The cmo survey_highlights_and_insights_aug - 13-final

1. Highlights and Insights August 2013 © Christine Moormanwww.cmosurvey.org

2. © Christine Moorman 2 About The CMO Survey Mission - To collect and disseminate the opinions of top marketers in order to predict the future of markets, track marketing excellence, and improve the value of marketing in firms and society. Survey Operation - Founded in August 2008, The CMO Survey is administered twice a year via an Internet survey. Many questions repeat to observe trends and special topics are introduced in some surveys. - The August 2013 survey was the tenth administration of The CMO Survey. Sponsoring Organizations Founder and Director - Professor Christine Moorman, T. Austin Finch, Sr. Professor of Business Administration, Fuqua School of Business, Duke University

3. © Christine Moorman 3 Survey Methodology Survey Sample - 4410 top U.S. marketers at Fortune 1000, Forbes Top 200, and Top Marketers who are AMA Members or Duke University Alumni and Friends - 410 responded for a 9.3% response rate Survey Administration - Email contact with three follow-up reminders - Survey in field from July 16, 2013 - August 6, 2013 - 93% of respondents VP-level or above Results Interpretation - M = sample mean; SD = sample standard deviation - B2B = Business-to-Business firms; B2C = Business-to-Consumer firms

4. © Christine Moorman 4 Topic 1: Marketplace Dynamics 5-11 Topic 2: Firm Growth Strategies 12-18 Topic 3: Marketing Spending 19-31 Topic 4: Financial and Marketing Performance 32-38 Topic 5: Marketing and Social Media 39-46 Topic 6: Marketing Jobs 47-50 Topic 7: Marketing Organization 51-54 Topic 8: Marketing Leadership 55-60 Topic 9: Marketing Analytics 61-71 Preview of Next Survey 72 Overview of Results

5. Topic 1: Marketplace Dynamics

6. © Christine Moorman 6 Marketer optimism for U.S. economy reaches highest point in 4 years Figure 1.1. How optimistic are you about the overall U.S. economy on a 0-100 scale with 0 being the least optimistic and 100 the most optimistic? AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 47.7 56.5 57.8 55.6 63.3 52.2 63.4 58.40 62.70 65.7 40 50 60 70 80 February 2009 August 2009 February 2010 August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Marketer Optimism About Overall Economy

7. © Christine Moorman 7 Optimists more than triple since 2009 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 1.2. Are you more or less optimistic about the overall U.S. economy compared to last quarter? 59.3% 13.2% 25.7% 37.3% 14.9% 49.5% 0% 10% 20% 30% 40% 50% 60% 70% February 2009 August 2013 Percentage of Respondents Less Optimistic No Change More Optimistic

8. © Christine Moorman 8 Optimism for US economy has grown by 30%+ across sectors AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 48.0 45.3 46.0 50.8 65.4 65.2 67.1 65.8 0 20 40 60 80 B2B Product B2B Service B2C Product B2C Service February 2009 August 2013 36% 44% 46% 30% XX% Change between February 2009 and August 2013 Figure 1.3. Optimism for U.S. economy by sector

9. © Christine Moorman 9 Marketer optimism for own companies and overall economy closest in four years AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 1.4. How optimistic are you on a 0-100 scale with 0 being the least optimistic and 100 the most optimistic? 47.7 56.5 57.8 55.6 63.3 52.2 63.4 58.4 62.7 65.7 64.2 66.7 70.0 69.5 73.2 69.8 72.8 69.6 72.4 72.2 40 50 60 70 80 90 100 February 2009 August 2009 February 2010 August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Optimism for Overall Economy Optimism for Own Company

10. © Christine Moorman 10 Channel partner outcomes to improve in next 12 months AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 1.5. Channel metrics in next 12 months 36.0% 47.0% 41.7% 38.6% 53.7% 14.0% 18.0% 30.1% 21.4% 19.6% 24.0% 33.0% 29.9% 30.4% 43.9% 0% 10% 20% 30% 40% 50% 60% August 2009 August 2010 August 2011 August 2012 August 2013 Percentage of Respondents Increased partner purchase volume Increased partner price per unit Increased partner purchase of related products and services from my firm

11. © Christine Moorman 11 Competitor metrics show increased intensity: More competitors, more rivalry, more price-cutting AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Measured on 7-point scale where 1=not at all likely and 7=very likely 5.3 5.4 5.5 4.8 4.9 5.0 4.5 4.7 4.7 3.5 3.8 3.7 3.4 3.5 3.7 3.3 3.4 3.5 3 4 5 6 August 2011 August 2012 August 2013 More intense rivalry for customers More competitor price-cutting More competitor innovation More cooperation on non-price strategies Emergence of new domestic competitors Emergence of new global competitors Figure 1.6. Competitor metrics in next 12 months

12. Topic 2: Firm Growth Strategies

13. © Christine Moorman 13 Firms decrease market penetration and move toward riskier growth strategies in next year Existing Products/ Services New Products/ Services Existing Markets Market Penetration Strategy Product/Service Development Strategy New Markets Market Development Strategy Diversification Strategy * % of spending across growth strategies Growth Strategy Actual Spending in Past 12 Months Expected Spending in Next 12 Months Percent Change Expected Market Penetration Strategy 53.4% 47.0% -12.0% Market Development Strategy 15.0% 16.9% +12.7% Product/Service Development Strategy 22.1% 24.6% +11.3% Diversification Strategy 9.4% 11.6% +23.4% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Types of growth strategies Table 2.1. How growth spending is expected to change*

14. © Christine Moorman 14 Growth strategies vary by sector: B2C-product companies to emphasize market development over product development B2B Product B2B Service B2C Product B2C Service Market Penetration Strategy -12.7% -13.6% -14.1% -9.2% Market Development Strategy +5.7% +13.0% +43.2% +7.5% Product/Service Development Strategy +14.5% +19.8% -0.4% +12.3% Diversification Strategy +23.9% +17.7% +21.6% +29.6% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Table 2.2. Expected changes in sector growth spending in next 12 months relative to prior year • B2C-product companies show a dramatic shift away from market penetration (-14.1%) and product/ service development (-0.4%) to market development strategies (+43.2%) and diversification (+21.6%). • All other sectors move towards product/service development and diversification. Notable Shifts

15. © Christine Moorman 15 Companies to increase organic growth and partnership strategies in next year Strategy Aug-12 Aug-13 % Change Organic Growth 68.9% 71.4% +3.6% Growth via Acquisitions 12.2% 9.5% -22.1% Growth from Partnerships 12.9% 13.6% +5.4% Growth from Licensing 6.1% 5.5% -9.8% * Percentage of spending across growth strategies Strategy B2B Product B2B- Service B2C- Product B2C- Service Organic Growth 68.9% 72.4% 73.0% 73.3% Growth via Acquisition 12.8% 8.2% 6.2% 8.5% Growth from Partnerships 12.7% 14.7% 12.6% 14.7% Growth from Licensing 5.6% 4.7% 8.2% 3.5% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Table 2.3. How firms will grow in the next 12 months* Table 2.4. Sector use of growth strategies*

16. © Christine Moorman 16 Sales from international markets 20% of overall company sales AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 18.7% 19.3% 24.7% 32.4% 19.6% 19.5% 20.5% 0% 5% 10% 15% 20% 25% 30% 35% August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Figure 2.1. Percentage of company sales expected to be international in next 12 months

17. © Christine Moorman 17 Canada, Western Europe, and China remain U.S. firms’ highest revenue growth markets Figure 2.2. Highest international revenue growth markets (% respondents) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 19.7% 23.7% 15.6% 17.3% 0% 5% 10% 15% 20% 25% 30% February 2012 August 2012 February 2013 August 2013 Figure 2.3. Average change in growth of highest revenue international markets Western Europe 24% China 18% Canada 18% Brazil 7% Mexico 6% Middle East 5% Eastern Europe 3% Japan 3% Southeast Asia 3% Australia 2% India 2% Russia 2% Korea 1% Other South Americas 2% Other 4%

18. © Christine Moorman 18 Russia, India, and Korea show biggest sales increases during the last year AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 2.4. Considering this international market, by what percent did your sales revenue increase in the last 12 months? (reported by market) 57% 38% 32% 26% 26% 26% 25% 19% 17% 16% 16% 13% 12% 10% 22% 0% 10% 20% 30% 40% 50% 60% Russia India Korea Middle East Australia China Argentina Brazil Canada Mexico Western Europe Eastern Europe Southeast Asia Japan Other

19. Topic 3: Marketing Spending

20. © Christine Moorman 20 Growth in marketing budgets drops AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 0.5% 1.1% 5.9% 9.2% 6.7% 9.1% 8.1% 6.4% 6.1% 4.3% 0% 2% 4% 6% 8% 10% 12% February 2009 August 2009 February 2010 August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Change in Marketing Spending Figure 3.1. Percent change in marketing budgets in next 12 months

21. © Christine Moorman 21 Biggest drop in marketing spending is B2C- product sector (from 9.2% to 4.1%) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 3.2. Sector differences in marketing budgets 13.2% 5.7% 4.2% 3.5% 6.2% 6.2% 7.1% 4.5% 3.3% 8.6% 9.2% 4.1% 4.6% 6.8% 6.7% 5.4% 0% 2% 4% 6% 8% 10% 12% 14% February 2012 August 2012 February 2013 August 2013 B2B Product B2B Service B2C Product B2C Service

22. © Christine Moorman 22 Digital marketing spend levels off at 10% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 3.3. Change in digital marketing spending 10.2% 9.5% 12.2% 13.6% 12.1% 11.2% 12.8% 11.5% 10.2% 10.1% 8% 10% 12% 14% 16% February 2009 August 2009 February 2010 August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013

23. © Christine Moorman 23 Marketing spending on traditional advertising continues to plummet AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Refers to media advertising not using the web. 1.3% -0.8% -1.9% -2.7% -2.1% -3% -2% -1% 0% 1% 2% 3% August 2011 February 2012 August 2012 February 2013 August 2013 Figure 3.4. Percent change in traditional advertising* spend in next 12 months

24. © Christine Moorman 24 Industry differences in digital vs. traditional advertising spend AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace B2B Product B2B Services B2C Product B2C Services Digital marketing spend +8.2% +10.5% +14.6% +10.4% Traditional advertising* spend -4.1% -2.2% -0.6% -5.4% *Refers to media advertising not using the web. Table 3.1. Change in digital and traditional advertising spending in next 12 months by sector

25. © Christine Moorman 25 All other marketing spend categories remain positive, but slower growth expected Aug-12 Feb-13 Aug-13 Overall marketing spending 6.4% 6.1% 4.3% Traditional advertising* spending -1.9% -2.7% -2.1% Digital marketing spending 11.5% 10.2% 10.1% New product introductions 9.4% 8.0% 7.1% New service introductions 6.4% 5.8% 4.9% Customer relationship management 9.0% 8.1% 6.0% Brand building 7.5% 6.8% 4.6% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Refers to media advertising not using the web. Table 3.2. Percent change in marketing spending in next 12 months

26. © Christine Moorman 26 Investments in marketing knowledge positive but drop over time Aug-12 Aug-13 % Change Marketing research and intelligence 8.2% 6.6% -19.5% Marketing consulting services 3.3% 1.6% -51.5% Developing knowledge about how to do marketing* 5.8% 3.8% -34.5% Integrating what we know about marketing 8.2% 4.2% -48.8% Marketing training* 7.2% 3.6% -50.0% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Developing knowledge about how to do marketing refers to the development of new marketing capabilities, while marketing training involves transferring existing marketing knowledge to employees Table 3.3. Changes in firm spending on marketing knowledge in next 12 months

27. © Christine Moorman 27 Marketing budgets as percent of firm budgets tick down AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Question asked in Feb-11 for the first time. 8.1% 10.0% 10.4% 11.4% 10.6% 9.4% 0% 2% 4% 6% 8% 10% 12% 14% 16% February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Figure 3.5. Marketing budget as a percent of firm budget*

28. © Christine Moorman 28 Who has the biggest marketing budgets? B2C-product companies, large companies ($1B or more in sales), and more than 10% of sales from internet Table 3.5a. Marketing percentage of firm budget by economic sector B2B Product B2B Services B2C Product B2C Services February 2012 8.7% 8.2% 16.1% 16.8% February 2013 10.6% 10.1% 16.3% 10.9% August 2013 8.3% 7.0% 14.3% 10.7% <$25 Million $26-99 Million $100-499 Million $500-999 Million $1-9.9 Billion >$10 Billion February 2012 10.7% 12.3% 13.5% 4.7% 6.7% 8.8% February 2013 12.6% 8.8% 10% 7.8% 9.4% 11.5% August 2013 9.8% 7.4% 7.1% 8.4% 10.7% 10.2% 0% Internet Sales 1-10% Internet Sales >10% Internet Sales February 2012 8.4% 9.5% 18.0% February 2013 10.3% 8.1% 14.4% August 2013 7.9% 8.9% 13.7% Table 3.5b. Marketing percentage of firm budget by company sales revenue Table 3.5c. Marketing percentage of firm budget by company internet sales AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace

29. © Christine Moorman 29 Marketing spending as a percentage of firm revenues 7.8% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Question asked in Feb-12 for the first time. Figure 3.6. Marketing spending as a percentage of firm revenues* 8.5% 11.0% 7.9% 7.8% 6% 7% 8% 9% 10% 11% 12% February 2012 August 2012 February 2013 August 2013

30. © Christine Moorman 30 Marketing spending as a percentage of firm revenues by firm and industry Table 3.6a. Marketing spending as a percentage of firm revenues by economic sector B2B- Product B2B- Services B2C- Product B2C- Services August 2012 11.4% 11.9% 9.8% 16.1% February 2013 8.8% 7.7% 9.4% 9.2% August 2013 6.0% 5.2% 13.1% 10.9% <$25 Million $26-99 Million $100-499 Million $500-999 Million $1-9.9 Billion >$10 Billion August 2012 17.8% 10.7% 10.6% 9.4% 6.1% 13.1% February 2013 11.1% 6.0% 8.6% 3.5% 5.5% 6.0% August 2013 8.9% 8.7% 6.0% 4.4% 5.9% 13.1% 0% Internet Sales 1-10% Internet Sales >10% Internet Sales August 2012 11.0% 9.3% 18.3% February 2013 6.8% 5.7% 13.0% August 2013 5.9% 6.8% 13.1% Table 3.6b. Marketing spending as a percentage of firm revenues by company sales revenue Table 3.6c. Marketing spending as a percentage of firm revenues by company internet sales AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace

31. © Christine Moorman 31 Companies lack quantitative metrics to demonstrate impact of marketing spending on the business Figure 3.7. Short-term and long-term impact of marketing spend on business AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace New question in The CMO Survey 36.3% 45.7% 17.9% 31.7% 50.0% 18.3% 0% 10% 20% 30% 40% 50% 60% We prove the impact quantitatively We have a good qualitative sense of the impact, but not a quantitative impact We haven't been able to show the impact yet Which best describes how your company shows the short-term impact of marketing spend on your business? Which best describes how your company shows the long-term impact of marketing spend on your business?

32. Topic 4: Financial and Marketing Performance

33. © Christine Moorman 33 Company performance on financial metrics holds AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 4.1. Percent change in firm performance in prior 12 months 2.2% 4.0% 3.8% 4.0% 4.1% 1.8% 3.4% 3.4% 3.3% 3.3% 2.2% 2.7% 3.0% 3.2% 3.1% 0% 1% 2% 3% 4% 5% August 2010 February 2010 August 2011 August 2012 August 2013 Firm sales Firm profits Marketing ROI

34. © Christine Moorman 34 Performance on key customer and brand assets also holds AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 4.2. Percent change in company performance on customer and brand metrics in prior 12 months 2.6% 2.6% 3.2% 3.3% 3.4% 1.4% 1.6% 1.7% 2.0% 2.0% 3.2% 2.9% 3.5% 3.4% 3.1% 0% 1% 2% 3% 4% August 2009 August 2010 August 2011 August 2012 August 2013 Customer acquisition Customer retention Brand value

35. © Christine Moorman 35 Company performance by sector B2B- Product B2B- Services B2C- Product B2C- Services Firm sales 3.5% 4.5% 4.3% 3.5% Marketing return on investment 2.4% 3.8% 3.2% 3.4% Firm profits 2.3% 4.3% 3.8% 2.7% Customer acquisition 3.2% 3.6% 3.6% 3.2% Customer retention 1.5% 2.5% 2.8% 1.2% Brand value 2.9% 3.6% 2.8% 2.9% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Table 4.1. Sector performance metrics for prior 12 months

36. © Christine Moorman 36 Firm performance goals remain strong Actual firm performance in prior 12 months Goal in the next 12 months Expected change in next 12 months Firm sales 4.1% 6.5% +58.5% Marketing return on investment 3.1% 5.0% +61.3% Firm profits 3.3% 5.8% +75.8% Customer acquisition 3.4% 5.8% +70.6% Customer retention 2.0% 4.2% +110.0% Brand value 3.1% 5.2% +67.7% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Table 4.2. Company performance and goals

37. © Christine Moorman 37 1.1% 5.9% 20.2% 19.5% 29.8% 16.5% 7.0% 0% 10% 20% 30% 40% 1=Very Weak 2=Weak 3=Fair 4=Good 5=Strong 6=A leader, but not one of the best 7=Excellent, one of the best in the world Marketing excellence ratings flat AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Question: How would you rate your company’s marketing excellence? Figure 4.3. Ratings of marketing excellence in companies • Aug-2013: Mean = 4.5 (SD = 1.4) • Feb-2013: Mean = 4.5 (SD = 1.4) • Aug-2012: Mean = 4.4 (SD = 1.4) Key Metrics

38. © Christine Moorman 38 Marketing that is beneficial for society ticks down during recession Figure 4.4. Rate your firm on each the following non-financial metrics during the last 12 months (1=Poor and 5=Excellent) 3.2 3.2 3.1 3.0 3.0 3.0 2.9 3.0 2.8 3 3.2 3.4 August 2010 February 2011 February 2012 August 2013 Marketing that is beneficial for society Minimize the impact of marketing on the ecological environment AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace

39. 3939 Topic 5: Marketing and Social Media

40. © Christine Moorman 40 Social media spending growth continues: Expected to be 16% of marketing budgets in five years AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 6.6% 9.1% 15.8% 0% 5% 10% 15% 20% 25% Current Levels Over Next 12 Months In Next 5 Years Percentage of Total Marketing Budget (%) Figure 5.1. Social media spending as a percentage of marketing budgets

41. © Christine Moorman 41 Social media spending across sectors AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace B2B - Product B2B - Services B2C - Product B2C – Services Overall Current Social Media Spending 5.0% 7.8% 7.3% 7.7% 6.6% Social Media Spending in the next 12 months 7.1% 9.8% 10.4% 10.7% 9.1% Social Media Spending in the next 5 years 13.3% 15.5% 19.5% 18.6% 15.8% Table 5.1. Changes in social media spending across sectors

42. © Christine Moorman 42 Social media integration gap not closing Question: How effectively is social media linked to your firm’s marketing strategy? (1=not integrated, 7=very integrated) Results: Social media remains poorly integrated with marketing strategy: • Aug, 2013: Mean = 3.9, SD = 1.9 • Feb, 2013: Mean = 3.8, SD = 1.9 • Aug, 2012: Mean = 3.8, SD = 1.9 • Feb, 2012: Mean = 3.8, SD = 1.9 • Feb, 2011: Mean = 3.8, SD = 2.0 Mean (SD) Aug-2013 B2B-Product 3.4 (1.9) B2B-Services 4.1 (1.8) B2C-Product 4.5 (1.9) B2C-Services 4.0 (1.6) Table 5.2. Social media integration scores by sector AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 14.1% 14.5% 14.8% 12.5% 23.8% 12.1% 8.2% 0% 10% 20% 30% 1 Not at all Integrated 2 3 4 5 6 7 Very Integrated Figure 5.2. How well social media is integrated with marketing strategy? Percent of Respondents (%)

43. © Christine Moorman 43 Poor integration of customer information across channels Question:. How effectively does your company integrate customer information across purchasing, communication, and social media channels (1=not at all, 7=very effectively) Results: • Aug 2013: Mean = 3.4, SD = 1.6 • Aug 2012: Mean = 3.7, SD = 1.6 Average integration across all purchasing, communication, and social media channels Mean (SD) B2B-Product 3.0 (1.6) B2B-Services 3.6 (1.5) B2C-Product 3.8 (1.6) B2C-Services 3.4 (1.6) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Table 5.3. Customer information integration gap across sectors

44. © Christine Moorman 44 Half of all firms haven’t been able to show the impact of social media on their business AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 5.3.. Which best describes how you show the impact of social media on your business? We haven't been able to show the impact yet 49% 36% 15% We have proven the impact quantitatively We have a good qualitative sense of the impact, but not a quantitative impact

45. © Christine Moorman 45 Use of online customer behavior data expected to increase over time AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Yes 40.5%No 59.5% 88.5% 11.5% 0.0% 0% 20% 40% 60% 80% 100% Increasing About the same Decreasing Figure 5.4. Does your company use customer behavior data collected online for targeting purposes? Figure 5.5. Is your company's use of such data increasing, decreasing, or staying the same over time?

46. © Christine Moorman 46 Privacy concerns loom over use of online customer data to target: 50% of marketers have low levels of concern AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 5.6. How worried are you that the use of online customer data could raise questions about privacy? Mean = 3.5 (SD = 1.8) 15.9% 19.5% 14.2% 15.0% 18.6% 13.3% 3.5% 0% 5% 10% 15% 20% 25% 1 Not At All Worried 2 3 4 5 6 7 Very Worried ~50%

47. Topic 6: Marketing Jobs

48. © Christine Moorman 48 Marketing hiring to increase 5.5% next year AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 4.0% 6.2% 7.2% 5.2% 6.5% 5.4% 5.5% 3% 4% 4% 5% 5% 6% 6% 7% 7% 8% August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Percentage Increase in Marketing Hires in Next 12 Months Figure 6.1. Percentage change in marketing hires planned in next 12 months

49. © Christine Moorman 49 B2B-product companies to hire the most AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 6.2. Percentage change in marketing hires planned in next 12 months 4.4% 3.1% 3.4% 4.9% 7.2% 4.3% 5.2% 2.9% 2% 3% 4% 5% 6% 7% 8% B2B - Product B2B - Services B2C - Product B2C - Services February 2013 August 2013

50. © Christine Moorman 50 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Outsourcing of marketing drops off 4.3% 4.5% 9.3% 3.2% 3.1% 3.5% 2.6% 0% 2% 4% 6% 8% 10% 12% 14% August 2010 February 2011 August 2011 February 2012 August 2012 February 2013 August 2013 Figure 6.3. Percentage of company marketing expected to be outsourced in next 12 months

52. © Christine Moorman 52 Presence of marketing employees in the firm decreases over two years. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 7000 7100 7200 7300 7400 7500 7600 7700 7800 7900 Figure 7.1. Number of Employees (Marketing vs. Non Marketing) (August 2013) Figure 7.2. Marketing Employees as a Percentage of Total Employees Marketing Employees (90) Non-Marketing Employees (7690) 4.2% 3.1% 1.2% 0% 1% 2% 3% 4% 5% August 2011 August 2012 August 2013

53. © Christine Moorman 53 Product/service organizational structure dominates AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Percentage of Firms (%) 26.5% 73.5% 28.6% 71.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Customer Groups Product/Service Groups February 2013 August 2013 Figure 7.3. Organizational structure in companies

54. © Christine Moorman 54 External focus drops off as recovery strengthens *7-point scale where 1 =“not at all” and 7 = “very frequently” AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 7.4. Company outside-in approach to strategy Information about customers and competitors … * 5.3 4.9 4.8 5.0 5.1 5.0 5.1 4.6 4.7 4.7 4.8 4.7 5.1 4.5 4.5 4.6 4.8 4.7 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 Is collected on a regular basis Is shared vertically across different levels of the firm and business units Is shared horizontally across different functions and business units Shapes the design of firm strategies Influences the implementation of firm strategies Impacts the evaluation of firm strategies August 2011 February 2012 August 2013

55. Topic 8: Marketing Leadership

56. © Christine Moorman 56 Marketing leadership wanes Table 8.1. Percentage of companies in which marketing leads activity* Weaker marketing leadership: • Positioning • Promotion • Brand • Marketing analytics • Marketing research • Social media • Competitive intelligence • Market entry strategy • Innovation • Customer service Stronger marketing leadership: • Targeting/Market Selection • Sales • Pricing Maintaining marketing leadership: • Advertising • Public relations • Lead generation • New products • CRM • Stock market performance Activity Feb-11 Feb-12 Feb-13 Aug-13 Advertising 85% 85% 84% 83.9 % Positioning 79% 78% 82% 76.7 % Promotion 81% 79% 82% 80.3% Brand 81% 84% 84% 80.7% Marketing Analytics** - - 75.8% 69.1% Marketing research 73% 71% 76% 66.4% Social media 71% 73% 76% 74.9% Competitive intelligence 58% 62% 68% 55.6% Public relations 65% 53% 61% 62.3% Lead generation 53% 53% 56% 56.1% Market entry strategies 50% 46% 56% 54.7% New products 44% 52% 47% 48.4% CRM 38% 41% 41% 40.4% Targeting/Market selection 31% 35% 36% 39.9% Sales 32% 30% 24% 27.8% Pricing 30% 34% 31% 37.2% Innovation 33% 39% 35% 32.7% Customer service 22% 21% 24% 22.0% Stock market performance 0.4% 1.2% 2.3% 3.1% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace *Red indicates marketing’s influence has decreased, green indicates that marketing’s influence has increased, and changes of 1% or less are viewed as no change. **Marketing analytics added in Feb-13.

57. © Christine Moorman 57 Marketing leaders retained for 5+ years Years in current role B2B Product 4.7 B2B-Services 5.8 B2C-Product 4.9 B2C-Services 4.5 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 8.1. Marketing leader retention Table 8.2. Sector differences in retention (August 2013) 4.3 8.8 4.1 9.2 5.1 10.0 0 2 4 6 8 10 12 Top marketer time in current role in the firm Top marketer time in any role in the firm Years August 2011 August 2012 August 2013

58. © Christine Moorman 58 Marketer influence drops AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 7.2 7.3 6.0 8.6 5.6 6.9 17.0 15.4 25.4 24.6 17.5 16.1 0 5 10 15 20 25 30 August 2010 August 2011 February 2012 August 2012 February 2013 August 2013 Number of Reports Direct reports Indirect reports Figure 8.2. Number of people reporting to top marketer

59. © Christine Moorman 59 Increasing pressure to prove the value of marketing AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Yes 66.4% No 33.6% 60.1% 37.8% 2.0% 0% 10% 20% 30% 40% 50% 60% 70% Increasing pressure About the same amount of pressure Decreasing pressure Figure 8.3. Do you feel pressure from your CEO or Board to prove the value of marketing? Figure 8.4. Is this pressure increasing, decreasing, or about the same? New question in The CMO Survey

60. 60© Christine Moorman Best Practice from Marketing Leaders: See full interviews at www.cmosurvey.org/cmo-insights/ AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Senior Vice President and Chief Marketing Officer Beth Comstock discusses how GE approaches marketing: “You have to create a platform that invites innovative ideas.” This platform involves four capabilities that have produced an array of new products, services, customers, and business models. Chief Marketing Officer Kim Feil discusses how she built a marketing function. From insights to accountability, she describes the organization, processes, metrics, and talent management strategies important to this effort. Executive Vice President and Chief Marketing Officer Geert van Kuyck shares ideas on building the essential skill set for CMOs and the importance of defining the CMO’s mission. He discusses the use of the Net Promoter Score and other metrics to evaluate business results at Philips, touching on Philips’ engagement with LinkedIn and social media metrics. Executive Vice President and Chief Marketing Officer Stephen Quinn describes how Walmart rebuilt its customer focus. Key steps involved harnessing internal support, generating market insight, using customer-focused metrics, living the brand internally, and building marketing talent. Global Marketing Officer Marc Pritchard shares his viewpoints on how marketing contributes to P&G’s performance. He talks about how P&G learns about customers and how it is relentless in its attention to building loyal customers and strong brands in the store, on the web, and around the world.

61. Topic 9: Marketing Analytics

62. © Christine Moorman 62 Spending on marketing analytics expected to increase 40% in three years AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 5.5% 8.7% 0% 2% 4% 6% 8% 10% Current Levels In Next 3 Years Figure 9.1. Percent of marketing budget spent on marketing analytics

63. © Christine Moorman 63 Spending on marketing analytics by firm and industry characteristics AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Current In Next 3 years <$25M 4.1% 6.9% $26-99M 6.6% 10.4% $100-499M 3.9% 6.8% $500-999M 5.6% 8.0% $1-9.9B 7.2% 11.3% $10+B 6.7% 10.3% Table 9.1c. Firm size differences Table 9.1b. Firm internet sales differences Current In Next 3 years 0% 4.6% 7.8% 1-10% 6.2% 9.3% >10% 5.9% 9.6% Table 9.1a. Firm sector differences Current In Next 3 years B2B-Product 5.3% 8.7% B2B-Services 5.7% 8.8% B2C-Product 5.8% 9.2% B2C-Services 5.5% 8.8%

64. © Christine Moorman 64 Most projects fail to use marketing analytics; worsening trend as big data grows 64 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 9.2. Percentage of projects using marketing analytics in companies 37% 35% 30% 29% 20% 30% 40% 50% February 2012 August 2012 February 2013 August 2013

65. © Christine Moorman 65 Majority of companies do not evaluate marketing analytics AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 46.8% 53.2% 39.8% 60.2% 32.9% 67.1% 0% 20% 40% 60% 80% Evaluate quality Do not evaluate quality August 2012 February 2013 August 2013 Figure 9.3. Does your company formally evaluate the quality of marketing analytics?

66. © Christine Moorman 66 Contribution of marketing analytics to company performance drops AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 9.4. To what degree does the use of marketing analytics contribute to your company's performance? 1 = Not at all and 7 = Very highly 3.9 3.7 3.5 3.2 3.4 3.6 3.8 4 August 2012 February 2012 August 2013

67. © Christine Moorman 67 Breakdown of marketing analytics’ contribution to company performance AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 19.4% 13.8% 12.5% 18.5% 21.6% 11.2% 3.0% 0% 5% 10% 15% 20% 25% 1 Not at all 2 3 4 5 6 7 Very Highly Figure 9.5. To what degree does the use of marketing analytics contribute to your company's performance? Mean = 3.5 (SD = 1.8)

68. © Christine Moorman 68 Companies fail to leverage marketing analytics to answer challenging marketing questions AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 9.6. Is your company leveraging marketing analytics to answer its most challenging marketing questions? Mean = 3.7 (SD = 1.7) 13.7% 17.5% 12.0% 18.4% 22.6% 11.5% 4.3% 0% 5% 10% 15% 20% 25% 1 None of the time 2 3 4 Some of the time 5 6 7 All of the time New question in The CMO Survey

69. © Christine Moorman 69 Leveraging marketing analytics by industry and economic sectors AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Is your company leveraging marketing analytics to answer its most challenging marketing questions? Mean = 3.7 (SD = 1.7) Table 9.6b. Economic sector differences Sector Mean (SD) B2B-Product 3.5 (1.7) B2B-Services 3.4 (1.8) B2C-Product 4.4 (1.6) B2C-Services 4.1 (1.8) Table 9.6a. Industry sector differences Sector Mean (SD) Banking/Finance/Insurance 3.5 (1.8) Communications/Media 4.9 (1.2) Consumer Packaged Goods 4.4 (1.5) Energy 4.3 (1.5) Healthcare/Pharma. 3.9 (1.9) Manufacturing 3.0 (1.5) Mining/Construction 3.0 (2.0) Retail/Wholesale 3.6 (2.0) Service/Consulting 3.3 (1.7) Tech Software Biotech 4.0 (1.9) Transportation 4.6 (1.7)

70. © Christine Moorman 70 Most companies do not have the right talent to fully leverage marketing analytics AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 9.7. To what extent does your company have the right talent to fully leverage marketing analytics? Mean = 3.4 (SD = 1.7) 12.9% 25.4% 17.7% 16.8% 13.4% 10.3% 3.4% 0% 5% 10% 15% 20% 25% 30% 1 Does not have the right talent 2 3 4 5 6 7 Has the right talent New question in The CMO Survey

71. © Christine Moorman 71 Where marketing analytics is used to drive decision making in companies AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Figure 9.8. Check all of the areas in which you are using marketing analytics to drive decision making 31.7% 28.5% 27.6% 23.7% 23.2% 22.0% 21.7% 21.0% 18.8% 13.4% 7.3% 2.4% 0% 10% 20% 30% 40% Customer acquisition Digital marketing Customer retention Promotion Pricing Branding Marketing mix Social media Product line/assortment optimization Multichannel marketing Recommendation engine Other areas: New question in The CMO Survey

72. © Christine Moorman 72 Preview 72 Next survey: The CMO Survey will be administered in January 2014 To participate: Sign up here Media: Press releases and coverage Feedback: Send comments to moorman@duke.edu © Christine Moorman

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