BY Kathy Crosett
The 28th edition of the CMO Survey, produced by the Duke University Fuqua School of Business and sponsored by Deloitte LLP and American Marketing Association, highlights the attitudes and plans of 320 business leaders as of Q1 2022. While marketers felt they’d turned an important economic corner in August 2021, their optimism faded in Q1. Only 30.6% of marketers say they are more optimistic about the economy, a significant drop from the 32.7% who held that opinion six months ago. The lingering impact of the omicron COVID-19 variant and inflationary pressures explain some of the change. Business leaders will be adjusting their marketing spend, media mix and messaging as a result of their new outlook.
Marketing Spend to Grow to 10.4% of Revenue
As a percentage of revenue, marketing budgets will be 10.4% of the total this year. That figure is down from a high of 13.2% in 2021. Companies in the business-to-consumer product verticals, like apparel retailers, will spend the most, 14.2%. It’s also important to note that businesses plan to ramp up their marketing expenditure over last year by 13.6% for 2022.
On average, 57.1% of the marketing costs will go to digital formats. Business-to-consumer product companies, such as shoe or apparel retailers, will spend the most on digital marketing. Up to 66.6% of the total budget will go to formats like search, email or social media.
Traditional media sellers will also have something to cheer about when reading the results of this survey. Marketers anticipate increasing their traditional media spend by 2.9% in the next 12 months.
The typical company will grow new product introduction spending by 8.8%, brand building by 11.8% and new service introduction spending by 5.3%.
Mobile Marketing Outlook Improves
Despite the hype about mobile marketing and the fact that consumers spent the pandemic glued to their mobile devices, marketers rank the contribution from their mobile advertising investment to be mediocre. On a scale of 1 to 7, the mean rating for mobile marketing came in at 3.0 in Q1 2022, compared to 3.1 in Q1 2021. The marketers in this survey had dropped the percentage of their budgets dedicated to mobile from 18.4% to 13.3% in the past six months. But going forward, they expect spending in the format to increase to 18.7% of the total marketing budget as they compete for customers and revenue.
Social Media and Influencers Must Prove Their Worth
Increases in social media spending stalled out during 2021, and in Q1 2022, it captured about 15.4% of the total marketing budget. In the next year, that figure is projected to climb to 18.1%. The typical business hires out about 21.5% of its social media needs, a trend which indicates opportunity for media companies and agencies that sell these services. They should know that businesses still struggle to tie social media investments to the bottom line, with the average company rating it a 3.6 out of 7.
Another new digital media format, social influencers, is still growing, but not quickly. Business-to-consumer product companies are most likely to use influencers and spend 9.9% of the marketing budget on this format. On average, about 5.6% of a company’s budget is allocated to influencers. Three years from now, marketers say that figure could grow to 10.9%.
Digital Marketing Investments to Grow
To maintain their market share, business leaders are staying on top of digital marketing trends and investing in formats and technology to gain an edge over the competition. In the past year, businesses made the following investments to improve digital marketing:
- Data analytics +37%
- Digital media and search +9%
- Marketing technology/platforms +29.7%
- Direct digital marketing (such as email) +19%
Business owners and industry experts expect digital marketing budgets to grow. As they become more complex, businesses are handing off some of the activities to external partners. This year, the average business uses partners for 31.6% of digital marketing work. In 2024, that number will rise to 33%.
As you pitch your digital marketing services to prospects, you need tools to increase your credibility. Check out the Digital Audit, available at AdMall by SalesFuel. With this report, you can show your prospect their digital footprint and compare it to their competitors and to their industry.
Photo by Mikael Blomkvist from Pexels