There’s been no progress in CMOs’ use of marketing analytics, according to the latest edition of the biennial CMO Survey from Duke University’s Fuqua School of Business. If anything, the use of marketing analytics is losing steam: respondents say that fewer than one-third of projects used analytics prior to a decision, down from 37% five years ago.
This seems a puzzling development, given that one of the key benefits ascribed to analytics is better understanding and measurement of ROI, a problem that still hounds CMOs today. Indeed, only about one-third (34.5%) of CMOs are able to prove the impact of their marketing spending quantitatively, a figure that hasn’t budged in several years of the survey.
The study asked respondents to identify factors preventing their companies from using more marketing analytics. The leading obstacle, per respondents, is a lack of process/tools to measure success through analytics, followed closely be a lack of people who can link to marketing practice.
By comparison, fewer say that analytics are not highly relevant to their decisions or do not offer sufficient insight. As such, it seems that the trouble is in having the skill set to figure out how better to use the available tools – and to supplement them if needed. No wonder that marketing leaders identify analytics as one of the top skills for which they’re looking to hire.
Given the challenges they’re finding and the limited use of analytics, it’s not too surprising that analytics aren’t making much of an impact on performance basis. Asked to what degree the use of analytics contributes to their company’s performance, CMOs gave it an average rating of 3.7 on a 7-point scale (where 7 is “very highly”). In other words, analytics’ contribution is middling at best, though it seems to have more of an impact for B2C product (4.6 rating) and service (4.3) companies.
One things seems quite clear, though: if resources were a constraint, CMOs don’t want them to be in the near future. To wit: while respondents reported spending just 4.6% of their current budgets on analytics, they expect to allocate almost 22% share in just 3 years’ time. Larger companies are leading the way in analytics budget enthusiasm: companies with $1-9.9B in revenues expect to direct almost one-third (32.4%) of their budgets to analytics within 3 years, while those with at least $10B in revenues are close behind (29.4%).
Those are some pretty heady numbers, and they might not be worth trusting. While numerous pieces of research (including this one) indicate that analytics budgets are rising, CMOs responding to the Duke University survey seem to consistently paint rosier budget forecasts than they’re able to execute. For example, in February 2012, CMO respondents projected that by now they would be allocating 19.5% of their budgets to social media. The actual figure reported in this survey? Around half of that (10.5%).
Still, that 10.5% figure is up from the reported share 5 years ago, so expect analytics spend to go up. Stay tuned to find out if its contribution to performance also grows…
About the Data: The results are based on a survey of 388 top US marketers at for-profit companies.