Dive Brief:
- While marketing budgets remained steady at 11.2% of company revenue for 2018, 63% of CMOs expect their budgets to increase in 2019, according to the findings of Gartner’s new CMO Spend Survey included in a news release.
- Investments in marketing technology accounted for 29% of total marketing budgets in 2018, an increase over 22% in 2017. However, CMOs use an average of 61% of their martech’s capabilities. One of every six marketing dollars is spent on innovation-related initiatives, and 63% of CMOs expect innovation-related budgets to rise in 2019.
- Personalization is accounting for 14% of CMO marketing budgets. Brand awareness is the most important metric that CMOs measure, compared to 7% who said ROI and 1% for customer lifetime value.
Dive Insight:
As CMOs plan to increase their marketing budgets in the new year, the Gartner survey reveals that CMOs are also becoming more confident in their martech investments and ability to offer personalization, as they strive to become consumer-centered and improve customer experience. However, as the survey suggests, CMOs’ enthusiasm for innovation may be outpacing their capabilities.
CMOs are facing increased pressure to demonstrate ROI on marketing spend, and many are still struggling to prove the value of their marketing. CMOs are looking to martech to gain a deeper knowledge of the customer journey to deliver more relevant, personalized messaging that adds value. As tech enables automation of some data crunching, this may be helping marketers buoy their personalization efforts. Global marketing automation spend is expected to reach $25.1 billion by 2023 from $11.4 billion, according to Forrester research.
Marketers also need to focus on building trust with consumers, who are not always trusting of how brands collect, house and use their personal data. Several high-profile privacy breaches, like Facebook’s Cambridge Analytica scandal, have had a big impact on consumer perception. Nine out of 10 Americans worry about online privacy and data, specifically identity theft and credit card fraud, and 71% worry about how brands handle their personal data, according to an ExpressVPN survey. In 2019, Forrester predicts that savvy CMOs will be more proactive and champion customer data privacy and use it to differentiate their brands.
Improving customer experience through personalization is another area where marketers are focusing their budgets, which is essential for driving building brand loyalty. Consumers are beginning to demand more personalized brand experiences, and marketers aren’t always delivering. According to a recent Forrester report, many U.S. brands remain “mediocre” when it comes to customer experience (CX), with banks and luxury auto brands generally offering the best CX and the federal government and internet service providers offering the worst.
