CMO Study: 12% of Marketing Budgets Spent on Media
If you’ve noticed that your clients suddenly seem obsessed about delivering excellent service, you’re seeing evidence of a new trend. It may be the Amazon effect – as in businesses want to make sure customers are delighted. Or it may be that businesses want to scoop up the new consumers entering the market. Either way, this year’s ad campaigns will reflect more promises about excellent service.
That trend is one of many reported in the February 2018 CMO Survey Highlights and Insights Report from Dr. Christine Moorman from Duke University’s Fuqua School of Management and her partners. Conducted twice a year, this comprehensive survey takes the pulse of business leaders across the U.S.
In the next 12 months, 53% of businesses expect increased customer retention and 48% believe there will be new customers entering the market. Of the factors used to measure customer priority, there was a jump of 6 points from 22% to 28% in businesses that believe excellent service is most important. That factor now surpasses product quality. Business-to-consumer service operators should emphasize their focus on excellent service as 40% believe this is a top concern for consumers.
In the next year, the typical business will increase its marketing budget by 8.9%. By category, this figure breaks out as:
- B2B product 9.3%
- B2B services 8.5%
- B2C product 9.0%
- B2C services 8.9%
Verticals where marketing increases will be above average include:
- Energy 21.4%
- Health care 13%
- Communications/media 12.6%
- Tech/software/biotech 12.4%
And then there’s advertising. Marketers anticipate increasing their digital marketing spend by 15.1% in the next year. On the other hand, they’ll pull back from traditional advertising by 1.7%, slightly lower than the 2.0% they reported in August 2017. The typical business spends 12.0% of the marketing budget on media spending.
By this time next year, social media could account for up to 15.3% of the marketing budget. B2C services spend the most at 13.5% while B2B product companies spend only 9.3%.
Despite this continued investment, businesses have barely moved the needle on the goal of integrating social media with the company’s marketing strategy. The 2012 score of 3.9 has only risen to 4.1 in 2018 on a scale of 1-7. However, 23% say they can now prove the quantitative impact on the business.
Meanwhile, the opportunity for social media services remains high. At least 18.5% of social media activity is outsourced to vendors.
Businesses are also looking for help in the marketing consulting services area. Specifically, education (10.2%), retailers/wholesalers (8.1%), and transportation (8.3%) companies indicate the strongest interest in this area.
Understanding “how to do marketing” is another area that businesses want to improve on. The verticals with the biggest need appear to be:
- Consumer services 8.9%
- Communications/media 8.5%
- Tech/software/biotech 7.7%
This report reveals the biggest areas of opportunities in 2018 for media sales and services. Check out the details and consult with your clients.
Latest posts by Kathy Crosett (see all)
- Over 90% of Employers Use Short-Term Incentive Plans - February 19, 2019
- Westwood One Study: Podcast Ads Shine in Driving Call-to-Action Metrics - February 18, 2019
- High-Growth Professional Services Firms Spend More on Marketing - February 15, 2019
- 83% of Email Marketers to Spend More in 2019 - February 14, 2019
- How To Change Bad Habits and Reach Your Leadership Goals - February 13, 2019