Marketers are feeling better about the economy now than they have at any point during the past 4 years. That’s the news from the latest CMO Survey spearheaded by Dr. Christine Moorman and carried out with sponsorship from Duke’s Fuqua School of Businesses and the American Marketing Association. This survey is particularly valuable as it has tracked trends in marketer attitudes since 2008. Dr. Moorman and her colleagues regularly contact about 4,400 top marketers and obtain between a 9% and 10% response rate which delivers a nice snapshot of the business world.
The marketers in this survey pool have determined that their growth strategy for the next 12 months will be heavily weighted toward diversification, +23.4%, with a smaller emphasis on market development (+12.7%) and product/service development (+11.3%).
The emphasis on diversification will be accompanied by a smaller increase on marketing spending. In the next 12 months, these businesses plan to bump up marketing spending by 4.3% on average. By sector, the figures break out as:
- B2C service 5.4%
- B2C product 4.1%
- B2B service 4.5%
- B2B product 3.5%
The average drop in traditional marketing spending will be 2.1% while the average increase on digital formats will be 10.1%. The changes in marketing expenditures by type will be most noticeable in the B2C sector. Businesses selling products to consumers will pump up digital spending by 14.6%. Businesses selling services to consumers will cut their traditional media spend by 5.4%.
Within the digital marketing expenditures category , we can expect these businesses to focus on social media. Currently, social media captures 6.6% of total marketing expenditures. In another 12 months, the spending will climb to 9.1% and in 5 years, it could reach 15.8% of the marketing budget. The commitment to the social media investment is fascinating considering that only 15% of these businesses can quantitatively prove the impact of social media on the bottom line. Another 36% see the qualitative impact while 49% have failed to make the link between social media and increased revenue.
Overall, these businesses are allocating 7.8% of their total revenue for marketing expenses going forward which is a significant drop from the 11.0% they allocated last year at this time. In addition, these businesses will ramp up their spending on marketing analytics. This activity will grow from 5.5% to 8.7% of the marketing budget within the next five years.