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Top Ten Results from the February 2020 CMO Survey

CMO Survey Results

Here are my top ten results from the February 2020 CMO Survey. These results are based on a sample of 265 top marketers at for-profit U.S. companies, 98% of whom hold the position of VP-level or higher.

#1 – Growth Strategies

  • Spending on existing markets and offerings continues to dominate growth spending (at 54% of investment), while diversification (spending on new markets and new offerings) continues to be lowest at 10.4%.
  • Marketers currently spend about 2.1% of their budgets on China—up from 1.7% three years ago. Marketers anticipate these budgets to increase 100%, to 4.2%, in three years.
  • Internet sales as a percent of revenues tick up, rising to the highest level in a decade at 13.5%.
  • Companies continue to prioritize organic growth with 72% of investments focused on leveraging internal firm sources of growth compared to growth via partnerships (at 11.4%), acquisitions (at 11.3%), or licensing (at 5.1%). Having the right talent and stakeholder alignment are viewed as most important to organic growth—over right operating model, technology, and data.

#2 – Marketing Spending

  • Marketing budget growth dips to 7.6% compared to August 2019’s 8-year high of 8.7%. This drop may reflect last year’s actual marketing budget, which was only 5.8%.
  • Marketing budget as a percentage of firm budget remains steady at 11.3%, while marketing budget as a percent of firm revenues rises to 8.6%–a 9% increase since 2018.
  • Growth in digital marketing spending remains very robust with a 13% increase expected in the next year—a pace that has been maintained over the last decade. Traditional media advertising, on the other hand, continues to reflect negative growth at -.4%—slightly smaller than the decade average of -1.5%.
  • Spending on the customer experience has increased 71% over the last three years from 8.9% of marketing budgets to 15.2% at present. Marketers expect to increase this spend to 20.6% of their marketing budgets in the next three years.

#3 – Marketing Leadership

  • 81.5% of marketing leaders are unlikely to use their brands to take a stance on politically-charged issues. This percentage is up from the 73.5% who reported an unwillingness to do so in the August 2019 Survey. For those marketers willing to take a stance, the most popular action is to allow employees to speak out on political issues followed by making changes to products and services.
  • 73% of marketing leaders indicate their companies would be most likely to change their products or services to reduce the negative impact of marketing-related activities on the ecological environment.

#4 – Social Media

  • Spending on social media grows to 13% of marketing budgets, reaching the second-highest point in Survey history, and it is expected to rise to 21.5% in the next five years.
  • Outside agencies perform nearly a quarter of all social media activities—the highest level reported since the question was first asked in 2014. Consistent with this trend, marketers report a drop in the number of people employed in house to perform social media activities from 4.1 persons in February 2014 to 3.1 at present.
  • Social media continues to be rated as contributing only moderate value to company performance (3.4 on a seven-point scale where 7=very highly and 1=not at all)—a figure that has been flat since 2016. One explanation may lie in an increased ability to demonstrate social media impact on company performance, with 30% of marketers now reporting the ability to prove the impact quantitatively—up from 18% in 2017.

#5 – Mobile Marketing

  • The percent of marketing budget spent on mobile continues its upward trend and is expected to continue to rise—growing 73% over the next five years. Healthcare companies expect to double their share of spending on mobile in the next five years.
  • Marketer cite social ads and user experience as the highest categories of mobile spend and report that difficulty tracking the customer across the mobile journey is the factor most limiting their success this important area of marketing strategy.

#6 – Marketer Optimism

  • Optimism among marketers climbs again after hitting its lowest point of the last eight years in the February 2019 Survey. Fueling these gains in optimism are the “less optimistic” marketers who drop almost in half (from 56.2% to 30%) from last year.
  • How do marketers think customer needs are shifting? Marketers anticipate that more customers will emphasize trusting relationships (40.2% increase) while pressures for low price continue to drop (by 21.3%) since August 2019.

#7 – Firm Performance

  • Marketing leaders report that growth metrics are the most important KPI for evaluating marketing performance relative to ROI.
  • Marketing leaders report that their companies use traditional accounting metrics (e.g., sales, profits) significantly more than forward-looking metrics (e.g., customer lifetime value) to measure marketing performance.

#8 – Marketing Organization

  • Marketing capabilities continues to be ranked as the highest quality knowledge asset, with customer insights and competitive intelligence a close second and third.
  • Companies continue to approach the development of new marketing capabilities by building them on their own—57.9% of firms report they build new marketing capabilities by training current or hiring new employees with needed skills. Both Consumer Packaged Goods and Tech firms show the strongest willingness to use an acquisition strategy for developing new marketing capabilities.

#9 – Marketing Jobs

  • In the last year, planned marketing hiring dropped to 5.8%—near the historical average for The CMO Survey over the last decade (~5.6% increase). Four industries show almost double the hiring growth compared to other industries: Healthcare, Technology, Communications, and Retail.

#10 – The CMO Survey Award for Marketing Excellence

  • Apple Inc. was voted the top marketing company across industries—a feat it has achieved for the last 13 years. When asked to “select the company in your industry that sets the standard for excellence in marketing,” marketing leaders selected Amazon and Salesforce in the Technology sector, Coca Cola Inc., Nike, and Proctor & Gamble in Consumer Goods, and Disney in Consumer Services.

I will be writing more about these topics over the next few months. Detailed results can be found on The CMO Survey website, while the opportunity to sign up for future surveys can be found here.

The CMO Survey is generously sponsored by Deloitte LLP, The Fuqua School of Business at Duke University, and the Amercian Marketing Association.