CMOs expect to be allocating significantly larger budgets to one of their core leadership objectives, brand building, according to the latest edition of the biennial CMO Survey from Duke University’s Fuqua School of Business. Respondents to the survey are reporting relatively healthy increases in brand value and upping the ante by forecasting sizable spending hikes on brand building.
Over the next 12 months, CMOs responding to the survey (all of whom are based in the US) expect to increase their brand building spending by almost double-digits (9.7%). That compares to a range of 4.3-6.3% expected increases over the prior 2 years’ worth of surveys. In other words, this is a notable jump in spending expectations.
The projected spending increase on brand building compares favorably to increases in other areas, including CRM (7.9%) and marketing research and intelligence (5.3%) – and comes amidst enthusiasm about overall marketing budgets, which are forecast to rise by 10.7%.
Services companies appear to be at the forefront of brand building spending growth, led by B2B services (13.3% rise expected) and B2C services (11.3%) companies. B2C product companies, by comparison, are predicting the smallest rise in brand-building budgets, of 5.3%.
Overall, B2B companies seem to be growing their brand-building budgets more than their B2C counterparts. Recent research similarly finds that B2B firms are upping their brand investments with an eye to improving inbound marketing and stakeholder value.
Brand Value on the Rise
Enthusiasm for brand-building budgets may be tied to past performance. In this latest edition, CMOs reported a 3.8% increase in brand value over the past 12 months, up from 3.3% the previous year. Growth in brand value outstripped comparative growth rates in customer metrics, notably for acquisition (3.1%) and retention (1.5%).
Once again, it’s B2B companies that are reporting the biggest increases: brand value growth was highest at B2B services (4.2%) and product (4.1%) companies, though B2C product (3.9%) companies were close behind. By comparison, B2C services companies saw limited brand value growth of 1.9%.
It’s worth noting that brand awareness and brand building is the most common use of social media across business types, and that CMOs are again forecasting sizable growth in spending on social media marketing. Traditional advertising budgets (which tend to be more focused on branding than direct response) remain flat with an 0.6% rise expected, though that’s the first increase reported in the February edition of the study in at least 5 years.
Branding the Top Activity for Marketing Leadership
The spending uptick on brand building means that CMOs will be focusing more on their core area of leadership: the brand. In this latest survey, 86.5% of respondents said that marketing is primarily responsible for the brand, a figure that’s well within the 82-89% range seen in the past few surveys.
In fact, marketing is more likely to be responsible for the brand than for any other activity, including social media (77%), advertising (76%), public relations (70%) and promotion (69%).
The only company type for which the brand is not marketing’s top remit? B2C services companies, where CMOs reported being more responsible for social media and advertising than branding. Perhaps that’s why B2C services companies reported such smaller gains in brand value in the prior 12 months…
About the Data: The results are based on a survey of 388 top US marketers at for-profit companies, 95% of whom are VP-level and above.