of the business.
ment to social marketing, with 64% planning to boost
budgets. Furthermore, Gartner revealed that marketing technolo-
gy (martech) spending has fallen by 15% in 2017, as
"The shift to digital away from traditional media reflects CMOs pull back on previous high spending commit-
changing media consumption habits of target audienc- ments amid concerns over marketing's capability to
es," said Mr. McIntyre. "However, without capabilities acquire and manage technology effectively.
like marketing mix modeling (MMM), CMOs risk cutting
away at channels based on gut feel, irrespective of the Gartner for Marketers provides more information, like
journeys their customers and prospects actually take to the presented 2017-2018 CMO Spend Survey, which
buy, own and advocate their product and brand. These was conducted from June through August 2017 among
journeys likely include a range of digital and traditional 353 marketing executives in North America and the
touchpoints, which interplay and integrate with each U.K. at companies with more than $250 million in annu-
other." al revenue.◊

Since measurability is a contributing factor to digital me- By MediaBUZZ
dia budget growth, CMOs' focus on analytics reflects the
need to demonstrate marketing and advertising perfor-
mance and effectiveness to the business. The multi-
channel journey demands that marketing leaders go

MediaBUZZ Pte Ltd - Independant ePublisher for Asia