CMO Council Report: Marketing Budgets on the Upswing

While television should once again account for the lion’s share of global marketing spend in 2013, a disproportionate number of executives report that search is a far more effective medium through which to generate consumer demand. According to a new study from the Chief Marketing Officer Council, 27 percent of those surveyed said that TV was the most impactful medium through which to advertise one’s brand, whereas 44 percent said that search was the superior vehicle. Among the findings in the 55-page “State of Marketing 2012” report, executives are particularly enthused by search and social media but said that they are not satisfied with their current digital-marketing performance. Nearly half of the CMOs surveyed said that making over their digital strategy would be one of the most important challenges facing them in the New Year. Despite this apparent mandate for change, 64 percent of marketers are still budgeting fewer than $500,000 for digital spend, and 46 percent report that this figure represents less than 10 percent of their overall marketing spend. That said, marketers expect to increase their digital investments in the coming year. Per the CMO Council study, 47 percent said they planned to boost allocation to digital to 10-24 percent of their total marketing budgets, while 22 percent said digital would account for anywhere between 25 percent and 49 percent of their overall media mix. In the U.S., TV accounts for roughly one third of all media spending. Analysts estimate that overall TV spend—a catch-all that includes national and local broadcast, network cable, syndication and Spanish-language channels—will add up to some $65 billion in 2013, out of a projected total media haul of $186 billion. The CMO Council’s report was culled from responses to an online survey of 550 senior marketing executives representing major media markets such as North America, Europe, Asia-Pacific and Africa. According to Liz Miller, the CMO Council’s vp of global programs and operations, Asia is lagging on the digital front, as some 37 percent of marketers in the region allocate less than 10 percent of their spend to digital platforms. “It’s clear that marketers across the region are ready to run into a digital future, but as the hyper-connected digital consumer continues to evolve, marketers must invest in the people, processes and platforms that will better predict and prepare them for these engagement opportunities,” Miller said. All told, 54 percent of CMOs surveyed said they had increased their overall budgets in 2012, while 22 percent reported that they had made reductions in their marketing spend. While social and search are expected to grow by leaps and bounds in the year ahead, most categories are expected to see more modest growth. The CMO Council report flagged only one significant backslider, as 31 percent of those surveyed said they would be slashing their newspaper budgets. Analysts expect stateside newspaper spending (national and local) will drop off by as much as 7 percent. While still the king of the hill, TV spend could be hampered by imprecise performance metrics and rapid declines on the broadcast side of the ledger. Analysts believe national cable will be responsible for much of TV’s modest gains, with revenues expected to increase by as much as 8 percent to some $30.5 billion. Broadcast gains are likely to be more modest, with sales on track to grow around 3 percent to a little under $14.5 billion. Another finding culled from the survey should give media agencies pause. According to the report, 60 percent of respondents said they expect to make an agency change in 2013, with a need to improve their social-media expertise cited as a major reason for the shift. Only 12 percent of respondents felt their agency partners were “extremely valuable.” A number of CMOs also said they planned to move previously outsourced services back in-house, particularly in areas like data analysis and research. This would be a reversal of the trend of a few years ago that saw many agencies radically reduce headcount in their research departments.

Convergent TV

CMO Council Report: Marketing Budgets on the Upswing

Execs eye big increases in digital spend, while TV growth could slow

Anthony Crupi

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Anthony Crupi