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dukecmosurvey-cmo-marketing-spend-projections-august2012.pngCMOs remain enthusiastic about online marketing, projecting an 11.5% increase in spending in this area over the next 12 months, although this represents a 10.2% decline from their 12.8% growth forecast from 6 months ago, according to [pdf] Duke University’s Fuqua School of Business, which released its latest CMO Survey in August 2012. Even so, the latest online marketing spending outlook compares favorably with CMOs’ forecast for traditional media advertising spend, which fell to -1.9%, from -0.8% in February.

This contrast has shown up in various research of late. In June, survey results from RSW/US found 2 in 3 marketers claiming to have moved at least 30% of their budgets from traditional to digital media in the past 3 years. Earlier, in March, a study from DataXu indicated that among CMOs who had witnessed a shift in budgets in their organization over the past year, 55% had seen a shift of at least 25% of their marketing budgets from traditional advertising to digital media. 41% projected a shift of at least that amount in the next year.

CMOs Also Focused on New Product and Service Introductions

Meanwhile, further details from the Duke University survey reveal that CMOs are looking to spend more on new product (9.4%, up from 8.5% in February 2012) and service (6.4%, up from 4.2%) introductions over the next 12 months. They are also forecasting a 9% increase in budgets devoted to customer relationship management, an increase from 7.1% expected growth in February and 6.5% projected growth in August 2011.

Planned spending growth on brand building is relatively steady at 7.5%, compared to February’s 7.2%.

CMOs to Up Spending on Marketing Knowledge

CMOs have also increased their spending forecasts for a variety of knowledge-based activities. Over the next 12 months, they expect to spend: 8.2% more on marketing research and intelligence (up from February’s 6.2% forecast); 8.2% more on integrating what they know about marketing (up from February’s 6.6%); 7.2% more on marketing training (up from 3.7%); 5.8% more on developing knowledge about how to do marketing (up from 4.6%); and 3.3% more on marketing consulting services (up from 1.7%).

Marketing Budgets Get Bigger Share of Overall Funds

dukecmosurvey-mktg-share-of-firm-budgets-august2012.pngDriving this increased spending on marketing knowledge is an overall larger portion of firms’ funds being devoted to marketing activities. In August, CMOs estimated their marketing budgets to account for 11.4% share of their firms’ overall budgets, up from 10.4% in February 2012, 10% in August 2011, and 8.1% in February 2011.

B2C product companies appear to be devoting the largest share of their budgets to marketing, at 17.4% (up from 16.1% in February and 11.6% in August 2011). B2B service companies are allocating the next-largest share, at 11.6% (up from 8.2% in February). While B2C service companies report 10.7% share of their budgets going to marketing, this is a significant step back from 16.8% 6 months earlier. B2B product companies are sending the smallest proportion of their budgets to marketing, at 8.5%, relatively unchanged from February. This means that B2C product companies are devoting more than twice their share of budgets to marketing than B2B product companies.

Other Findings:

  • When segregating the responses by company sales revenue, the study finds that CMOs from companies with more than $10 billion in sales revenue are devoting the largest share of their firms’ budgets to marketing, at 18.1%. This is a dramatic jump from 8.8% in February and 6.6% in August 2011.
  • Companies with more than 10% of their sales deriving from the internet are allocating more of their budgets to marketing (16.4%) than companies with up to 10% of their sales coming from the internet (10.2%).
  • On average, CMOs report that their marketing spend represents 11% of their firms’ revenues, up from 8.5% in February. B2C service companies, companies with more than $10 billion in sales revenue, and those with more than 10% of their sales derived from the internet, each lead their respective categories in this metric also.
  • Although marketing budgets are taking a bigger piece of the overall pie, CMOs have cut their expectations for marketing spending growth in the next 12 months to 6.4%. This is the lowest growth outlook since February 2010 (5.9%), and is down from 8.1% in February.

About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from July 17 to August 3, 2012. 528 CMOs responded to the survey, of which 86% were VP level or above.

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