Spending on marketing analytics is expected to almost double in the next three years, with US CMOs estimating they will be spending 11.3% of their budget on the category by 2022 (vs. 6.6% in February 2019), according to the latest CMO Survey report.
Spending optimism appears to be following greater use of analytics. After a brief dip in the earlier edition of the survey (in August 2018), when CMOs said they used marketing analytics in decision-making about one-third (35.8%) of the time, the latest figures show a six-year high (43.5%) in the percentage of time analytics is used in decision-making.
That being said, other research has painted a mixed picture. While a recent report by Econsultancy and RedEye Optimisation found that analytics is a valuable source of insights, another report by Ipsos reveals that over half (58%) of marketers admit they relied heavily on their intuition.
It’s true that B2C companies continue to use analytics to a much greater extent than their B2B counterparts. In this latest edition of the survey B2C CMOs said that they used analytics in their decision-making more than half the time, while for B2B companies analytics is used less than 40% of the time.
Nevertheless, it appears that marketing analytics are quite some way off from the data-driven nirvana that will enlighten marketers to stellar performance gains, as evidenced by the trend data for this report stretching back a number of years.
Based on a 7-point scale, CMOs rated analytics’ contribution to company performance at an average of 4.1. While this rating has risen since 2017’s 3.9, it has remained generally flat since 2012, when the figure was 3.9.
That being said, larger companies do seem to be benefiting more from analytics than smaller companies. Using the same 7-point scale as above, the report shows that companies with sales revenue of $10+ billion rated analytics’ contribution to a company’s performance a 4.7, while companies with less than $25 million in sales revenue gave an average rating of 3.8. The report also found that companies with a greater percentage of sales coming from the internet report more benefits from analytics than those for whom e-commerce is not a significant revenue channel.
Only time will tell as to whether the forecast rise in analytics budgets will pay dividends in driving company performance.
The full report with other firm and industry breakdowns can be viewed here.
About the Data: The CMO Report is comprised of results from a survey of 323 top marketers from US for-profit companies. A majority (97%) of respondents were VP-level or above.