As CMOs earn opportunities with key stakeholders, they face increasing pressure to signify the value of their marketing efforts, with 59% of marketing leaders reporting increased pressure from CEOs and 45% reporting increased pressure from CFOs
New data from The CMO Survey show firms are tapping their top marketers to lead the digital transformation of their brands.
Marketing leaders report that they are in step with other members of the C-suite when briefing board members and shareholders. With increased visibility, they also face rising pressure to demonstrate the long-term value of marketing as an investment for their brands, according to the semi-annual survey, which is sponsored by Duke University’s Fuqua School of Business, Deloitte LLP and the American Marketing Association.
Senior marketing leaders – as opposed to leaders from other business functions – say they are driving about three-fourths (73%) of their firms’ digital transformation efforts. Digital marketing has now superseded brand strategy as their primary responsibility, with spending growing about 16% over the past year to comprise 58% of marketing budgets, the survey found.
Demonstrating marketing’s value
As CMOs earn opportunities with key stakeholders, they face increasing pressure to signify the value of their marketing efforts, with 59% of marketing leaders reporting increased pressure from CEOs and 45% reporting increased pressure from CFOs, the survey found.
“The survey shows marketing leaders are being asked to take on a larger share of responsibilities across the company,” said Fuqua marketing professor Christine Moorman, founder and director of The CMO Survey, which included the responses of 282 chief marketing officers and other leaders at for-profit firms in the U.S. “This includes working with other executives to prepare for board meetings and earnings calls more than half the time, which is a higher level of involvement than expected based on views commonly shared in the business press.”
The majority of marketers say they are able to use quantitative tools to show the short-term impact of marketing spending, whereas demonstrating marketing’s long-term impact relies more on qualitative assessment.
“We see that increasingly, marketing leaders have a seat at the table when discussing strategy and growth opportunities during the pandemic,” Moorman said.
The survey suggested that when making the case for marketing spending, marketers are more effective when they align their strategies with business priorities, set return expectations and explain their hypotheses about impact, Moorman said.
“At the same time, they work to temper non-marketers’ focus on short-term returns and help them view marketing not as a cost, but as a long-term investment,” she said.
A new focus on product quality
In the coming year, 32% of firms say customers
’ top priority will be superior product quality, followed by trusting relationships (18% of companies) and excellent service (13% of companies). Comparing these priorities to those reported pre-pandemic in February 2020, the data show product quality increased in importance by almost 43%.
Firms slow to institutionalize diversity in marketing
Marketing spending on efforts related to diversity, equity and inclusion (DE&I) grew almost 11% over the past year, compared to about 9% growth in February 2021.
“Firms report that they have continued to improve several DE&I aspects of their marketing activities, including changes to training, segmentation, the design of their products and services, and marketing partnerships,” Moorman said. “Large companies and those that earn more than 10% of their revenues from internet sales appear to be changing their strategies most to reach diverse customers. On the other hand, almost a quarter of companies say they have not changed their marketing strategies at all, and few marketers appear to have formalized DE&I as part of their decision-making processes.”
Marketing leaders report that changes to DE&I in marketing tend to be challenged by marketers’ inability to envision the nature of such opportunities and the difficulty of assessing the impact of DE&I-related actions in companies, Moorman said.
“This is an area where marketers can use their insights and metrics to add value to their companies’ DE&I efforts,” she said. “Asking how such actions and investments affect customers, employees, shareholders and partners is a good first step.”
A detailed analysis, including longitudinal trends and insights across industries, is available at cmosurvey.org
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[This article has been reproduced with permission from Duke University's Fuqua School of Business. This piece originally appeared on Duke Fuqua Insights]