Changes to customer experience, analytics, the expanding influence of Amazon and more mean marketers need to effectively balance competing demands.
Equilibrium is the name of the marketing game in 2019. Consumers seek greater convenience and constant connection with everything and everybody and, as a result, embrace voice interfaces and bite-sized videos. Yet consumers and legislators demand more privacy and better data stewardship due to companies’ overreach and missteps.
This moving target of consumer trends means marketers must re-evaluate their communication strategies in light of changes in regulations, behaviors, organizations and automation.
“By 2022, profitability will replace customer experience as the CMO’s No. 1 strategic priority.”
The call to balance competing demands cuts across marketing disciplines and budget categories and will require marketing leaders to do three things in 2019:
- Build a long-term quantifiable customer experience capability while delivering a visible, shorter-term business impact.
- Deliver more personalized customer experiences that rely on increased automation.
- Reduce customer churn by giving users more control, not less, over the data brands store about them and how they use that data.
“Recovering a modicum of equilibrium across consumer behaviors and technology innovation will require organizational alacrity, a laser focus on customer needs and a balanced embrace of automation,” says Charles Golvin, Senior Director Analyst, Gartner for Marketers.
CMO Spend Survey 2018-2019
Demonstrate the business value of marketing efforts amid uncertain times
Customer experience risks burning less bright
By 2022, profitability will replace customer experience as the CMO’s No. 1 strategic priority, reducing investment in marketing-funded CX programs by at least 25%.
Growth is the CEO’s No. 1 priority, and many CEOs look to the CMO to deliver that growth — yet there is a disconnect between this mandate and the metrics and behaviors used to track and deliver it.
“Many CMOs regard CX as an ephemeral concept and don’t prioritize metrics that demonstrate the value it delivers.”
CMO investment in customer experience (CX) remains strong. Over the past two years, CMOs consistently ranked and invested in CX as a capability needed to achieve their marketing goals. Nonetheless, many CMOs regard CX as an ephemeral concept and don’t prioritize metrics that demonstrate the value it delivers to the enterprise. When asked to state the top three metrics needed to inform marketing strategy, less than 6% of CMOs mentioned key CX metrics such as Net Promoter Score (NPS) and lifetime value (LTV).
CMOs must not only align marketing programs with business success, they must put in place the accurate measurements to evaluate CX’s role in that success. Failure to capture business-critical metrics such as cost of acquisition, retention and churn rates means CEOs will withdraw investments from poorly quantified CX programs.
Opt-in to value creation by going beyond opt-out
In 2023, brands that put in place user-level control of marketing data will reduce customer churn by 40% and increase lifetime value by 25%.
Regulatory changes and consumer privacy concerns are reshaping how companies collect, use and approach data-driven marketing. Data collection regulations in the EU (GDPR), Brazil (LGPD), India, Japan and California force businesses to be transparent about the data they gather and enable customers to manage and edit that data.
“Firms that use privacy as a brand attribute receive customer satisfaction and loyalty ratings that are significantly higher.”
At the same time, companies that violate privacy promises or expose customer data are at risk of customer defections and decreased engagement. Firms that use privacy as a brand attribute receive customer satisfaction and loyalty ratings that are significantly higher than their competitors.
Showing customers the data you collect affords you the opportunity to clearly explain how this data benefits them — from understanding their personal preferences and offering greater convenience to increasing awareness of complementary products and services. All contribute to greater customer loyalty and create an opportunity to increase lifetime value.
Content creation gets a boost from AI
By 2022, content creators will produce more than 30% of their digital content with the aid of AI content-generation techniques, increasing productivity and advertising effectiveness, but also disrupting the creative process.
One of the biggest barriers to the marketer’s dream of creating effective personalization at scale is the expense and time required to create content. This challenge is the target of some of the most impactful breakthroughs in AI, specifically generative content creation — using AI techniques to synthesize realistic video, audio, images and text.
Generative algorithms can produce thousands of variants, test and evaluate them against specific target groups or individuals, and optimize campaign content in hours or days. While this will certainly change the role humans play in the creative process, it is not a forecast of the wholesale replacement of talent with technology. Human oversight and judgment will still be required for the foreseeable future, but many roles will shift and new skills will be required.
Read more: How Artificial Intelligence Will Drive Transformative Change in Marketing
Analytics teams bust after booming
By 2023, 60% of CMOs will slash the size of their marketing analytics departments by 50% because of a failure to realize promised improvements.
Marketing analytics (next to CX) is a top investment area for many CMOs. According to the 2018-2019 Gartner CMO Spend Survey, 62% of CMOs believe they’ll increase their budget for marketing and customer analytics in 2019. Teams have ballooned over the past three years to absorb this investment increase. Between 2015 and 2018, the head count for an average marketing analytics team grew from 22 to 45 full-time employees.
“Data scientists perform basic activities, such as data visualization and data preparation, in more than 45% of marketing organizations.”
Despite growing C-suite support, marketing analytics teams haven’t made much progress in advancing their overall maturity. According to the Gartner 2018 Marketing Data and Analytics Survey, 66% of marketers ranked themselves as an “intermediate” Level 3 or below on the Gartner Data-Driven Maturity Model.
At the same time, expensive, talented analytics resources are misaligned. Data scientists perform basic activities, such as data visualization and data preparation, in more than 45% of marketing organizations. The majority of analytics teams say integrating and formatting messy data — and not high-value activities such as using data and insight to demonstrate business value — is consuming much of their time.
Read more: Build Stronger Marketing Analytics With Cross-Training
Automation optimizes multichannel marketing
By 2023, autonomous marketing systems will issue 55% of multichannel marketing messages based on marketer criteria and real-time consumer behavior, resulting in a 25% increase in response rates.
More automated and more mature multichannel marketing is on the rise. According to the 2017 Gartner Multichannel Marketing Effectiveness Survey, 38% of marketers in 2015 said their marketing mostly involved event-triggers. In 2017 that number rose to 43% and is expected to reach 59% in 2019.
“Algorithms will replace rule-based channel selection based on an individual’s propensity to respond."
To fuel this rise in automation, Gartner predicts that by 2020, more than 50% of deployed multichannel marketing hubs will include a productized AI solution. In pilot tests, the campaigns that employ predictive segmentation and content selection will outperform those crafted by manual selection by 100%.
Algorithms will replace rule-based channel selection based on an individual’s propensity to respond. When consumers don’t take the desired action or don’t respond, algorithms will re-engage select audience members with additional messages or identify complementary channels such as display advertising or SMS. If an email fails to drive a desired response, there is no longer a need to manually schedule one — an automated solution will execute the follow-up.
Short video ads go mainstream
By 2023, consumers will watch 20% fewer minutes of video advertising per day than they do today. Brands will adapt by embracing short-form video ads.
After initial resistance, traditional ad sellers will come to embrace the shift to shorter ad-unit sizes. These ad units are a response to shifting attention patterns and the growth of ad-free subscription services.
Early entrants such as Google’s YouTube and new entrants like Roku offer innovative ad products. In September 2017, YouTube noted that one in three of its large customers used six-second “bumper” ads to quickly deliver messages to viewers — a 70% increase in adoption over the first half of that year. New, shorter ad formats are already in use in National Football League (NFL) games during the short breaks when referees review a contested call. They are more akin to a pop-up or interstitial ad unit familiar to an online media buyer more than a traditional 15-second commercial.