CMO Outlook Dims but Resource Shift to Social Media Continues
The business outlook for many marketers has dimmed since the start of this year. The regularly published CMO survey shows a significant drop in optimism about the economy. This survey also shows that B2B operators have the most pessimistic outlook going forward.
About 58.4% of CMOs surveyed by Christine Moorman at Duke University say they are optimistic about the general economy which is a 5% drop from 6 months ago. Part of this pessimism stems from their forecast about customer outcomes. Only 45.4% see their firms as increasingly able to retain current customers and only 43% of CMOs see new customers coming into the market.
Earlier this year, these CMOs indicated they would increase their marketing expenditures by an average of 8.1%. That number has now dropped to 6.4%. Planned increases in marketing expenditures by business type break out as follows:
- B2B product 5.7%
- B2B service 6.1%
- B2C product 8.6%
- B2C service 6.8%
These changes will result in average marketing budgets that amount to 11.4% of total budgets. In the next 12 months, the planned changes in marketing spending are revealing. CMOs say they’ll cut traditional ad spending by 1.9% while they will increase online spending by 11.5%. New product introductions will have a 9.4% marketing expenditure bump but new service introductions will receive only 6.4% more in marketing spending. Firms will also spend more on customer relationship management (9%) and brand building (7.5%).
In a year where social media is still the focus at many businesses, CMOs expect that this channel will account for 10.7% of marketing expenditures. This is a jump from the current 7.6% level. In addition, CMOs say that within 5 years, social media spending will make up 18.8% of the average marketing budget. At the same time, marketers are struggling to integrate the incoming customer information across channels. They are also cutting back both the number of people employed in-house and as contractors for the social media effort. This shift suggests that that marketers may be making more effective use of automation to manage social media.[Source: Moorman, Christine. The CMOSurvey.org. Duke Fuqua School of Business and AMA. August 2012. Web. 4 Sept. 2012]