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The CMO Survey Highlights and Insights August 2015

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Highlights and insights from the August 2015 CMO Survey.

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The CMO Survey Highlights and Insights August 2015

  1. 1. 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. - The survey is an objective source of information about marketing. It is a non-commercial service dedicated to the field of marketing, not the sale of products and services. Survey Operation - Founded in August 2008, The CMO Survey is administered twice a year via an Internet survey. Many questions repeat to observe trends over time. - The August 2015 survey was the 14th administration of The CMO Survey. Sponsoring Organizations About The CMO Survey 2
  2. 2. Survey Sample - 2885 top U.S. marketers at Fortune 1000, Forbes Top 200, and top marketers who are AMA Members or Duke University Alumni and Friends - 255 responded for a 8.8% response rate Survey Administration - Email contact with four follow-up reminders - Survey in field from July 14, 2015- August 2, 2015 - 92% 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 Survey methodology 3
  3. 3. Topic 1: Marketplace Dynamics……………………………………………………… 5-10 Topic 2: Firm Growth Strategies…………………………………………………….. 11-15 Topic 3: Marketing Spending………………………………………………………… 16-23 Topic 4: Financial and Marketing Performance……………………………………. 24-28 Topic 5: Marketing and Social Media ………………………………..…………….. 29-38 Topic 6: Marketing Jobs…………………………………………………………….... 39-41 Topic 7: Marketing Organization…………………………………………………….. 42-44 Topic 8: Marketing Leadership……………………………………………………..... 45-49 Topic 9: Marketing Analytics………………………………………………………..... 50-58 Survey topics 4
  4. 4. Marketers maintain positive outlook for U.S. economy Figure1.1. How optimistic are you aboutthe overall U.S. economyon a 0- 100 scale with 0 being least optimistic and 100 most optimistic? 6 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace B2B Product 70.2 B2B Services 68.6 B2C Product 72.8 B2C Services 68.4 47.7 56.5 57.8 55.6 63.3 52.2 63.4 58.4 62.7 65.7 66.1 66.4 69.9 69.7 40 50 60 70 80 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Marketer Optimism About Overall Economy
  5. 5. Optimists dominate pessimists 4-to-1 7 Figure1.3. Are you more or less optimistic aboutthe overall U.S. economycompared to last quarter? AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace More Optimistic 45.5% Less Optimistic 12.9% No Change 41.6%
  6. 6. All customer forecasts soften Figure1.4. Forecasted customer outcomesin next 12 months(% of respondents) 8 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 78% 72% 66% 52% 51% 34% 74% 69% 57% 47% 47% 32% 0% 20% 40% 60% 80% 100% Increased acquisition of new customers Increased customer purchase volume Increased purchase of related products & services Increased customer retention Increased entry of new customers into the market Increased customer price per unit February 2015 August 2015
  7. 7. Figure1.5. Customers’top priorityin next 12 months(% of respondents) Superior product and service excellence top forecasted customer priorities 9 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 26% 24% 18% 17% 12% 3% 0% 5% 10% 15% 20% 25% 30% Superior Product Quality Excellent Service Trusting Relationship Low Price Superior Innovation Brand August 2015
  8. 8. Increased competition for customers, price, and innovation expected Figure1.5. Increased competitor interactionsin next 12 months(% of respondents) 10 *Question format used for the first timeAugust-2014. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 69% 59% 56% 41% 35% 23% 77% 66% 63% 50% 46% 29% 0% 20% 40% 60% 80% 100% More intense rivalry for customers More competitor price-cutting More competitor innovation Emergence of new domestic competitors Emergence of new global competitors More cooperation on non-price strategies August 2014 August 2015 *Question asked yearly in August.
  9. 9. Firms to decrease market penetration and emphasize riskier growth strategies next year Types of growth strategies Existing Products/ Services New Products/ Services Existing Markets Market Penetration Strategy Product/Service Development Strategy New Markets Market Development Strategy Diversification Strategy * % of spending for each growth strategy Growth Strategy Actual Spending in Past 12 Months Expected Spending in Next 12 Months Percent Change Expected Market Penetration Strategy 56.8% 50.3% -11.4% Market Development Strategy 17.4% 18.1% +4.0% Product/Service Development Strategy 17.9% 20.8% +16.2% Diversification Strategy 7.8% 10.7% +37.2% Table 2.1. Currentand future growth spending* 12 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  10. 10. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Percent of sales through Internet flattens Figure2.2. Percent of companysales from internet 13 Feb-15 Aug-15 B2B Product 10.2% 7.5% B2B Services 10.8% 9.2% B2C Product 13.2% 15.2% B2C Services 21.7% 13.9% 9.2% 8.9% 9.9% 11.3% 12.4% 10.3% 0% 5% 10% 15% Feb-12 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15
  11. 11. Percent of sales from domestic markets declines 14 Figure2.3. Percent of companysales from domestic markets AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 77.6% 79.4% 77.5% 79.4% 85.4% 81.0% 70% 75% 80% 85% 90% Feb-12 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 B2B Product 71.2% B2B Services 85.5% B2C Product 78.7% B2C Services 93.5%
  12. 12. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace International markets: current sales and future growth opportunities Countries/ Regions(%) Largest future opportunity China 19.3% Western Europe 13.8% South America, not Brazil 8.3% Indonesia and SE Asia 7.3% Brazil 5.5% Canada 5.5% Mexico 5.5% Eastern Europe 4.6% Central America 4.6% Middle East 4.6% India 4.6% Countries/ Regions(%) Largest current (in terms of sales) Western Europe 41.0% Canada 15.2% China 13.3% Middle East 7.6% Japan 3.8% Indonesia and SE Asia 2.9% India 2.9% Mexico 1.9% Korea 1.9% Eastern Europe 1.9% Northern Europe 1.9% South America, not Brazil 1.9% Table 2.2. Largest currentmarket in sales Table 2.3. Largest future market opportunities 15
  13. 13. Marketing budgets see-saw Figure3.1. Percent changein marketing budgetsin next 12 months 17 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 0.5% 1.1% 5.9% 9.2% 6.7% 9.1% 8.1% 6.4% 6.1% 4.3% 6.7% 5.1% 8.7% 5.5% 0% 2% 4% 6% 8% 10% 12% Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Change in Marketing Spending B2B Product 3.1% B2B Services 6.6% B2C Product 5.7% B2C Services 7.5%
  14. 14. Digital marketing spend up 12.2% in next year; traditional advertising spend down 2.1% *Refers to media advertising not using the Internet. Figure3.2. Percent changein traditionaladvertising* vs. digital marketing spend in next 12 months 18 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace -0.8% -1.9% -2.7% -2.1% -0.1% -3.6% -1.1% -2.1% 12.8% 11.5% 10.2% 10.1% 8.2% 10.8% 14.7% 12.2% -5% 0% 5% 10% 15% 20% Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Traditional Advertising Spend Digital Marketing Spend
  15. 15. B2C services sector to double digital investments in next year Figure3.3. Changein digital marketing spending in next 12 monthsby sector 19 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 11% 11% 12% 11% 9% 12% 8% 11% 14% 20% 0% 5% 10% 15% 20% 25% Overall B2B Product B2B Services B2C Product B2C Services August 2014 August 2015
  16. 16. Marketing spend on mobile expected to 160% in three years 20 B2B Product B2B Services B2C Product B2C Services Marketing budget spent on mobile now 5.1% 5.0% 8.6% 7.3% Marketing budget spent on mobile in next 3 years 14.4% 13.0% 19.8% 19.8% Figure3.4. Marketing budgetspend on mobile AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 6.0% 15.6% 0% 5% 10% 15% 20% Current Levels In Next 3 Years
  17. 17. Changes in marketing spend in next year Figure3.5. Percent changein marketing spending in next 12 months 21 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 0% 2% 4% 6% 8% 10% Feb-14 Aug-14 Feb-15 Aug-15 Customer Relationship Management Brand Building New Product Introductions New Service Introductions
  18. 18. *Question asked in Feb-11 for the first time. Marketing budgets represent 11% of overall firm budgets Figure3.6. Marketing budgetas a percent of firm budget* 22 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 8.1% 10.0% 10.4% 11.4% 10.6% 9.4% 10.9% 10.9% 10.1% 11.4% 6% 8% 10% 12% 14% Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 % Marketing Budget B2B Product 10.1% B2B Services 10.0% B2C Product 17.5% B2C Services 11.3%
  19. 19. Marketing spend as a percent of company revenues continues downward trend Figure3.7. Marketing spending as a percentageof companyrevenues* *Question asked in Feb-12 for the first time. 23 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 8.5% 11.0% 7.9% 7.8% 9.3% 8.3% 8.3% 6.6% 0% 3% 6% 9% 12% 15% Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 % Marketing Spend B2B Product 6.2% B2B Services 5.9% B2C Product 10.4% B2C Services 5.3%
  20. 20. Firm performance metrics in last year Overall B2B Product B2B Services B2C Product B2C Services Sales 3.8% 3.6% 3.9% 4.5% 3.6% Profits 3.1% 2.5% 3.4% 3.4% 3.3% Marketing ROI 2.8% 1.9% 3.7% 3.5% 1.8% Customer acquisition 2.9% 2.4% 3.1% 3.4% 2.6% Customer retention 1.7% 1.2% 2.5% 1.7% 1.0% Brand value 2.8% 1.5% 4.0% 3.1% 2.0% Table 4.1. Percent changein performance in prior 12 months 25 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  21. 21. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Downward trend for performance of customer and brand metrics Figure4.2. Percent changein performanceon customer and brand metrics in prior 12 months 26 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 0% 1% 2% 3% 4% 5% Feb-14 Aug-14 Feb-15 Aug-15 Customer acquisition Customer retention Brand value
  22. 22. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Mobile marketing underperforms Figure4.3. Rate the performanceof your company’smobilemarketing activities (7-point scale where 1=poor,7=excellent) 2.89 3.56 3.12 3.47 2.74 2.64 0 1 2 3 4 5 6 7 Customer acquisition Customer engagement Customer retention Delivering your brand message Sales Profits 27
  23. 23. Marketing excellence ratings show no improvement 28 Figure4.4. How would you rate your company’smarketing excellence?* (7-point scale where 1=Very Weak and 7=Leader) * Question asked in Aug-13 for the first time AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 4.5 4.5 4.7 4.5 4.6 4.5 4 4.2 4.4 4.6 4.8 5 Aug-13 Feb-13 Feb-14 Aug-14 Feb-15 Aug-15 Excellence rating
  24. 24. Social media spend continues to surge Figure5.1. Social media spending as a percent of marketing budgets 30 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 10.7% 14.0% 23.8% 0% 5% 10% 15% 20% 25% Current Levels Over Next 12 Months In Next 5 Years % of Marketing Budget
  25. 25. Social media spend across sectors Overall B2B Product B2B Services B2C Product B2C Services Current Social Media Spending 10.7% 8.3% 11.8% 13.7% 9.8% Social Media Spending in the next 12 months 14.0% 10.4% 16.1% 17.6% 13.1% Social Media Spending in the next 5 years 23.8% 18.4% 25.1% 30.1% 25.2% Table 5.1. Changesin social media spending across sectors 31 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  26. 26. Integration of social media and marketing strategy finally shows lift! 32 Figure5.2. How effectively is social media linked to your firm’s marketing strategy? (1=Not integrated, 7=Very integrated) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 3.8 3.8 3.8 3.8 3.9 3.8 3.9 3.9 4.2 1 2 3 4 5 6 7 Feb-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Mean Integration Level
  27. 27. Integration of customer information across channels worsens Figure5.3. How effectively does your companyintegrate customer information acrosspurchasing, communication,and social media channels? (1=Not At All Effectively, 7=Very Effectively) 33 *Question asked in Feb-11 for the first time. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 3.8 3.8 3.8 3.8 3.9 3.8 3.9 3.7 3.6 1 2 3 4 5 6 7 Feb-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Mean Integration Level
  28. 28. Social media activities increasingly performed by outside agencies 34 Figure5.4. Percent of company’ssocial media activities performedby outsideagencies AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 17.4% 18.9% 21.7% 15% 17% 19% 21% 23% 25% Feb-14 Feb-15 Aug-15
  29. 29. Only 15% of firms able to prove the impact of social media quantitatively Figure5.5.. Which best describes how you showthe impact of social media on your business? 35 B2B Product B2B Services B2C Product B2C Services We have proven the impact quantitatively 6.3% 17.1% 30.0% 13.3% We have a good qualitative sense of the impact, but not a quantitative impact 39.7% 50.0% 40.0% 40.0% We haven't been able to show the impact yet 54.0% 32.9% 30.0% 46.7% Haven't been able to show the impact yet 45%Have a good qualitative sense of the impact, but not a quantitative impact 40% Have a good qualitative sense of the impact, but not a quantitative impact 41.8% Haven't been able to show the impact yet 45.0% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Haven't been able to show the impact yet 41.5%Have a good qualitative sense of the impact, but not a quantitative impact 43.5% Have proven the impact quantitatively 15.0%
  30. 30. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace Metrics % Using Metric Hits/visits/page views 60.3% Site traffic 51.4% Clickthrough rates 47.9% Number of friends, followers, and likes 47.1% Conversion rates (from visitor to buyer) 28.8% Search volume(number of people searching for your brand) 28.4% Repeat visits 25.3% Social influence of friends, followers, and likes 23.7% Buzz indicators (web mentions) 21.4% Virality (extent to which your content/links are shared) 19.1% Brand sentiment ratings 16.7% Share of voice (compares your company to competitors on mentions) 16.0% Net promoter score 16.0% Number of inbound links 15.6% Revenue per customer 15.6% App download 14.8% Sales levels 14.0% Customer acquisition costs 12.5% Online product/service ratings 10.9% Metrics using analysis of online text 9.7% Profits per customer 6.6% Customer retention costs 6.2% Abandoned shopping carts 5.8% Four metrics dominate how companies show social media impact Table 5.2.. Which metrics does your companyuse to show the impact of social media? (check all that apply) 36
  31. 31. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace The state of company social media capabilities Capability Overall B2B product B2B services B2C product B2C services Developing social media strategies 4.1 3.6 4.4 4.4 4.0 Connecting marketing strategies and social media strategies 4.0 3.5 4.2 4.5 4.0 Executing social media strategies 4.0 3.5 4.3 4.4 3.8 Learning about what works and doesn’t work for social media 3.7 3.2 3.9 4.1 3.5 Hiring people to perform social media activities 3.5 3.0 3.8 3.9 3.6 Measuring the success of social media strategies 3.5 3.0 3.8 4.0 3.3 Training people to perform social media activities 3.4 2.9 3.7 3.8 3.3 Managing external social media partners and agencies 3.3 3.0 3.3 3.9 3.3 Table 5.3. How well has your companydeveloped strong knowledgeand skills in each social media area? (1=not at all, 7=excellent) 37
  32. 32. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace How companies learn to manage customers in social/digital Table 5.4. Check all of the approachesyour companyis using to learn abouthow to acquire, engage,and retain customersonline Learning approach Percent of companies using learning approach Online customer surveys 40.1% Online customer observations 25.7% Informal online interactions with customers 24.5% Offline informal interactions with customer 23.3% Offline customer surveys 23.0% Online customer experiments 19.1% Offline customer observations 18.3% My company is not using any digital tools for learning at this time 14.0% Offline customer experiments 10.1% Studying words or pictures used online by customers 6.2% Page number that mirrors format of others before it 38
  33. 33. Marketing hiring rebounds: B2B companies to hire more marketers Figure6.1. Percentage changein marketing hires planned in next 12 months 40 B2B Product 6.9% B2B Services 7.8% B2C Product 4.9% B2C Services 5.2% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 5.2% 6.5% 5.4% 5.5% 4.7% 3.8% 3.5% 6.6% 0% 3% 6% 9% 12% 15% Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Percentage Change in Marketing Hires in Next 12 Months
  34. 34. Marketers reflect 3.4 percent of employees in companies Employees Overall B2B Product B2B Services B2C Product B2C Services Total employees in company 7410 10264 2900 8155 10403 Marketing employees in company 255 327 318 197 37 Percent of marketers in company 3.4% 3.2% 11.0% 2.4% 0.4% Table 6.1. Marketing employeesas a percent of total employees AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 41
  35. 35. Marketing and sales are equal partners in most companies 43 Figure7.1. The marketing-sales relationship (% of respondents) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 70.3% 11.6% 11.0% 6.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Sales and marketing work together on an equal level We don't have a sales function Sales is in charge of marketing Sales is within the marketing function
  36. 36. Product/service structure dominates, but customer groups hold ground 44 Figure7.2. Organizationalstructurein companies AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace % customer groups B2B Product 27.1% B2B Services 45.3% B2C Product 18.5% B2C Services 12.0% 26.5% 26.7% 30.2% 29.4% 73.5% 73.3% 69.8% 70.6% 0% 20% 40% 60% 80% 100% Feb-13 Feb-14 Feb-15 Aug-15 Customer Groups Product/Service Groups
  37. 37. Marketing leadership gains and losses 46 Table 8.1. Percentageof companiesin which marketing leads activity Weaker marketingleadership: • Advertising • Promotion • Marketing research • New products • Innovation • Customer service Stronger marketingleadership: • Social media • Lead generation • Market entry strategies • Stock market performance Maintainingmarketing leadership: • Positioning • Brand • Public relations • Customer relationshipmanagement • Targeting/Marketselection • Sales • Pricing Activity Feb-11 Aug-15 Advertising 85% 82.7% Positioning 79% 80.1% Promotion 81% 76.3% Brand 81% 82.1% Marketing analytics* - 75.0% Marketing research 73% 70.5% Social media 71% 79.5% Competitive intelligence 58% 55.1% Public relations 65% 64.1% Lead generation 53% 55.8% Market entry strategies 50% 55.8% New products 44% 37.8% CRM 38% 39.1% Targeting/Market selection 31% 30.1% Sales 32% 32.1% Pricing 30% 30.8% Innovation 33% 23.1% Customer service 22% 19.9% Stock market performance 0.4% 3.8% *Marketing analytics addedin Feb-13. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  38. 38. Marketing leaders retained for an average of 4.5 years Figure8.1. Marketing leader retention 47 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 4.3 4.6 4.3 5.4 4.1 4.8 5.1 4.6 5.3 5.3 4.5 8.0 9.0 8.8 10.5 9.2 9.5 10.0 9.4 10.0 9.4 8.0 0 2 4 6 8 10 12 Aug-09 Aug-10 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Years top marketer in current role in the firm Years top marketer in any role in the firm
  39. 39. Marketers continue to lose reports Figure8.2. Number of people reportingto top marketer 48 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 6.0 8.6 5.6 6.9 5.5 5.1 5.0 25.4 24.6 17.5 16.1 16.3 10.9 6.0 0 5 10 15 20 25 30 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Feb-15 Aug-15 Number of direct reports Number of indirect reports
  40. 40. Best practices from marketing leaders See full interviews at www.cmosurvey.org/cmo-insights/ 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 views 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. 49
  41. 41. Spending on marketing analytics expected to increase 66% in three years Figure9.1. Percent of marketing budgetspent on marketing analytics 51 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 6.7% 11.1% 0% 3% 6% 9% 12% 15% Current Levels In Next 3 Years
  42. 42. Spending on marketing analytics by firm and industry characteristics Current In Next 3 years <$25M 5.2% 10.0% $26-99M 4.9% 8.5% $100-499M 4.1% 8.4% $500-999M 5.7% 9.1% $1-9.9B 10.0% 14.7% $10+B 11.7% 15.9% Table 9.1c. Firm size differences Table 9.1b. Firm Internet sales differences Current In Next 3 years 0% 6.0% 9.0% 1-10% 6.9% 12.9% >10% 8.1% 12.8% Table 9.1a. Firm sector differences Current In Next 3 years B2B Product 6.1% 11.0% B2B Services 7.8% 12.0% B2C Product 7.0% 10.7% B2C Services 5.1% 9.5% 52 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  43. 43. Only 31% of projects use available or request marketing analytics Figure9.2. Percentage of projects using available or requested marketing analytics* 53 *This question wasasked in Feb-12 for the first time. B2B Product 22.8% B2B Services 29.6% B2C Product 45.6% B2C Services 34.5% AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 37.0% 35.0% 30.4% 29.0% 32.5% 32.3% 29.0% 31.0% 10% 20% 30% 40% 50% Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Percentage using marketing analytics
  44. 44. Contribution of marketing analytics remains low Figure9.3. To what degreedoes the use of marketing analytics contributeto your company's performance?1 = Not at all and 7 = Very highly 54 *This question wasasked in Aug-12 for the first time. AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 3.9 3.7 3.5 3.7 3.7 3.2 3.7 2 3 4 5 6 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Mean Contribution Level
  45. 45. Marketing analytics contributions by sector and firm differences 55 To what degreedoes the use of marketing analytics contributeto your company's performance? (1=Not At All, 7=Very Highly) Table 9.2a. Industrysector differences Sector Mean (SD) Banking/Finance/Insurance 3.5 (2.0) Communications/Media 3.6 (2.3) Consumer Packaged Goods 4.3 (1.5) Energy 3.1 (1.9) Healthcare/Pharma. 4.0 (1.8) Manufacturing 2.5 (1.7) Mining/Construction 3.3 (2.1) Retail/Wholesale 3.9 (2.1) Service/Consulting 3.5 (1.9) Tech Software Biotech 3.8 (1.5) Transportation 3.4 (2.3) Sector Mean (SD) B2B Product 3.0 (1.7) B2B Services 3.9 (2.0) B2C Product 4.7 (1.3) B2C Services 3.9 (1.9) Table 9.2b. Economicsector differences Table 9.2c. Firm Internet sales differences Firm sales Mean (SD) 0% of sales 3.4 (1.9) 1-10% of sales 3.7 (1.6) >10% of sales 4.6 (1.8) AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  46. 46. Companies lack quantitative metrics to demonstrate marketing spending impact Figure9.4. Metrics for demonstrating impactof marketing spending on business 56 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace 36% 46% 18% 29% 48% 23% 0% 20% 40% 60% Proved the impact quantitatively Good qualitative sense of the impact, not quantitative Haven't been able to show the impact yet Short-Term Impact Long-Term Impact
  47. 47. How companies use marketing analytics to drive decision making is changing 57 Table 9.5. Percentageof companiesusing marketing analytics Greater use of marketing analytics: • Customer acquisition • Customer retention • Social media • Product line/assortment optimization • Branding • Promotion strategy • Marketing mix • Multichannel marketing Weaker use of marketing analytics: • Pricing strategy Activity Aug-13 Aug-15 Customer acquisition 31.7% 36.6% Customer retention 27.6% 30.7% Social media 21.0% 30.7% Segmentation* 29.2% Product or service strategy** 18.8% 20.2% Branding 22.0% 26.5% Pricing strategy 23.7% 21.8% New product or service development* 20.2% Promotion strategy 23.7% 29.2% Marketing mix 21.7% 31.5% Multichannel marketing 13.4% 16.3% *Question was asked for the first time in August2015 **This question was changed from “productline/assortmentoptimization”to “productor service strategy”in August2015 AnalyticsLeadershipOrganizationJobsSocial MediaPerformanceSpendingGrowthMarketplace
  48. 48. Next survey: January 2016 Participate: Sign up here Media: Press releases and coverage Feedback: Send comments to moorman@duke.edu Preview 58

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