CMO Survey Reflects A Shift Toward Buyer Enablement

CMO SurveyThe ‘empowered buyer’ is pushing CMOs to invest in the technology and talent it takes to compete in an ever-evolving market. The August 2019 CMO Survey indicates that marketing is gaining significance as businesses adapt to a market where enabling buyers – rather than selling to them – is a priority.

CMOs are spending more on tech, outsourcing talent, and ultimately moving toward a future with AI at the forefront. At the same time, it is more important than ever for marketers to be cautious around flashy new tools and trends that distract teams and drain budgets. Here are 5 insights based on the findings of the CMO survey that elucidate some of the most critical issues CMOs face today.

1 | Marketing budgets are increasing as new technology makes marketing departments more relevant to organizations.

The CMO survey reports that marketing spending is reaching a new high of 12% of on overall firm budgets, or 9.8% of firm revenues. Larger companies (1-10B+) are spending between 3.6%-4.4% of their revenues, trending upward from 1.5%-4.3% in February 2019. Increasing budgets are likely rooted in the realization that marketing counts when it comes to influencing the buyer journey and driving conversions.

Technology is an essential element of marketing’s growing clout, with new MarTech innovations that promise to deliver swift ROI. As the survey reports, marketing leaders “believe that new technologies have strengthened the importance of marketing in their companies.”

Marketers should take caution, however, when it comes to spending their expanding budgets on the latest MarTech offering. It’s all too easy to purchase expensive new tools only to discover that your team is not equipped to use them effectively. New technology is unlikely to become a quick fix for your marketing problems or deliver unexpected results.

Best in class marketing departments have investments in people, process, and technology. It includes heavy analysis of data, mapping out the customer journey, tracking the customer, and determining how people are going to respond to the journey. If you are looking to invest in new solutions, look at technologies in later stages of adoption and leverage them to amplify your existing efforts.

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2 | CMOs can overcome the challenge of justifying marketing spend by having the right processes and methodologies in place.

The CMO survey states that spending on marketing analytics has grown from 4.6% of marketing budgets in 2017 to the current 7.2%; an unsurprising finding given the newfound pressure marketers are under to justify their expenditures. Yet, as CMO Survey founder Christine Moorman points out, analytics have only made a moderate contribution to performance, with only 40% of marketers reporting they have “the right quantitative tools to demonstrate the impact of marketing spend on company performance.”

Marketers can overcome the challenge of proving ROI by thinking less about tools and more about developing processes and methodologies to report on the outcome of their marketing investments. For example, if your marketing team spends a million dollars on creating content, you’re likely wondering if it was worth it.

Attribution Reporting

To determine ROI, your team could use attribution reporting to connect content consumed by buyers as they progress along the funnel with revenue closed. There is simply no tool or hack to report on marketing effectiveness: it takes time and a willingness to collaborate across traditionally siloed departments.

You can learn more about Attribution Reporting with our free eBook!

3 | The future of MarTech is leaning heavily toward Artificial Intelligence (AI), but at the present moment companies should proceed with AI at a limited scale.

According to the CMO survey, marketing leaders “report a 27% increase in the use of AI and machine learning in their toolkits over 2018 levels and expect this level to increase another 60% within three years.” At this rate, it is clear that AI will fundamentally transform how marketing functions. The operative word, however, is will: presently, AI is still in a hype stage and its real impact is not likely to happen until the technology matures.

We strongly encourage marketers to check out Gartner’s 2019 Hype Cycle for Digital Marketing and Advertising. Marketing AI is at the “peak of inflated expectations” and heading toward the “trough of disillusionment” where users will finally start to understand the real extent of its capabilities. It will likely take 5-10 years for a full realization of AI. This is not to suggest that marketers avoid experimenting with AI in their toolkits. Marketers are well aware that ignoring new, promising tech is detrimental in any space where staying ahead of the curve is essential. We recommend that teams set aside a small budget for AI and test out 2-3 new technologies. Run pilots to see how well AI works in your business and invest more money when the technology matures and moves further along the Hype Cycle.

4 | Companies are turning to consultancies to augment their capabilities.

With new technology playing a key role in marketing, it is expected that companies would build new capabilities by retraining current marketing staff and hiring adept MarTech users. Interestingly, the CMO survey reports that the percentage of companies investing in retraining and hiring has actually decreased from 59.8% in 2018 to 53.8% in 2019. As Moorman points out, “partnering with agencies and consultancies to build capabilities has, in turn, risen.”

The technical and business skill sets required to thrive today are difficult to find. Consulting with the right agency can provide numerous benefits to companies with a skills gap. A consultancy may have worked with 20-30 companies on the same type of marketing initiatives and can offer an experienced perspective on what does and doesn’t work.

For example, if you are thinking about trying a new ABM program but your team has limited experience with it, a consultancy can provide substantial expertise you wouldn’t be able to find internally. When choosing a consultancy to work with, we strongly recommend that you find out whether or not they truly have expertise in the area you are looking for.

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5 | New technologies are replacing marketing employees. Embrace It!

Marketing automation has replaced numerous functions in the workplace and this transition is the first step toward a full realization of AI. Though 57.6% of respondents to the CMO Survey reported that new technologies are not replacing marketing employees, the number is “expected to drop to 37.5% in the next three years.”

These figures reflect a changing reality for the role of the marketer, as the practice of marketing aligns with digital transformation. Presently lead scoring is a protracted process of engaging with Sales to identify an ideal definition of a hot lead, analyzing successful opportunities for patterns that can be used to enrich it, and then codifying the scoring and desired outcomes into the systems. The lead scoring function will be replaced by AI programs tracking customers, selecting appropriate content for the customer based on previously read content – similar to the Amazon recommendation system – and then sending to Sales for engagement at the optimal moment.

While some jobs will be eliminated, history shows that new jobs are always created in their place at a higher functional level to guide future processes and technology investments. Marketing leaders will be better off embracing and adapting to these inevitable changes.

The Evolution of Marketing

The 2019 CMO Survey shows the increasing significance of marketing in a context where tracking and influencing customers is a fundamental part of driving revenue. Building meaningful connections with customers is going to separate success from failure in the era of the empowered buyer. Having the right people, processes, and technology to make these connections will help companies evolve with the reality of a changing marketplace.