Despite a lack of confidence in the overall US economy, CMOs are planning to increase spending on all forms of marketing over the next 12 months, particularly the share of budget allocated to social media marketing, according to The CMO Survey.
In addition, surveyed CMOs now report their companies are planning to increase spending on marketing hires 7.2% on average over the next 12 months.
"These results show that while executives feel the fear of all the doomsayers operating in financial markets, these same executives are reporting positive performance gains and are spending despite the negative news," said Christine Moorman, T Austin Finch senior professor of Business Administration at Duke's Fuqua School of Business and the director of The CMO Survey.
"It is important to note that the company performance indicators collected in the survey show companies are holding on to their profit, revenue, and ROI gains witnessed over the last six months."
Below, additional findings from the August 2011 CMO Survey, a nationwide poll of senior marketing executives conducted biannually by The American Marketing Association and Duke University's Fuqua School of Business.
Social Media Spending
Among surveyed CMOs, social media spending is expected to account for 10.1% of marketing budgets over the next 12 months, up from 7.1% in August 2011.
Moreover, in the next five years, social spending is projected to climb to 17.5% of total marketing budgets.
B2C brands that sell products and B2B brands selling services are expected to invest the biggest share of their budgets to social media over the next five years:
- B2C products companies are expected to more the double their investments in social spending, from 10.5% in August 2011, to 24% in the next five years.
- B2B services companies are increasing spending on social media to 18.3% in the next five years, from 8.6% in August 2011.
Integration of Social Media Into the Strategy
Marketers still struggle to ingrate social media into their overall approach.
On a scale of 1-7, with one being "not integrated at all" and seven being "very integrated," nearly one-quarter of CMOs (22.3%) selected "1" to describe how well their company integrates social media with the firm's overall strategy, whereas 9.1 rated their efforts a "7", or very integrated. The average was 3.4.
Results were slightly better for integration within the marketing strategy: 16.9% of CMOs selected "1" for this question, while 12.8% selected "7" for the marketing strategy (the average was 4.0).
Overall marketing budgets are expected to climb 9.1% on average over the next 12 months, up from the 6.7% reported in February 2011:
Various marketing categories are expected to grow more robustly over the next 12 months, including:
- Spending on new product and new service introductions is expected to climb 10.4% and 6.6%, respectively.
- Internet marketing spending is expected to increase 11.2%, compared with a 1.3% increase earmarked for traditional media.
CMOs plan to allocate fewer dollars to customer relationship management efforts (6.5%) and brand building (5.7%) over the next 12 months.
On average, companies are planning a 7.2% increase in marketing hires over the next 12 months.
The largest percentage changes in marketing hires are expected among B2B products companies (11.6% plan to hire in the next 12 months) and smaller companies with revenues of less than $25 million (14.8% plan to hire over the same period).
Interestingly, the outsourcing of marketing is expected to double: 9.3% of CMOs say they will increase outsourcing of marketing roles in the next 12 months, compared with 4.5% reported in February 2011.
Optimism at a Two-Year Low
Optimism among CMOs for the overall US economy has reached its lowest point in two years.
Asked how optimistic they are about the overall US economy on of 1-100 scale with 0 being the least optimistic and 100 the most optimistic, the average among CMOs was 52.2. By comparison, in February 2009 the average was 47.6.
About the data: The August 2011 CMO Survey is a nationwide poll of chief marketing officers conducted twice each year by Duke University's Fuqua School of Business in conjunction with the American Marketing Association. The survey collected responses from 280 senior marketing executives, August 1-23, 2011.