American CMOs are more optimistic about the overall economy than they have been in years, and with that optimism comes renewed enthusiasm with respect to marketing budgets, finds the latest edition of the biannual CMO Survey [pdf] from Duke University’s Fuqua School of Business. Indeed, respondents expect budgets to increase by 8.7% over the next year, the highest percentage change forecast since August 2011.
Interestingly, not all sectors are expecting such changes. B2B product (9.1%) and services (9.2%) companies are significantly more enthusiastic than last year in their projections, as are B2C services companies, now forecasting a 13.4% increase after a 5.8% growth forecast last year. But it’s a different story for B2C product companies: these respondents expect just a 5% increase in budgets this year, down from a predicted 7.1% increase in last year’s survey.
As has been the case for several quarters now, digital marketing spending projections are far outstripping traditional media’s growth prospects. In fact, the 14.7% estimated rise in digital marketing spending represents the highest figure in at least 3 years. Meanwhile, even the enthusiastic predictions for overall marketing budget increases aren’t enough to lift traditional media’s boat, as CMOs envision a 1.1% decrease in traditional advertising spending over the next 12 months.
The survey also reveals that CMOs are bullish on mobile budgets, forecasting them to rise to 9% share of marketing budgets in the next 3 years, up from 3.2% this year. Even so, mobile trails social distantly as a budget item in CMOs’ minds: currently capturing 9.9% of marketing budgets, CMOs see social comprising 13.5% of budgets next year and 22.4% in the next 5 years. Social’s budget influence ought to be strongest among B2C services companies, per the study, with these respondents estimating that social will occupy a hefty 27.7% of their budgets in the next 5 years. (See here for details on marketing analytics spending from the same survey.)
All of that spending comes despite a lack of social media integration with marketing strategy: fewer than 1 in 5 CMOs rated social’s integration a top-2 box score on a 7-point scale. (And B2C services companies were the least likely to do so, at just 12%.)
Moreover, spending on social media continues to look up even as CMOs still struggle to prove its impact. Fully 45% of CMOs reported being unable to show yet the impact that social media has on their business. And the vast majority of the remainder only have a qualitative rather than quantitative sense of its impact. In fact, just 13.2% of respondents overall say they have proven social’s impact quantitatively. This has been a persistent issue for years now, and shows no signs of abating.
It’s not just social media that CMOs are having a tough time measuring quantitatively, though. While they have a better handle on measuring overall marketing spend, only about 4 in 10 CMOs report being able to prove the short-term impact of marketing spend on their business quantitatively, and even fewer (34%) are able to prove the longer-term impact quantitatively. On the positive side, both figures represent an improvement from last year’s survey results.
Nevertheless, 6 in 10 CMOs surveyed say that they feel pressure from their CEO or Board to prove the value of marketing, and all say that the pressure is either increasing (58%) or remaining steady (42%).
About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from January 13 to February 3, 2015. The survey had 288 respondents, of whom 84% were VP level or above.