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Marketers not seeing big budget cuts, survey says

Senior marketers report that they're not being forced to cut budgets significantly, but they are being asked for more demand gen and are spending less on advertising.

A recent survey of 650 senior marketers found some surprising results, considering the state of the global economy.

Marketing budgets are holding firm despite the recession, according to the CMO Council's annual survey. Slightly more than half of respondents reported that their budgets are holding steady or seeing slight increases.

"That's certainly a great thing -- for the first time in a long time, external factors haven't taken a slash through the marketing department," said Liz Miller, vice president of programs and operations for the CMO Council. "It's always been that the axe starts in marketing. That is slowly changing because marketers are a source of demand generation and driving sales performance."

Indeed, realigning operational processes to support sales and drive demand generation was cited as the top accomplishment of the year, according to the survey.

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Marketers are not seeing "major" reductions in staffing either, according to the report.

However, marketers are making sacrifices, particularly in advertising on print, radio and television.

"If one group is seeing a bit more [of those deep cutbacks], it's those traditional advertisers," Miller said. "We're being forced to do a lot more with -- not huge budgets -- but budgets we had last year. It's forcing marketers to be smart with the dollar."

The leading executive mandate to marketing departments is to grow revenue and increase market share, followed by lowering costs and improving go-to-market efficiencies, the survey shows. And that demands measurement.

According to the survey, the leading measure of marketing's performance is sales pipeline status and performance, cited by 65% of respondents; followed by revenue and market share, with 64% of respondents; and marketing ROI, cited by 60%.

"Metrics are really gaining in importance," Miller said. "What was surprising was the admission by senior marketers that they feel ill-equipped to demonstrate the value of online marketing spend. We're going to want to see more from returns on our investment, not just page views and traffic, which were No. 1 and No. 2 for online performance last year. Where marketers tend to go is to raise the awareness of the journey and path once a customer arrives on your site and -- wow -- do you turn page views into customers and leads."

Yet measurement of online marketing is lagging, according to the report. Page views and registrations, measured by 65% of respondents, and volume and origin of site traffic, measured by 58%, are the leading metrics in that area; while business-focused metrics like customer acquisition, measured by 45%, and traffic to offline retail outlets or stores, at 9%, get less attention.

In fact, the report suggests that customer experience management is not getting enough attention.

"Put money into the customer experience," Miller said. "We need to make investments in monitoring the customer voice. Most marketers now do that through email and customer service, but those are inbound channels. Most companies are not monitoring social media sites or portals for that word of mouth. We're not really yet covering that voice of customer span," she said, "and that's so important when it comes to optimizing the customer experience."

The lack of focus on customer experience management, according to the report, is due to customer service being out of marketers' span of authority. Just 9% said customer-centric functions are their responsibility.

And while budgets may be relatively safe this year, don't count on that to continue, the CMO Council advised.

"Watch how you invest, and make sure you make the most of every dollar," Miller said. "It's great we're not cutting this year, but if we have a year of frivolous spend without a lot of demand gen, we'll be in a very different position next year."

More from the report:

  • Asked about 2009 budgets, 27% of respondents said they anticipate an increase of at least 1%, and 8% predict an increase in spending of more than 15%. On the other hand, 46% anticipate a decrease in spending of more than 1%, and 17% expect a decrease of more than 15%.
  • Among marketers expecting to make changes to agency relationships, the key areas were in Web design and development (42%), interactive marketing (29%), and public relations (27%).
  • Point solutions dominate marketing automation spend. The top two areas for technology investment were email marketing, cited by 45%, and online surveys and research, cited by 33%. Just 10% plan to invest in master data, 13% in marketing operational systems, and 9% in marketing resource or process management applications.

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