The CMO Survey

Director Christine Moorman spoke with Alan Hart about her career and about key findings from The CMO Survey. Listen to the full episode at: https://lnkd.in/e6h6edTC

The 2024 CMO Survey Award for Marketing Excellence is selected by fellow marketers. It is given each Spring to one company that is judged to set the standard for excellence in marketing across all industries and to the companies viewed as setting the standard in their respective industries. #Apple Inc. is the overall winner for the sixteenth straight year. Industry winners include Amazon, Nike, Procter & Gamble, State Farm, and Microsoft. Congratulations! For all new results from the 32nd edition of The CMO Survey, visit: https://lnkd.in/eMZjmc73

Marketers Spend on New Technologies While Battling Usage and Impact Challenges The 32nd edition of The CMO Survey examines reoccurring questions related to marketing spending and performance, marketing leadership, and marketing jobs. In addition, managing marketing technology, generative AI, growth, and sustainability are special topics covered in this edition. Over three-fourths (75.3%) of companies surveyed are using marketing technologies (#Martech), with high-revenue organizations leading. Companies spend 19.9% of marketing budgets on Martech. This is expected to grow to 23.5% in one year and to 30.9% in five years. These and other 32nd edition results are based on a sample of 292 marketing leaders at for-profit U.S. companies, 94% of whom hold positions at VP-level or higher. Approximately 62% of marketing activities use Martech tools, up from 58.4% just one year ago. Yet, only 56.4% of all Martech tools purchased are being used. The emphasis in managing Martech is reported to be on “optimizing existing tools,” “identifying tools for a stronger customer experience,” and “identifying what can be linked together to form powerful capabilities,” while “hiring or retaining talent” and “creating a shared cross-enterprise strategy” are given less attention. Martech impact on company performance is evaluated at 4.7 on a 7-point scale where 1=not at all and 7=a great deal. Consistent with this modest performance, marketing leaders report that actual Martech payoffs are 34% lower than their hopes for these payoffs. Marketing leaders report their weakest performance is on “hiring staff to manage Martech” and on “integrating Martech across other data systems in the company.” For full release details regarding Martech and other results, visit https://lnkd.in/eMZjmc73

CMO Survey Director Christine Moorman and Colleen Hickey report findings from The CMO Survey that marketing leaders realizing gains from #AI in three key areas: increasing sales productivity, increasing customer satisfaction, and reducing marketing overhead costs. However, not all companies are realizing the same gains. They discuss three factors influencing AI returns AI tool adoption time, the company’s digital transformation stage, and its level of experimentation with AI. 

Academic research across almost four decades has provided abundant evidence about the positive relationship between a firm’s #marketorientation or #customerorientation and its financial performance. This includes the collection, sharing, and use of customer information in a firm’s strategy. The CMO Survey finds that this orientation has retained its importance over time. In fact, a comparison of 2018 and 2023 results shows that these levels have increased in companies, on average, with the biggest increases occurring in the sharing of customer information across different business functions and units. How do customer orientation practices vary across companies? Results indicate that the larger the company, the more the company collects customer information on a regular basis. Small companies (<50 employees) reported a 4.9 (on a 7-point scale where 1=not at all and 7=all the time) for collecting data on a regular basis while larger companies (10,000+ employees) reported a 5.7. On the other hand, smaller companies use the information more than larger companies to shape strategy (5.3 for small vs. 5.0 for large), use it to influence the implementation of the strategy (5.4 for small vs. 5.2 for large), and evaluate the strategy (5.5 for small vs. 5.0 for large). This small-large finding is also something we see in broader research on customer orientation. Larger companies tend to be good collectors of information because they have the resources. However, the formality/bureaucracy that often goes with a larger size can interfere with if and how information is used. How well-developed are your company’s processes for collecting, sharing, and using customer information its strategy? 

What’s Happening With the Role of the CMO? With a growing number of responsibilities and increased pressure to drive revenue, today’s CMOs may face more complexity—and volatility—in their jobs Thank you The Wall Street Journal and Deloitte for these insights and ideas. https://lnkd.in/ed6Ch9dp

Is this happening in your organization? Stuck between proving profit, telling brand stories, building consensus, and harnessing data, marketing chiefs navigate a complex landscape to secure organizational support and recognition. The struggle is real: 61% of marketing leaders wrestle with proving the financial worth of their marketing actions. Bridging the gap between marketing initiatives and the bottom line is key to unlocking support and recognition. The challenge of demonstrating the impact of marketing actions on financial outcomes is stronger in companies with zero online sales (at 70%) versus pure-play internet companies (at 57%). B2B companies (65%) struggle more with this than B2C companies (50%). Across specific sectors, demonstrating the impact of marketing on financial outcomes is most difficult in professional services (87%), dropping to 26.7% in the retail/wholesale sectors. Consistent with these pressures on #financialaccountability, 52% of marketing leaders report feeling increased pressure from CFOs to prove the value of marketing. This percentage has increased from 45% in 2021. What actions and investments are being taken in your company to respond to these accountability pressures?  

Findings from The CMO Survey indicate that the number of indirect reports for marketers has increased by 171% since August 2009 while the number of direct reports has remained relatively unchanged. This dramatic increase began in August 2016, leaping from 16 to 29 by August 2017. In the subsequent six years (2017 – 2023), indirect reports have steadily risen from 29 to 38. These contrasting changes are consistent with changes we have witnessed in the nature of marketing activities in recent years. In today’s marketing landscape, the use of diverse channels and technologies foster more connections across the organization. Between social media marketing to content marketing, marketers need specialists to navigate ad platforms, influencers, and creatives. Likewise, marketing is increasingly working with operations and technology areas of the firm as it navigates complex technology ecosystems, including specialists who understand data integration and automated workflows. This all means that marketing is now very enmeshed in cross-functional collaborations with departments such as sales, product development, customer service, and technology. We think these collaborations are a key driver behind the substantial growth in indirect reports. In support of this, we find positive correlations between the number of indirect reports and both how far along the company is on the digital marketing journey and the number of different ways marketing is using AI tools. Who has the largest number of direct reports? Marketers who lead larger companies (by sales revenue or number of employees) have more indirect reports. For example, in companies with less than $10M in sales, marketers have 2.5 indirect reports, on average, whereas in companies with $10B or more in sales, marketers have a whopping 230! Marketing leaders have more indirect reports in B2C (64) than in B2B companies (25). Examining specific sectors, marketing leaders in Consumer Services (149) and Pharma/Biotech (170) have the largest number whereas Professional Services (9) and Communications/Media (11) have the smallest. Importantly, the number of direct reports is consistent across companies of different sizes and in different sectors (between 5-9). This increase in “dotted line” reports has both challenges and advantages. Challenges tend to arise around alignment on goals and strategies. It is crucial that indirect reports understand and believe in both. It is also essential that these reports share an understanding of who the customer is and their underlying needs and characteristics. Disconnects are often the damaging underbelly of cross-functional work and marketing leaders facing this growth in indirect reports will need to make this their first priority. The advantages are potentially more influence within the company. Specifically, this broader role can be used by #marketingleaders to solidify a stronger focus on managing customers for profit. Deloitte American Marketing Association

This may be the most important journey #marketing has ever experienced. It is worth thinking about when it is done well and how marketing leaders can contribute to this digital progression.

How Companies are Progressing on the Digital Marketing Journey   Results from The CMO Survey show that companies are making important progress on their digital marketing transformations. To determine company progression, we created a matrix of the stage in which companies were one year ago and where they are today. Compared to a year ago, results indicate that 59% of companies are in the same position, but 39% have progressed in the journey (the remainder appear to have moved backwards to repeat work). Of these, 18.4% moved from the nascent stage (early stage to design and visualize transformation) to the emerging stage (building non-integrated digital elements), 14.7% moved from emerging to an integrated stage (fully integrated digital investments across the company) and another 1% moved all the way to from emerging to an institutionalized/established stage (meaning they are leveraging digital investments to drive and evaluate marketing decisions). Finally, another 5% progressed from integrated to institutionalized. Shifting lenses to an aggregate view across all companies (as show in the figure), results indicate that the number of companies that are fully institutionalized/established has increased by 83% from 7% a year ago to 12.8% now. Likewise, the number of companies in the integrated stage has increased by 74%, from 13.9% to 24.2%. These gains are being made from companies moving out of the nascent stage, as we witness a 67.5% decrease in the number of companies in that stage, dropping from 27.1% to 8.8%. Companies in the emerging stage have increased only slightly, from 52% to 54.2% in the last year. When looking across the different industries, the B2B sector, on average, remains in the early stages of conceptualizing and outlining the necessary steps to achieve this digital transformation with 54% of B2B-Product and 58% of B2B-Services companies in the emerging stage. Conversely, fewer B2C-Product companies are in the emerging stage at 45%, with 29% in the integrated and 21% in the institutionalized/established stages. B2C-Services companies are somewhere in between. In terms of online sales, 35% of pure-play internet companies are in the institutionalized/established phase compared to brick-and-mortar companies at 3%. Among industry sectors, tech, energy, retail/wholesale, and communications/media companies have a higher proportion of companies in the integrated and institutionalized/established phases. Where does your organization currently stand on this digital marketing journey? Is your organization poised to more fully leverage the value of digital integration to make informed decisions across the organization? What technological, organizational, people, or leadership challenges are getting in the way of more progress? #digitalmarketing, #marketingleaders Duke University - The Fuqua School of Business, Deloitte, American Marketing Association