Covid-19 has accelerated the adoption of digital tools among companies and customers. Eighty-five percent of marketers report an increased openness among customers to their digital offerings and 84% believe customers place more value on digital experiences than before the pandemic, according to a Special Covid-19 Edition of The CMO Survey from Duke University surveying marketing leaders at for-profit U.S. companies. CMOs are adjusting their offerings and pivoting their businesses to meet these new expectations and opportunities, with 60.8% indicating they have shifted resources to building customer-facing digital interfaces and 56.2% transforming their go-to-market business models. CMOs are also using their employees to get active online (68.6%) and to improve digital interfaces (61.8%).
Reflecting this shift, 62.3% of marketers report that marketing has become more important since Covid-19 hit. Pointing to marketing’s priority during this period, marketing budgets as a percent of (overall shrinking) firm budgets (12.6%) and firm revenues (11.4%) reach all-time CMO Survey highs. However, 9% of marketing jobs have been lost, leaving marketing departments to do more with fewer people. This is expected to continue into the next year with planned marketing hiring to drop to the lowest point in Survey history—going negative for the first time ever (-3.5%).
As marketers struggle with layoffs and mounting expectations to do more with less, social media has been their saving grace, with 84.2% of marketers saying they use social media for brand building and 54.3% saying they use it for customer retention. Consistent with this, marketers have poured dollars into social media budgets, which have increased 74% since just February, rising from 13.3% of marketing budgets to 23.2%. Marketers believe this strategy has paid off with the contributions of social media to company performance rising for the first time in CMO Survey history—up 24% since February. This is an important finding because social media contributions have remained flat and at average levels since 2016 despite rising investments. Mobile investments are also up, but contributions to company performance are flat as stuck-at-home consumers turn to easy-to-use non-mobile options for search and purchase.
Brand building and customer retention appear to have stopped some of the Covid-19-related blood loss. Despite this, marketers report major losses across sales revenue, profits, and customer acquisition during the pandemic. Biggest reductions are to sales revenue, which has dropped 17.8% on average during the pandemic, with 16.9% of marketers reporting losing over 50% of their revenue. Considering winners and losers, 64% of marketers report sales losses compared to 30.3% that report gains and 5.2% reporting no change. Marketers expect these KPIs to turn positive in the next year with revenues to increase 4.2%. These expectations are driven by the view that consumers’ current lower likelihood to purchase (67%) and unwillingness to pay full price (43%) will return to pre-pandemic levels within 6-12 months. Importantly, consumers’ increased value placed on digital experiences is never expected to revert to pre-pandemic levels, pointing to a turning point for many companies. It is perhaps for these reasons that more than half of marketers expect their digital investments and employees strategies to be “very effective” over the long run.
When the pandemic slows, marketing will be left with an altered—and arguably more important—role. This role appears to be one that operates with fewer resources—24% of marketers believe marketing job losses will never return and budgets that were expected to increase 7.6% in February are now expected to grow only 1.6%—but also one that puts marketers in the driver’s seat for reaching and connecting with online customers and designing experiences and go-to-market business models (56% of marketers already are doing so). Despite these big asks, companies are investing less in training (down 6.4% since February) and plan to shrink workforces even more (marketing hires over the next 12 months is -3.4%). The marketers of tomorrow will focus in digital essentials, convert social investments into dollars, and pivot to respond to new priorities and opportunities that emerge over the next uncertain year—a skill ranked as #1 among marketers for new talent.
Detailed analysis of these and other results are available here. I hope these findings from our Special Covid-19 Edition of The CMO Survey are useful as you navigate these next few months and beyond. I will be taking a deeper dive into these findings during a webinar on June 25th at 1PM Eastern. Sponsored by the Marketing Science Institute and the American Marketing Association. You can register by following this link.