Digital Marketing Comes of Age in Gartner’s CMO Spend Survey 2015-2016

November 6, 2015
Contributor: Chris Pemberton

This year’s survey demonstrates that digital marketing has moved into the mainstream of marketing organizations.

A CMO’s lead up to annual executive budget presentations is never easy and it’s often full of thorny questions that need answering from direct reports and for the CEO:

Am I spending enough to fuel growth?

How much do I devote to innovation?

What’s the right place to invest in marketing tech?

How should marketing participate in digital commerce?

Compounding these challenges, executive leaders have high expectations for the marketing function. “Digital marketing has moved into the mainstream, as 98 percent of marketers affirm that digital techniques are merging into the larger marketing operation,” said Yvonne Genovese, Group Vice President, Gartner for Marketing Leaders in discussing Gartner’s CMO Spend Survey 2015-2016.

“Digital marketing has moved into the mainstream.”

Here are four significant takeaways from the survey to help marketing leaders deliver in 2016:

Bigger budgets and bigger shoes to fill

2015 saw marketing budgets increase 10 percent to 11 percent of revenue, and two-thirds of marketers expect their budgets will grow in 2016. Areas of focus are social marketing, analytics, customer experience and digital commerce. But with this increase comes increased expectations; marketing is expected to drive profitable growth through the acquisition, retention and expansion of the most valuable customer relationships.

That’s a tall order. Now is the time to sync budget priorities with measurable outcomes.  And digital commerce leads the charge in helping marketers show clear revenue impact.

Digital commerce on deck

Two main factors are driving marketers’ participation in digital commerce: The need to point to tangible results from marketing investments and the recognition that it takes more than just a commerce platform to sell online. If you build it, customers won’t necessarily come.

Digital marketing was one of the highest ranked areas of marketing technology investment for 2015 and a full 20 percent of marketers said digital commerce was the highest priority on their list, compared to 10 percent last year. While the total budget allocation across channels and categories is still evenly split, digital commerce represents a pathway for marketers to leverage their core skills in areas that show demonstrable impact on revenue. It’s time to book some revenue for all that hard work across the customer buying journey. While digital commerce was an area of increased focus, only social marketing ranked higher as a focus of investment in 2015.

“While digital commerce was an area of increased focus, only social marketing ranked higher as a focus of investment in 2015.”

Craving social marketing

According to the survey, 65 percent of marketers ranked social marketing as the highest area of investment in 2015. This dovetails with the findings from the Gartner 2015 Multichannel survey that social marketing is one of the most effective channels for marketers along the entire buying journey. Social marketing even shows up high on the innovation agenda in 2015.

Social marketing needs both proactive and reactive marketing focus. Social listening helps marketers understand what people are saying about them and their products and it often reveals opportunities to delight customers or restore a relationship. Results of listening programs can be used to develop more targeted promotional programs or used as input for developing current or future products.

Proactive social marketing is part of content marketing and inbound programs. Getting your prospects and customer engaged with you and your products can be the difference between having loyal customers and developing real advocates.

More innovation please

The number of organizations that set aside a discreet innovation budget jumped from 64 percent to 71 percent between 2014 and 2015.  Of those organizations that have innovation budgets, over 90 percent are either assessing, piloting or actively using technologies such as Internet of Things, real-time social listening tools, marketing analytics and digital marketing hubs. Innovation can be seen as a continuous process of learning through failing and succeeding, learning and scaling.

What to do next:
  1. Guide the increase in marketing budgets and responsibilities toward measurable outcomes to show delivery against expectations.
  2. Look for ways to incorporate commerce into your brand experience.
  3. Review next year’s budget to understand whether your requests align with your needs. Are you asking for the right level of funding in the right areas? How will you show the payoff of your marketing efforts? How can marketing be a P&L and not just a cost center?
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