What CMOs Are Focusing on in 2019
For the past decade, the CMO Survey, sponsored by Deloitte, Duke Fuqua, and the American Marketing Association, has sought to gain insight from the top marketing minds in US business.
Surveying a wide swath of American companies – from technology and professional services to manufacturing, healthcare, retail, and the financial sector – the report offers unique insight into the mood and outlook of those responsible for marketing their brands both at home and abroad.
For its 22nd edition, there are a few key takeaways from the B2B segments of the CMO Survey that deserve a closer look.
Marketplace Dynamics
Our first topic involves the marketplace, where CMOs are currently less optimistic than in the past. For the previous two reporting years, many C-suite marketers held a reasonably positive outlook, but it’s been tempered of late, especially for firms that don’t do a high volume of business online.
What the Numbers Say
The upswing, though, is that customers are more clear about what they’re seeking from firms. Many companies feel that honest relationships and low pricing will find equal footing alongside the usual demands of product quality and top-notch service over the next 12 months.
B2B respondents also have a straightforward vision on the customer outcomes within the next year with 70% or more projecting an increase in acquisitions, cross-selling, and the volume of customer purchases.
What the Numbers Mean
Consumers, no doubt, look for and demand a certain level of quality and customer service from their chosen brands. Now, however, they want more from those businesses than just a superior product or service. They want meaningful relationships built on trust.
Certainly, the rise in competitive pricing as a factor makes sense, but the value of the product and the company-customer relationship is now a leading consideration for buyers. This puts pressure on the producer to deliver.
Meaningful engagement, quality content to support the product or service, and an ongoing commitment to not just provide a business connection, but an emotionally rewarding one will help you solidify your company as one that customers trust.
Marketing Spending
B2B marketing spending can be tricky to define. Different industries, different companies, different needs. The CMO survey, though, details two common areas of current investment activity – brand awareness and customer service.
What the Numbers Say
Overall, firms continue to report positive growth in their budgets, even with numbers at their lowest point in three years. B2B spending remains strong, with expected budget growth over the next 12 months at 8.5% and 10.3% for B2B Product and B2B Services, respectively.
When it comes to how that spending specifically breaks down, brand identity and customer relations are the two areas that will receive the most marketing attention over the next 12 months.
The report also reflects B2B’s focus on increased marketing knowledge capability and training and development, with the latter’s spending increasing to its highest levels in the past half decade.
What the Numbers Mean
There’s a concerted effort underway for companies in all industries to focus on building their identities and their internal support teams. This push makes it clear that all business segments, and B2B firms, in particular, aim to get smarter and invest in the workforce to help make it happen.
This is critical for future competitiveness. Not only does it promote consistent messaging from top to bottom and across all audiences you hope to reach, but it ensures your team meets the needs and provides the solutions your customers seek.
Even if you outsource a segment of your marketing initiatives, do so with an agency that shares your vision and commitment to your brand and your customer.
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Firm Performance
For B2B financial performance metrics, the outlook is positive. Market share, profits, and ROI are on solid footing with each reaching three-year highs as of February 2019.
What the Numbers Say
Measured over the past 12 months, these three indicators, along with sales revenue, averaged 4.2% growth for B2B Services. B2B Products saw an average change of 3% for those four metrics during the year-long period.
For brand and customer acquisition performance indicators, the results were equally as good. Brand value matched a three-year high while customer acquisition exceeded their top level in the same timeframe.
What the Numbers Mean
Ultimately, even as firms turn a bit more conservative in their marketing outlook, there are gains to be made for both B2B segments.
Social Media Marketing
What some consider the linchpin of modern marketing is starting to experience its share of growing pains. Many high-level marketers are rethinking their approach to social media and instead relying heavily on SEO.
What the Numbers Say
Social media spending is down across all economic sectors from a 10-year high of 15% of marketing budgets in August 2018 to around 11% as of February 2019. It’s the most significant social media spending decline in the past decade.
Much of the drop is attributable to a sense that social media is at best a marginal contributor to business performance. It’s a long-held view too, as the performance numbers have not changed much over the past three years of the CMO survey.
However, these same marketers are quite bullish on SEO, as it continues to have a high ROI.
What the Numbers Mean
The level of spend per company is often dictated by how much of their sales originate from the internet, but the more consistent commitment to SEO versus social media proves that SEO is a more reliable investment.
Social media marketing is changing, and it still has plenty of maturation before it’s a real revenue generator. As it stands, social media is mainly relied upon to increase brand exposure and get the word out on new products and services.
For a more direct online impact to a B2B’s revenue – regardless if they’re in the Product or Service segment – SEO remains the go-to for the majority of marketers.
Mobile Marketing
Speaking of reaching clients online, few subjects have garnered more attention than our increasingly mobile world. As this transiency has increased, businesses have begun recognizing the need to meet customers where they spend the majority of their time.
What the Numbers Say
Spend on mobile marketing is skyrocketing – from 3.7% in marketing budgets in February 2017 to 11.2% two years later. In five years, it’s expected to climb close to 20%.
Those are big jumps. It may be surprising to learn they come even though many in the survey have yet to see a considerable benefit from mobile marketing towards their company’s overall performance. That said, the outlook on performance remains on a steady – if slow – upward trend and CMOs are keeping an eye on the future.
The level of commitment to mobile marketing directly parallels a firm’s online sales numbers.
What the Numbers Mean
Mobile marketing matters – a lot. Even with B2B firms not yet seeing a considerable increase in performance-specific benefits, they are planning for the day within the next few years when it happens.
For a CMO, the critical takeaway is to prepare now. Customers are becoming more mobile, not less, across all business segments. Your online presence should be bold and optimized for mobile engagement – from images and videos to forms and apps. A company on the move will capture the attention of customers moving in the same direction.
Marketing Leadership
Companies rely on the CMO to deliver the best possible marketing outcomes, but there is a disconnect among their peers – and more importantly, their superiors – about what those outcomes should be.
What the Numbers Say
In B2B marketing, both Product and Service CMOs overwhelmingly state that driving growth is the top challenge they face in their leadership role. Jostling for positions two through five is a variation of enhancing brand awareness, nailing down a workable marketing budget, proving out marketing ROI, and securing the best marketing talent.
As it relates to communication challenges, showing the impact their marketing efforts have on the financial outcomes of their company ranked at the top – well ahead of any other concern.
The implied disconnect at the C-suite level goes further. Only a third of marketers surveyed view their role as very clearly defined, even as their efforts lead the way on essential activities such as digital marketing, analytics, lead generation, customer experience, and revenue growth.
Cementing the impression of B2Bs keeping marketing at arm’s length is that few CEOs have any experience themselves in marketing. In the B2B Product sector, almost 63% of CEOs have little to no marketing background. Yikes!
One area that does prove crystal clear though is that an overwhelming majority of marketers – 85.4% in B2B Product and 73.9% in B2B Service – will not use their brands to take a stance in political discourse. This makes sense, given the risk of alienating certain audiences
What the Numbers Mean
Some B2B companies have a habit of overlooking or dismissing the importance of marketing. But fully formed marketing grows and increases your brand presence. It also relieves the burden from your operating team to serve as both lead and sales generator in addition to its role as a support apparatus.
Even if your current numbers cannot support an in-house team, dedicated funds toward agency-guided assistance will broaden your reach and serve to boost your revenues.
Marketing Analytics
Often a critical factor in gaining audience insights, analytics has always been a primary tool of marketers. However, analytics is not at the top of many B2Bs must-have lists – at least not yet.
What the Numbers Say
Over the past seven years, steady spending on marketing analytics was the norm, accounting for anywhere between 5% to 7% of marketing budgets. However, after an incredibly minor drop of .1% from August 2018 to February 2019, the next three years are set to see a significant increase. For B2B Product, it’s expected to go from 6.6% to 11.6% with B2B Services increasing 7.3% to 13.3%.
The overall use of marketing analytics (when combining B2B and B2C) is up across the board, reaching a six-year high in February 2019 with B2C firms actually outpacing their B2B peers!
What the Numbers Mean
It’s clear many B2Bs hold a lukewarm opinion of marketing analytics, but this is largely because B2Bs aren’t investing in the quantitative tools and experiments necessary to show just how important analytics are. Analytics are just as if not more important for B2B than B2C, so if you hope to stand above your competition in an increasingly competitive marketplace, the adoption of marketing analytics will set you apart.
The better you understand shifts in customer attitudes, the quicker you can adjust to those changing dynamics. You’ll gain even deeper insight by investing in behavioral intelligence.
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Final Takeaways
If your B2B company has yet to fully commit to a dynamic approach to marketing, now is the time. As the data outlined above indicate, the future holds plenty of promise for those willing to invest substantially in their marketing programs.
An insightful CMO invests for the future so they strengthen their brands while gaining a competitive edge. If your brand lacks clarity and focus, invest in the development of a new brand strategy to guide your way forward. If you already hold a strong position and aim to stay ahead, solidify your efforts and dedicate your resources wisely – into SEO, mobile and analytics for example.