Listening to Adobe’s CMO Ann Lewnes last month at CMO Connect, I was struck by her bold statement addressed to other CMOs: You will not be successful in marketing without making your CEO/CFO believe in digital.

If our spending is any indication, CMOs are getting the message. We’re investing more budget in digital marketing in 2013, and indicating a growing preference for social activity, consumer conversations, and great content over other forms of digital marketing.

Overall marketing budgets will increase over 5 to 7% in 2013, while digital marketing budgets increase by 9% — in other words, digital is getting a bigger slice of the pie. A recent study by Gartner suggests that bigger budgets mean more pressure on CMOs, creating a preference for digital activities with higher returns:

“Marketing leaders have secured bigger budgets to define markets and attract, acquire, and retain customers. Yet, increased funding is a double-edged sword. It brings new opportunities but puts more pressure on marketers to deliver and prove a return on the investments.”

Digital data helps CMOs gain influence

Companies are likely to allocate more funding towards their digital marketing budget when they have an expert in that area doing research and making recommendations. When that person reports to the CMO, the company spends 5% more on digital marketing and is growing that budget 5% more than when the CIO owns the technical resources.

It makes sense that CMOs are inclined to spend more on digital marketing than CIOs. Social data has influenced decisions for 89% of CMOs, and 82% say it has had a measurable impact on brand awareness. Beth Comstock, CMO of GE, says this focus on customer data is the future of the CMO position; if you’re a marketer and you don’t like data, she says, you won’t like the future.

The whole C-suite is becoming more customer centric: 61% of CEOs now identify “customer obsession” among the top traits a CEO must exhibit. As more C-suite decisions are influenced by data gathered on customers through the brand site, social networks, reviews, and other digital marketing activities, the CMO (as the “chief customer advocate” in charge of this data) is becoming more influential in their organizations. To increase that influence, CMOs should join the 70% of companies that have already hired a digital marketing manager, says Bill Gassman, Research Director for Gartner:

“The take-away here is: If digital marketing is important to your corporate goals, hire a digital marketing director with ownership of the technical resources to get the job done.”

Bottom-line pressure changes ad spending, increases focus on social content

Forty percent of marketing leaders say their corporate website, social networking, and digital advertising are key to their marketing success. Right now digital marketing spending makes up 25% of companies’ marketing budgets — but as the stats above show, that rate is growing at a faster clip than marketing budgets overall. Writes Jessica Donlon for Marketing Score:

“The finding is likely a nod to the added pressures of the more tech-savvy and tech-responsible CMO: With deeper integrations of marketing, tech, and sales, CMOs face greater expectation to deliver quantifiable, bottom line results for marketing efforts.”

Ads still receive the largest portion of digital budget, with 12.5% of budgets used on digital advertising. But in the Gartner survey, CMOs some expressed concerns about ad effectiveness, leading agencies work to formats and deliver smarter placement, such as ads in the retail channel. Nearly as much money was spent on content creation and management as ads, as marketers allocated 11.6% of their digital marketing budgets to ensure they had quality content on social networks, customer forums, blogs, and other channels.

CMOs will enlist consumer conversations to stretch marketing budgets further

In order to make those budgets work harder, expect to see CMOs focus more spending on efforts to attract user-generated content. Video production, for example, currently gets 5.9% of digital marketing budgets. Today, 57% of consumers say product videos make them more confident in purchases and less likely to return items — so expect brands to want more of this content.

But instead of spending much more budget to create brand-made videos that are hard to scale, I imagine brands will put more effort into soliciting videos from product owners themselves, in the form of video reviews and haul videos (in which people discuss the products purchased on their most recent shopping trip).

In a marketplace with unlimited choices, fragmented audiences, and consumer-controlled messages, CMOs face more pressure than ever to stretch limited budgets for better results. Spending in social networks, customer forums, and content marketing is growing — and this trend only looks to continue.


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