Image courtesy http://www.ama.org
Dr Christine Moorman of Duke University’s Fuqua School of Business has just released the latest rendition of the CMO Survey, which is put out in part by Duke University’s Fuqua School of Business. While the insights revealed by the survey are not necessarily revelatory, there is a minor element of surprise contained within that bodes well for the future of third-party marketing.
First off, digital marketing is expected to continue to grow at a healthy pace. This will amaze virtually no one, but it does inidicate a continued positive development — present pandemic notwithstanding, of course. In fact, I have to preface these comments with a bit of a proviso, recognizing that the world looks a lot different than it did during the collection of this survey (Jan-Feb 2020), and it may be some time before we return to normalcy.
Let me discuss a few slides in particular:
Slide 26 – Growth in digital marketing greatly outpaces growth in traditional marketing, with consistent, strong growth in digital marketing and relatively steady traditional advertising spending, +13% vs -0.4%
Slide 28 – Spending on customer experience expected to continue to grow 35% in next three years
These two findings indicate to me that advertising’s position continues to erode, albeit slowly, in favor of more immersive experiences. We see further evidence of this in burgeoing spending across almost all industries, and even in an uptick in spending in this area by government agencies.
Another point of curiosity is that performance measurement – a topic I’ll delve into in more detail in a future post – is largely being gauged using traditional accounting metrics and, eschewing the use of forward-looking metrics like customer lifetime value (CLV) or net-promoter score (NPS).
Slide 34 – Traditional accounting metrics (share, sales, profits win out over forward-looking metrics (NPS, CLV)
One could argue that this is merely a greater degree of financial discipline finally being imposed on marketing – but I would take issue with that, at least in part. Successful marketing has always been measured by its impact on how it moves the business forward, and such measures are ultimately financial ones. It’s very difficult to look past how marketing affects today’s hard and fast impact on revenue and profitability in favor of potential down-the-line effects. This is not to say that forward-looking metrics don’t matter; they do, just not nearly to the same degree, and this is what the CMO Survey reflects. Discplined measurement is the bottom line.
You should bear in mind that this survey was completed in February 2020, prior to the outbreak of COVID-19 and the subsequent virtual lockdown of much of the world’s economy. It is entirely possible that the survey’s insights will change markedly once we’re out of the woods (to say nothing of the interim effects of Coronavirus). In fact, the entire world’s economy may change in significant ways that we can only imagine at the moment. Thus it’s worth considering that this survey explores the near future of marketing strategy under normal circumstances – something I wonder if we’ll ever experience again. Watch this space, as they say.