What do you get when 600 marketing leaders across all industries from North American to the U.K. weigh in on how they spend marketing dollars? A whole lot of evidence suggesting that the future of digital marketing is both bright and a little baffling. Let’s take a look at Gartner’s latest 2018-2019 CMO Survey results and break down key findings to predict what doors they may unlock in the years to come.
7 Digital Marketing Trends
1. We are on the brink of “significant” uncertainty.
Between growing cybersecurity concerns, tightening compliance standards, turbulent foreign relations and the threat of another economic recession, business leaders face more risk today than ever before. These challenges are intensified by the fact that collectively, we are all pioneers of a new Wild West (the digital economy) that is as volatile as it is full of promise.
What this means…
Proceed with caution. Big risk is still met with big reward, but the stakes are growing higher. Moving forward, there is little space for assumptions. Every decision you make must be educated, calculated and backed by data.
Learn More- FACTS YOU WANT TO CONSIDER FOR AFFORDABLE HOME INSURANCE
2. Despite potentially troubling times ahead, digital marketing budgets are growing.
Fifty-seven percent of CEOs and senior business executives plan to increase their overall marketing budgets, with 21 percent of funds dedicated to advertising. More specifically, two-thirds of advertising dollars are going toward online ads versus offline.
What this means…
Digital advertising works. Here’s why: The pressure for marketing to prove ROI hasn’t let up. In fact, it’s only going to get worse. Digital advertising is easy to track. Value is easy to prove. And many activities can be handled in-house, which makes this marketing activity an attractive option for brand awareness and lead generation strategies. However, marketers must not forget history. As ad space becomes saturated, the competition will intensify and could diminish ROI.
3. Marketers and executives see value from opposite ends of the spectrum — and it’s a problem.
Marketing leaders reported that their primary focus is awareness. As such, they still use awareness-based metrics to prove marketing value. On the flip side, business executives care most about ROI and view awareness benchmarks as “vanity metrics” that bear no impact on marketing value.
What this means…
The ages-old divide still prevails. Marketers know the metrics that matter most to business executives, but they still aren’t leading their pitches with the data that CEOs and CFOs want. As long as this divide exists, we can expect budgetary growth to remain small and incremental at best.
Check out this free guide for advice on how to change your tune and better connect with your executive team: How to Secure a Marketing Budget Even When Sales Are Strong.
4. Innovation is a priority for CMOs, but their ambitions far exceed their capabilities
Sixteen percent of CMO budgets are going toward the invention of new processes and activities. Sixty-three percent of CMOs expect this percentage to grow. Their intentions are noble, but their ability to successfully execute marketing innovations is still very low.
What this means…
Marketing leaders understand the importance of finding new, better ways to stand out and make meaningful connections. Likewise, CEOs are going all-in on innovative solutions to create new business opportunities. But true innovation means going beyond what you know is possible. It’s about exploring the impossible and proving that it’s not. Marketers may have finally gotten buy-in for the tools they need to innovate, but they still haven’t achieved the skill-level needed to push boundaries.
5. Martech is the single largest area of investment.
In 2017, we saw a dramatic 15 percent drop in martech (marketing technology) funding that cashed in around 22 percent of marketing budgets. This year, spending shot up to 29 percent, accounting for nearly one-third of total funds.
What this means…
Given that martech is a rapidly expanding industry with a daunting number of solutions, choosing right is a significant challenge for CMOs. The increase in martech spending is largely due to a growing dependency on outside services and IT support. In other words, organizations are prioritizing digital transformation, but the verdict is still out on how investments will positively or negatively affect marketing teams (and budgets) down the road.
6. Marketers are looking at customer experience through a narrow lense.
Eighteen percent of marketing budgets are allocated to customer experience (CX) initiatives. However, Gartner’s study indicated that CMOs might be focusing too much effort on mid-funnel activities and not enough on attracting new customers and retaining them. Furthermore, marketers still aren’t measuring CX metrics to improve their outcomes.
What this means…
Marketers are somewhat oblivious to the quality of the customer experience they are delivering. Without a history of data to confirm or deny their assumptions, they can’t effectively design a pathway for potential unknown customers or existing customers. Starting immediately, marketing leaders need to track CX metrics, such as:
- Net Customer Value Growth (NCVG): The economic value of new customers versus the value of customers lost during a set period of time.
- NCVG = [(volume and value) new customers] – [(volume and value) customers lost]
- Net Promoter Score (NPS): A survey that asks customers to rate how likely they are to recommend your brand to a friend or colleague (on a scale of 1-10).
- Referrals: The amount of business that directly resulted from existing customer referrals.
7. Personalization efforts are on the rise, but the slope is slippery.
A little more than 14% of marketing budgets are currently spent on personalization efforts. This makes perfect sense considering the importance of CX. But, like marketing innovation and martech, Gartner cautions CMOs to tread lightly.
What this means…
The increased spending on personalization is evidence of its challenging nature. Given the low level of innovation capabilities and the growing concerns surrounding trust and privacy, personalization is a fine line that can only be navigated with extensive customer data and the skills and integrations to leverage that data.
A common thread weaves a compelling final prediction…
Globally, organizations across all industries are outpaced by changes in the world’s most influential drivers:
- Technology
- The marketplace
- Consumer behavior