The good new for marketers is that their budgets are either holding up or being increased in spite of a restrained economy. The savvy ones are investing in digital media. The bad news is that too many of them still do not get it when it comes to prioritizing on operational and data management systems to meet corporate goals and in measuring and getting results from digital media. Too few of them understand the need to work closely with top executives.

 

These observations have been drawn from the Chief Marketing Officer (CMO) Council in its annual Marketing Outlook study. An audit of over 650 marketers worldwide, sponsored by Deloitte (News - Alert) Consulting LLC, the Jigsaw business community, and Ad-ology found:

 

*          Half of the marketers report they are either holding firm on budgets or anticipating increases. Nearly one third plan at least a small budget increase, with 8.2 percent planning a bump of more than 10 percent.

 

*          However, almost half say they will decrease spending at least somewhat, with 18.8 percent anticipating cuts of more than 15 percent.

 

*          Customer anxiety and cutbacks are the number one force impacting budget allocations in 2009, followed by slower selling cycles and reduced consumer spending.  Only 14.9 percent point to financial market disarray as a determining factor.

 

*          Grow or retain market share is the leading executive mandate for marketers, which 47.6 percent, followed by lowering costs and improving go-to-market efficiencies (43.5 percent) and improving customer insight and retention (32.5 percent).

*          While there are some signs of retrenchment, marketers are committed to their personnel, which represent 42 percent of budgets, and plan to invest in retraining employees for the digital age, rather than replacing them with new talent. Their efforts to harvest greater efficiency from current operations emphasize sharpening internal processes and alignments within their organization instead of instituting broad restructuring plans or cutting ties with current agency partners.

 

 “Marketers are not running scared from the economy,” says Donovan Neale-May, the CMO Council’s executive director. “Broad concerns about the economic, stock market and credit downturn are not the leading forces shaping this year’s budget planning process.

 

“Instead marketers are paying close attention to their customers and responding to changes in the selling cycle. The emphasis is on building internal efficiencies and strategic cost cutting, increasing customer insight, and strengthening integration with sales to drive revenue and market share. There’s good news for agencies, too as marketers are not viewing these relationships as a key to cost reductions.”

According to the CMO Council, senior management is mandating that marketing contribute to the bottom line by retaining and growing market share and lowering costs through greater go-to-market efficiencies. In turn marketers are confident they can deliver by focusing on execution via clearly defined goals, improving operational controls, and analytics to help guide resource allocation.  While hunkering down, marketers are also gaining increased confidence in the effectiveness of digital marketing investments as digital begins to comprise the majority of demand generation spend.

 

The survey revealed that budgets aimed at online and Web 2.0 initiatives almost 50 percent higher than that earmarked for traditional media. Also, retraining and developing existing staff is the leading strategy for acquiring or sharpening expertise in digital marketing competencies. 62.9 percent elected training compared with 28.6 focusing on recruiting new talent while 17.1 percent outsourced to obtain these skills.

“Digital marketing has moved well beyond search as social media and experiential marketing continue to grow and evolve,” says Dave Couture, a principal with Deloitte Consulting LLP. “Savvy marketers are applying collaboration marketing methods as a central component of their efforts to maximize customer lifetime value in the digital economy.”

Yet despite marketers’ general confidence, their investment plans in simple, task-specific marketing software applications, and lack of spend in more comprehensive operational and data management systems, suggest a critical disconnect in how they hope to achieve executive goals, reveals the CMO report.  Too many are not converting digital media leads to sales or measuring results well.

 

Also, disconcerting is a limited interest in forging deeper relationships with the IT function. The CMO Council’s Neale-May says this year’s study indicates senior marketers may be failing to build line of business and executive suite relationships required to build their status and influence in their organizations.

 

The study results showed:

 

•       The top two target areas of investment for 2009 are e-mail marketing (44.9 percent) and online surveys and research (33.2 percent). In contrast only 10.1 percent are investing in master data, 12.8 percent in marketing operational systems, and 9.3 percent in marketing
resource or process management solutions.

 

*          The majority of marketers are sticking to old online measures like page views and registrations (64.6 percent), site traffic and volume (58.4 percent) and search prominence (45.2). However, a growing number are measured customer engagements including translating online traction to the acquisition of new accounts and customers, tracking content consumption transactions or subscriptions and measuring word-of-mouth advocacy.

*          Just 9.3 percent of marketers rate their e-metrics and measurement capabilities as excellent. 35.6 percent of marketers are questioning spend, struggling to quantify value or are simply not doing a good job of converting visitors to leads or to customers.

*          Only 8.2 percent respondents plan to build new linkages with line of business executives and just 7.4 percent are seeking a board member position, suggesting limited aspirations to rise within the corporate hierarchy. Only 9 percent say they are looking to work more closely with the CIO and IT department

 

“Senior marketers clearly need to elevate their game when it comes to integrating IT and data management into their operations and insights,” urges Neale-May.