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Global ‘State of Marketing Audit’

TRENDAFRiCA January 14, 2013

Every year, for the past six years, the global body representing marketers, the Chief Marketing Officer (CMO) Council, has audited the mindset, strategy, process and effectiveness of marketing worldwide, to benchmark critical strategic marketing issues and priorities for its 6000-strong member base which controls more than $300 billion in annual aggregated marketing spend worldwide.

The 2012 report, released to TREND. by CMO executive director, Donovan Neale-May, on a recent visit to South Africa, gained input from more than 550 heads of marketing, communications, and customer engagement in North America, Europe, Middle East, Africa, Asia, and Latin America. Nearly 65% of these marketers report to the president, chief executive officer or chief operating officer, 15% report to regional and business division chiefs.

Neale-May points out that more than 30% of respondents represent companies with more than $1 billion in annual sales; 11% have between $500 million and $1 billion in sales; and another 30% come from companies with revenues between $50 million and $500 million. Nearly 60% of respondents globally held executive officer titles, with the balance at the director level.

Research findings from the “State of Marketing” audit plot marketing priorities for 2013. Global highlights include:

  1. Top-line revenue growth and market share gains remain senior management’s top mandates for marketing in 2013 and a top professional priority for marketers is to also increase collaboration with sales and/or channel organisations.
  2. Nearly 60% of marketers expect to make an agency change in 2013, with social marketing, web design, and PR firms topping the list of those service providers that will be fired. Lack of innovation and value-added thinking is the primary reason for a switch.
  3. About 19% of marketers expect to retrench staff this year, but more than 50% are hiring and they are looking for specialists in: social media, marketing analytics, strategic planning, search marketing, web analytics, data management, and customer insight.
  4. Only 18% of marketing heads rate their digital marketing performance as excellent or good, despite it being a strategic priority and most are spending less than 10% of their marketing budgets on digital.
  5. Market size and potential opportunity is by far the dominant reason for selecting and targeting emerging markets, reports 87% of respondents; economic growth rates and outlook are secondary considerations for 57% of marketers.
  6. Weakening economies and the diversity and complexity of customer markets are the most challenging aspects of geo-expansion, but government bureaucracy and controls are added problems.
  7. Setting clear goals and tracking deliverables are seen as the best ways to improve operational effectiveness, according to 58% of marketers, who say they are also increasing operational visibility, controls, and accountability of spend.
  8. Improving customer segmentation and targeting tops the list of ways CMOs are maximising the impact and value of marketing, according to 61% of marketers.

 

The full executive summary is below:

Strategic priorities and budgets

  • Top-line revenue growth and market share gains remain senior management’s top mandates for marketing; an overwhelming 82% of marketers believe this is an attainable goal in the current global economy.
  • More than 50% of marketers increased budgets in contrast to 22% who saw budget reductions; some 24% had no change in spend during 2011.
  • Management and business leaders are the biggest sources of influence in determining marketing strategies and spend allocation; other key considerations include potential payback and ROI, as well as maturity of market or product line.
  • New product launches garner the largest allocation of marketing resources, followed by corporate branding and identity building, as well as lead generation and qualification.
  • Some 40% of marketers report budgets of 2% of revenue or less; 39% allocate between 3 and 6% of sales; and 21% are allocating more than 7% of revenue on marketing spend.

 

Digital marketing directions

  • Digital marketing makeovers have become the transformational agenda item for 50% of CMOs; but just 18% of marketing heads rate their digital marketing performance as excellent or good.
  • Despite this change mandate, a disproportionate 64% of marketers are still budgeting less than $500 000 this year for digital media and online marketing spend, while 46% note this is less than 10% of their overall marketing budgets.
  • On the upside, 17% of marketers are now investing 20% of their budgets or more on digital, and 4% have budgets of more than $5 million annually.
  • Tactical measures of digital marketing (clicks, page views, site traffic, search prominence) eclipse business metrics (customer acquisition, transactions, incremental revenue, deal value) in measuring digital marketing effectiveness.
  • Social, mobile, online, and eMedia content delivery rate highest among alternative channels of market access and engagement.
  • Marketing automation advances still languish both in terms of ambition and scope; email still remains the number one solution to be deployed by 41% of respondents in the next 12 months. Mobile applications (33%) and website performance optimisation (34%) are the next level of priority for survey participants.

 

Talent sourcing and partner performance

  • Hiring new talent is anticipated by 50% of marketers, while 19% expect to shed staff.
  • Recruitment priorities include experts in social media, marketing analytics, strategic planning, search marketing, web analytics, data management, and customer insight.
  • Just 12% of senior marketers see their agency partners as extremely valuable; 47% say their agencies are average, under-performing, or not producing at all.
  • Nearly 60% expect to make an agency change, with social marketing, web design, and PR firms topping the list; lack of innovation and value-added thinking is the primary reason for a switch.

Job security and compensation

  • Only 11% of chief marketers believe their jobs are at risk; however, 38% believe they are not fairly compensated compared to 39% who are satisfied with their current compensation.
  • Gratifyingly, 69% of senior marketers received a salary increase or bonus in 2011, and 42% expect the same at the end of 2012,  with another possible 31% if their performance merits it.
  • The majority of chief marketers earn a base salary of $100 000 to $349 000 (77%), and 83% have bonuses included as part of their compensation package; many also enjoy perks, privileges, expense accounts, equity, and stock options in their compensation packages.

 

Professional development, leadership, and responsibilities

  • CMOs believe furthering personal leadership and motivational skills is the best way to advance their careers; on the other hand, increasing collaboration with sales and/or channel organisations is their top professional priority in the coming months.
  • Many find organisational cultures frustrating and undermining marketing success, but insufficient budget is the biggest source of aggravation.
  • Areas where CMOs have the least authority and responsibility, include customer service/support (17%), sales and key account management (20%), product management (30%), product design/specification (28%), distribution/channels (30%), and pricing (32%).
  • Not surprisingly, 82% of chief marketers say they own strategic planning and forecasting, and another 80% report a primary responsibility for branding.

 

Global market priorities and challenges

  • Not surprisingly, China, India, and Brazil top the list of targets for emerging market growth; not far behind are Southeast Asia, the Middle East, and sub-Saharan Africa.
  • Market size and potential opportunity is by far the dominant reason for selecting and targeting emerging markets, reports 87% of respondents; economic growth rates and outlook are secondary considerations for 57% of marketers.
  • Weakening economies and the diversity and complexity of customer markets are the most challenging aspects of geo-expansion, but government bureaucracy and controls are added problems.

 

Marketing Effectiveness

  • Marketers focused on functional integration, sales conversion, and customer connectivity in 2012, with the top accomplishments being: (1) new campaigns to advance the business, brand, or customer experience; (2) restructuring and realignment of marketing to better support sales and improve selling cycles; and (3) improved digital marketing and online customer engagement capabilities.
  • Setting clear goals and tracking deliverables are seen as the best ways to improve operational effectiveness, according to 58% of marketers, who say they are also increasing operational visibility, controls, and accountability of spend.
  • Improving customer segmentation and targeting tops the list of ways CMOs are maximising the impact and value of marketing, according to 61% of marketers, who are also deriving more value by localising marketing strategies and content to increase relevance and response.
  • Surprisingly, events and trade shows are considered to be the most effective ways to brand and generate demand by 45% of senior marketers. Functional runners up include: direct marketing, website search optimisation, social media engagement, and better use of customer analytics.

Organisational and operational improvements

  • Top transformational projects in the pipeline include digital marketing makeovers (50%); dashboard deployment for marketing performance measurement (39%); and sales and marketing organisational alignment (39%).
  • The most noteworthy organisational and operational changes being undertaken by senior marketers, are improving alignment and integration with sales and channel groups (48%), followed by the addition of new digital media and interactive marketing talent (35%).

 

Source: Chief Marketing Officer (CMO) Council’s ‘State of Marketing report’ 2012

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