CMOs declare 2013 the Year of Digital

Fewer than one in five CMOs think their organizations are any good at digital marketing and 60% say they will be making agency changes this year to address a lack of innovation and dearth of value-added thinking from their outside partners. Half plan to hire new talent this year, with digital operations a priority.

Those are the key findings of a survey of 550 international marketing honchos surveyed by The Chief Marketing Officer Council. More than 30% of the sample represented enterprises with revenues in excess of $1 billion and another 11% hailed from companies with annual sales between $500 million and $1 billion.

“They are charging into Big Data. Data and web analytics are going to be big hiring priorities for marketing departments,” says Liz Miller, VP of the CMO Council, which counts more than 6,000 members worldwide. “It’s a directive from the top. The CEO is saying to the CMO, ‘Listen, customer preference is controlling the switch, so come to me with accurate measurement, give me visibility into the marketing spend.”

Miller sees a distinct tipping of marketing budgets to digital projects, both customer-driven and operational, noting that, on average, 27% of marketing budgets are being allocated to digital imperatives while only 23% of funds went to more traditional marketing expenditures. “We see big multinationals that spend 50% of their budgets on digital. Adobe recently came out and said it now devotes up to three quarters of its budget to digital,” she says.  “CMOs are coming out and saying, ‘We are the ultimate representative of the voice of the customer. We translate the brand into business, and that’s no longer just the stewardship of branding and advertising.”

By their own admissions, however, most marketers fall short of the grandiose expectations they have for themselves. Nearly three quarters of them, 64%, budgeted less than $500,000 to digital media–less than 10% of total marketing budgets in almost half of those cases.  Miller feels that a sense of economic recovery among companies this year will help marketers fund new initiatives, observing that 57% had their budgets increased in 2012 and 54% expect an increase in 2013.

They also appear ready to seek savings at the expense of their agencies. Just 12% of senior marketers saw their agency partners as “extremely valuable.” Meanwhile, nearly half of them (47%) say the outside help is average, underperforming, or not producing at all. “Marketers are saying, ‘We asked them for a lead-generation strategy and then gave us a lead-generation campaign,’” Miller says. “They’re tired of having to pay several divisions of the same agency to get a patch work of disparate, loosely driven programs. Agencies are overselling and under-delivering.”

One thing agencies need not fear: Marketers won’t be raiding their shops to stock expanded in-house operations, according to Miller. “The type of talent they say they’re looking for is not the talent they brought in 10 years ago. The people they want they can’t find in the agency world,” Miller says. “They want hyper-creative yet hyper-nerdy types. People that get budget, that get reporting, but who can be creative about customer engagement. They’re looking to IT, finance.”

CMOs, though in a state of flux, feel comfortable in their roles. Only 11 percent of them believe their jobs are at risk and 69% received pay increases this year, with 42% of those expecting similar bumps in 2013. But they left little doubt that they foresee a rocky transition ahead to a newly defined lead marketer’s position. While noting that customer service and sales were the areas they had least control over, nearly half of respondents named integration with sales and channel groups as their most important challenge in the coming year.

“We also see product development starting to fall under CMOs,” says Miller. “The CMO position influences more individual touch points across most organizations, yet it remains the job that is least universally defined.”

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