The 32nd edition of The CMO Survey examines reoccurring questions related to marketing spending and performance, marketing leadership, and marketing jobs. In addition, managing marketing technology, generative AI, growth, and sustainability are special topics covered in this edition.
Here are top takeaways, based on a sample of 292 marketing leaders at for-profit U.S. companies, 94% of whom hold positions at VP-level or higher.
Managing Marketing Technology
Over three-fourths (75.3%) of companies surveyed are using marketing technologies (Martech), with high-revenue organizations leading. Companies spend 19.9% of marketing budgets on Martech. This is expected to grow to 23.5% in one year and to 30.9% in five years.
Approximately 62% of marketing activities use Martech tools, up from 58.4% just one year ago. Yet, only 56.4% of all Martech tools purchased are being used.
The emphasis in managing Martech is reported to be on “optimizing existing tools,” “identifying tools for a stronger customer experience,” and “identifying what can be linked together to form powerful capabilities,” while “hiring or retaining talent” and “creating a shared cross-enterprise strategy” are given less attention.
Martech impact on company performance is evaluated at 4.7 on a 7-point scale where 1=not at all and 7=a great deal. Consistent with this modest performance, marketing leaders report that actual Martech payoffs are 34% lower than their hopes for these payoffs. Marketing leaders report their weakest performance is on “hiring staff to manage Martech” and on “integrating Martech across other data systems in the company.”
Managing Generative AI
AI is having an overall positive impact on marketing organizations. Marketing leaders report that sales productivity has improved by an average of 5.1% due to AI, customer satisfaction has improved by an average of 6.1%, and marketing overhead costs have decreased by an average of 7.0%.
Companies are using generative AI in only 7% of marketing activities, pointing to a massive opportunity. In fact, while abuzz in the media, only 10% of companies are actively using Large Language Model, 39% still have not used such tools, with the remaining 51% evaluating or piloting the use of such tools.
Challenges abound for the marketing leaders who are integrating generative AI into their marketing organizations, with the most vexing being “minimizing bias” and “investing in necessary hardware.” However, even core strategy challenges such as ensuring generative AI produces “a good fit for your brand” and “a good fit for your target markets” receive only average ratings for how well AI is being managed.
Managing Growth
Marketing leaders report their largest revenue markets are growing at a rate of 12.1% per year on average. Companies operating in service markets are growing at nearly twice the rate (at 16.7%) compared to product markets at 9.4%. Focusing on their own companies, average revenues are growing faster than markets at 16.4% with B2B companies growing faster (at 19.1%) than B2C companies (at 11.5%).
In explaining why their companies are growing faster than markets, marketing leaders cite strategy differentiation, go-to-market capabilities, and strategy execution as the top reasons. For those companies growing slower than markets, marketing leaders cite underfunded strategies, not having the right go-to-market capabilities, and undifferentiated strategies as the top reasons.
Managing Sustainability
Spending on sustainability or climate-related issues increased to 1.9% of marketing budgets from 1.2% a year ago. These budgets are predicted to increase to 2.8% in one year and 4.5% in five years. At the same time, nearly one-third of companies are not taking any marketing actions to address climate change risks.
Of those companies taking actions, the most common are “changing products and/or services” with 52.1% of companies reporting this change, followed by “changing partners” (42.9%), “changing marketing promotions” (40.3%), and changing distribution (33.6%). Lagging are “changing market selection” (18.5%) and “changing brand” (10.1%). Consistent with these levels, 25.6% of companies are adopting climate-related metrics, up from 18.7% two years ago.
Marketing Spending
Marketing budget as a percentage of company budget is 10.2%, continuing its downward trend from a high of 13.8% in 2022 but not quite at its pandemic low of 9.8% in 2021. In contrast, marketing budget as a percent of company revenues increased to 10.1%, up from 9.2 % in Fall 2023. Overall marketing spending is expected to grow by 4.7% (from actual growth of 2.5% in the last year), while digital marketing spending growth is expected to cool to 8.0% (from 8.9% actual growth in the last year).
Growth in spending on Customer Relationship Management, Brand Building, and Customer Experience are predicted to slow in the next 12 months. While the overall level of investments remain positive, the drops in CRM investments from 6.2% to 3.9% (37% lower) and Branding Building from 5.5% to 3.9% (41% lower) are dramatic.
Marketers anticipate social media spending will increase from 11% to 12.2% in the next 12 months and back up to 16.3% in five years—a spending level achieved in 2023.
When asked how they would spend an extra $1M of marketing budget, marketing leaders report they would most likely use it to hire and develop talent (16.5%), followed by digital advertising and marketing (10.3%), brand building and awareness (7.9%), and AI or automation (7%).
Macroeconomic Forecasts
Optimism about the U.S. economy remains consistent at 67.0 on a 100-point scale (with 0 being the least optimistic and 100 the most optimistic), following a score of 66.7 in Fall 2023. After drops in Fall 2022 and Spring 202 due to the dual threats of recession and inflation, this level continues to climb back in line with the post-pandemic high of 69.6 in August of 2021.
Even with a maintained sense of optimism, inflationary pressures are still, on average, leading to a decrease in marketing spending levels. The percentage of marketing leaders reporting this decrease (45%) is, however, lower than one year ago when 52% reported this decrease.
The 2024 CMO Survey Award for Marketing Excellence
The 2024 CMO Survey Award for Marketing Excellence is selected by fellow marketers. It is given each Spring to one company that is judged to set the standard for excellence in marketing across all industries and the companies viewed as setting the standard in their respective industries. Apple Inc. is the overall winner for the sixteenth straight year. Industry winners include Amazon, Nike, the Proctor & Gamble Company, Nike, State Farm Insurance, and Microsoft.
Three different reports, available at https://cmosurvey.org/ summarize these and other 32nd edition results.