Digital Marketing Spend Roars Despite Weak Privacy Concerns And Capability Performance
Results from the August 2018 CMO Survey indicate that marketers are charging ahead with digital spending. At the same time, concerns about privacy and the state of digital marketing capabilities lag.
Let’s begin with the spending. Digital marketing expenditures are expected to increase by 12.3% over the next year and marketing budgets, which are currently 44% digital, are expected to reach 54% digital in the next five years. Consistent with this, spending on social media climbed more sharply over the past year than in any 12-month spell since the survey began. Companies currently spend 13.8% of their marketing budgets on social media, 4 percentage points more than a year ago. That is expected to increase to 16.3% over the next year, and to 22.9%—almost a quarter of marketing budgets—in five years. The Survey also found mobile marketing accounts for 9.4% of marketing budgets, with that share expected to double in the next three years. The proportion currently spent on mobile has more than doubled since February 2017.
Now to the lags. Sixty-two percent of marketing leaders reported that use of online customer data increased at their firms in the last two years, and 70% said they expect to use more online data in the next two years. These numbers are lower for use of customer data from third-party aggregators, with only 31.3% of marketers reporting increases over the last two years and a slight decrease to 29.7% expected in the next two years.
Survey results point to this lag by showing that although firms are spending more on social and mobile, there has been no lift in the contributions of these expenditures to company performance. It’s time to build a sustainable engine for converting digital investments into digital bottom line performance. At present, almost 60% of marketing leaders report they build marketing capabilities on their own by training current or hiring new employees with those skills while only 38% engage in some type of partnering with agencies, consultancies, or companies in their value chain. Just 2% acquire other companies to help them learn. It may be time to shake up these knowledge acquisition strategies if the current “build” strategy doesn’t pay off soon!
Article written by: Christine Moorman0