Driving an increase in budget availability to CMOs is a need for more innovative marketing to win business. Technology and business analyst house Gartner finds that 16% of the budget available to CMOs in 2019 and beyond is intended for "innovation". The same research found that CMO budgets remain steady and that 57% of those surveyed expect to increase the level of marketing investment. Dentsu Aegis Network find that 63% of CMOs expect an increase in budget for innovation, but state that ‘core channels' will be relied upon for results and are expected to remain competitive.
Despite the positivity of this news, Gartner does highlight that marketing remains at 11.2% of the organisational revenue, a level that US analysts state is static. But overall CMOs are confident their investment levels will increase during 2019, according to 63%.
"Marketing leaders must demonstrate the business value of their efforts amid uncertain times," says Ewan McIntyre, senior director, analyst, Gartner for Marketers.
Spending it and how
With digital marketing as the defacto method for CMOs, technology has become the highest area of spending. About a third of CMOs budget is allocated to technology, Gartner claims, with technology spending at 29% of the total budget allocated by CMOs. Email marketing platforms, web content management, digital marketing analysis are at the top of the CMOs purchasing list, the Gartner 2018 Marketing Technology Survey found.
The Nielsen CMO Report 2018 agrees, with 82% of the CMOs surveyed reporting plans to increase their digital spending as a proportion of their overall advertising budget; with an increase of 49% over the next two years being the keynote finding.
Technology marketeers are expected the largest increase in budget, according to the Dentsu Aegis Network CMO Survey 2018, with over three quarters of the CMOs in the sector expecting their budgets to increase and 31% of those surveyed stating the increase will be north of five percent.
The Dentsu Aegis Network research agrees that the technology sector will see marketing budgets increase and expects similar increases in sectors such as energy, financial services and healthcare. While the American Marketing Association (AMA) research carried out with Deloitte adds biotech to the sectors it expects to see an increase in marketing funds. The research agrees with its peers too and expects an increase in the funds available to marketing leaders in the technology sector.
The AMA breaks its findings down and states that marketing budgets for business-to-business (B2) products will grow by 8.8% and for B2B services it expects an increase of 9.2% over the next 12 months. Some observers believe this is down to the continued growth of cloud computing, digital and data services and the demand for these from business technology leaders.
The AMA study reveals how the increase in marketing funding will be spent, with brand spending having already increased from 4.3% to 7.3% the survey says customer relationship management (CRM) will increase to 9.5%. But, spending on new product introductions is likely to decrease.
According to technology analyst house Gartner, its research suggests CMOs will be focused their budget on increases personalisation, which agrees with the AMA findings on CMOs increasing their spend on CRM tools, the foundations for personalisation.
Gartner warns CMOs to be cautious with personalisation plans as there is no guarateed success.
"It's important for marketers to measure what matters for both marketing and the business," it Gartner states.
"The 2018-19 Spend Survey indicates that many CMOs still gravitate toward metrics that have little meaning outside the marketing organisation," Gartner adds. "When asked to define the most important metrics on their marketing dashboard, CMOs cited "awareness" as the most important, beating ROI and measures of customer value and customer satisfaction.
Technology analysis house Gartner, which has worked with CIOs and CTOs for a number of years warns CMOs to have a strong integration strategy to ensure that CMOs don't find themselves with disparate technologies and data that do not allow them to draw data driven conclusions.
Although all three reports are positive about forthcoming budgets for CMOs, the Dentsu Aegis Network analysis adds a note of caution that the wider business expects a more strategic approach to marketing. 48% of those surveyed by Nielsen said they were struggling to secure long-term investment funds and four in 10 CMOs told the organisation that they had "insufficient control over digital investment across the organisation".