It was only 6 short months ago that the oft-cited trend for increased digital marketing spending and decreasing traditional media spend appeared to be leveling off. But the latest biannual installment [pdf] of The CMO Survey from Duke University’s Fuqua School of Business strikes a familiar tone once more, as forecasted spending growth rates for digital and traditional media are again taking on different trajectories.
Indeed, CMOs surveyed for the report in August now forecast a 10.8% increase in digital marketing spending over the next 12 months, the highest forecast growth rate in 2 years, and up from a relatively smaller 8.2% projected increase in February 2014.
By contrast, the forecast for traditional advertising (referring to any media advertising not using the web) is not kind: CMOs expect to decrease their spending by 3.6% in this area, the biggest forecast decrease going back at least 3 years.
The overall trend aligns with recent data from the CMO Council, in which global marketers were most likely to be increasing their spending on digital channels such as social media and online video – while being most likely to be cutting back on traditional media channels such as print and TV.
While those changes in the marketing media mix might be made in support of shifting consumer behavior, it’s worth noting that traditional media advertising remains highly effective in influencing consumer purchase behavior across all generations, as revealed in a recent MarketingCharts Debrief on advertising effectiveness.
Returning to the CMO survey, the results indicate that B2B services (11.5%) and B2C product (11.2%) companies are forecasting the largest percentage increase in digital spending, with B2C services (9%) companies upping spending by a relatively more modest amount. Overall, CMOs expect their marketing budgets to increase by 5.1% over the next year, with this sentiment highest among B2C product (7%) and B2C service (5.3%) companies.
In other budget-related survey results:
- CMOs are expecting to increase their spending on customer relationship management (7.9%) and new product introductions (7.8%) to a larger degree than their spending on new service introductions (4.5%) and brand building (4.3%);
- Respondent expect to hike their marketing research and intelligence budgets by 3.8% over the next year, down from a 4.9% forecast increase in the prior survey;
- Marketing budgets comprise an average 10.9% of firm budgets, unchanged from the February survey; and
- Marketing budgets are highest at B2C product companies, where they represent 17% of firm budgets, and lowest at B2B services companies, where they comprise 7.7% of overall budgets.
About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from July 22 to August 12, 2014. The survey had 351 respondents, of whom 89% were VP level or above.