Chief marketing officers (CMOs) see innovation as the path to growth, with marketing innovation now making up more than 20% of overall marketing budgets, according to Gartner, Inc. The annual Gartner CMO Spend Survey 2021 showed that 72% of CMOs have increased investments in marketing innovation over the last year.
Gartner surveyed 400 CMO and marketing leaders in North America, the UK, France and Germany from March 2021 through May 2021, tracking the critical areas marketers are investing in and where cuts are being made from people, programs and technologies.
While CMOs have increased investment into marketing innovation, 91% of respondents struggle to measure the impact of innovation, and 83% say that innovation has not delivered to management’s expectations. This is because many marketing organizations lack a clear definition and shared understanding of what marketing innovation means.
“Like ‘agility,’ the term ‘innovation’ has become ubiquitous in the language of modern business. However, there’s significant disagreement about what innovation actually means,” said Ewan McIntyre, co-chief of research and vice president analyst in the Gartner Marketing practice. “This isn’t just arguing semantics – definitions matter when it comes to delivering on business objectives related to innovation. Misunderstanding what innovation means to your organization has consequences that impact the scope, intent and outcome of activities.”
With 95% of CMOs reporting they have dedicated headcount for innovation initiatives, and another 93% agreeing that their organization will fund high-risk initiatives, there is a high price on getting innovation wrong.
Gartner defines innovation as “the execution of new ideas that create value” – this requires three key elements: novelty, execution and a useful outcome.
To ensure marketing innovation investments do not fall victim to risk associated with resources, strategy or credibility, CMOs should consider the following:
- Build a clear definition and shared understanding of marketing innovation. This will rid innovation programs of ambiguity, minimizing the risk of innovation-in-name-only.
- Clarify the enterprise’s appetite for “new” by being clear about the difference between ideas that are “new” to the world, “new” to the industry and “new” to the organization.
- Educate the marketing team and stakeholders on the dual modes of innovation – transformation and optimization – by being clear about the difference in potential risk and return.
Gartner for Marketers clients can learn more in the reports “The State of Marketing Budgets in 2021: Insights from Gartner’s Annual CMO Spend Survey” and “Marketing Innovation Essentials – Part 1: Defining the Scope of Innovation.”
About the Gartner Marketing Symposium/Xpo
Gartner analysts will discuss the key issues facing CMOs during the Gartner Marketing Symposium/Xpo, taking place virtually August 31 – September 2. This conference provides marketing leaders actionable advice about the trends, tools and emerging technologies they need to deliver business results. Gartner analysts address the biggest opportunities, challenges and priorities marketers face today, including data and analytics, customer experience, content marketing, customer insight, marketing technology (martech) and multichannel marketing. Follow news and updates for the event on Twitter at #GartnerMKTG.
About Gartner for Marketers
Gartner for Marketers provides the objective, expert advice, and proven tools that CMOs and other marketing leaders need to seize the right opportunities with clarity and confidence, and to stay ahead of the trends that matter. With in-depth research and analysis, Gartner for Marketers helps you focus on the opportunities with the greatest potential to deliver results. More information on Gartner for Marketers is available online at www.gartner.com/marketing. Follow news and updates from the Gartner Marketing practice on Twitter and LinkedIn using #GartnerMKTG.