Companies are spending more on marketing analytics. Overall, they also reap greater benefits, but the value of marketing analytics varies substantially between companies, according to the latest CMO Survey published by Duke University’s Fuqua School of Business.
Spending on marketing analytics has grown steadily over the last three years, from 4.6% of marketing budgets to 7.2% this year, according to the survey. Researchers expect marketing analytics budgets to grow by 61% over the next three years to reach 11.6% of marketing budgets.
Companies that rely more on Internet sales for their revenues and those with larger revenues spend a larger share of their budget on analytics. Companies in communications/media, healthcare and professional services spend more on marketing analytics; those in retail/wholesale, energy and consumer packaged goods spend less.
Seeking Quantitative Answers
One possible reason for less spending: Only 40% of marketers say they have the quantitative tools to demonstrate the impact of marketing spend on company performance. “The silver lining is this is the highest reported level of use of quantitative tools in the history of The CMO Survey,” writes Christine Moorman, a Duke University professor of business administration and founder of the CMO Survey.
Companies use marketing analytics in decision making 39.3% of the time on average, representing a 29.3% increase since the annual survey first asked the question in 2013. Companies in education and retail/wholesale are the strongest users, while consumer services firms are the lowest.
The survey also reveals large differences in how much marketing analytics contributes to company performance. The larger the company in terms of sales revenue and the greater the sales from the internet, the stronger the contribution.
How to Gain More from Marketing Analytics
To gain greater benefits from marketing analytics, organizations can:
- Use marketing analytics to create personalized messages and improve the customer experience.
- Beware of trying to track too many metrics, which causes an overwhelming deluge of data.
- Make better use of data scientists. Experienced analysts often spend much of their time organizing, integrating and preparing data rather than analyzing the data and seeking meaningful insights. Consider outsourcing and automation to allow talented, expensive data scientists to focus on seeking valuable insights and relieve them from more mundane tasks.
More Key Findings
These are some of the survey’s other key findings:
Although 73.5% of marketing leaders are unlikely to use their brands to take a stance on politically charged issues, this percentage is trending down from the 82.6% who reported being unwilling in the February 2018 CMO Survey. B2C companies are most likely to take a stance on an issue.
Respondents reported a 27% increase in the use of artificial intelligence and machine learning over 2018 levels. Marketing leaders expect to adopt these technologies to an even greater extent over the next three years. Most companies use AI for content personalization, predictive analytics for customer insights, and targeting decisions. The adoption of blockchain technologies in marketing is slower, with no real growth over 2018 figures.
Although companies continue to build new marketing capabilities by training current employees or hiring new employees with needed skills (53.8% of firms), this number has decreased from 59.8% in August 2018. Partnering with agencies and consultancies to build new capabilities has, in turn, risen.
Planned hiring for marketing for the next 12 months increased 6.2%. B2C services companies expect to hire the most at 8.6%. In response to the question, “To what extent are new technologies replacing marketing employees?” 57.6% reported not at all currently, but this number is expected to drop to 37.5% in the next three years. B2C services companies report the most replacement.
Bottom Line: While more companies see the value of marketing analytics, the impact of analytics varies greatly between companies, depending on their size, sector and other factors. However, analytics will likely enhance performance of more companies in the near future as companies increase spending, consider automation, and outsource tech services.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.