Data usage expected to drive investment up
Globally marketing budgets are expected to increase across most industries, with technology chief marketing officers (CMOs) likely to increase their budgets while food and beverage and automotive CMOs are likely to cut their budgets.
While short term budgets are increasing slowly, securing a long term investment is the biggest challenge facing CMOs in the delivery of their strategy.
Therefore using data to target real people is the number one strategic opportunity for CMOs but a data breach is also high risk. At present China stand outs globally on the CMOs outlook at 40% for the potential use of artificial intelligence, machine learning and blockchain to drive more efficient marketing spend.
Innovation ranks at the bottom in terms of being identified as a key marketing role putting the ability to meet the demands of the digital economy at risk. However a significant number of CMOs in China at 63% and Australia at 56% see marketing’s primary role as developing the overall customer experience.
According to a major global survey among 1,000 CMOs and senior level marketers across 10 countries including Australia, China, Japan and the Asia Pacific, marketing investment is on an upward curve, as marketing’s role is strengthened with the use of data.
CMO’s are poised with the opportunity to turn consumer insight into commercial opportunity and new sources of revenue.
Dentsu Aegis Network’s ‘CMO Survey 2018’, found that six in 10 marketers globally expect marketing budgets to rise in the next 12 months.
However, it is the marketing budget increases among larger corporates that stands out – with 43% of respondents planning for increases of 5% or more, and just one in 20 expecting to see budgets fall.
Confidence is highest among technology, automotive and financial services CMOs.
Amongst all countries surveyed, we see the strongest disparities in Asia Pacific: Japan (35%) displayed lowest confidence in an increase in marketing budget while China (75%) showed the highest confidence.
However, the survey also suggests CMOs are facing significant challenges as they attempt to balance the opportunity to build new capabilities and enhance their role, with the risks and challenges driven by data and the digital economy.
The evolution of marketing data has been identified as the number one strategic opportunity for CMOs over the next two or three years, with 80% of CMOs also recognizing its importance in effective customer engagement.
However, the findings also reveal a substantial degree of caution.
Suffering a data breach is now the leading strategic risk identified, while a high proportion of respondents in Australia (63%) compared to China (53%) and Japan (47%), believe that data protection legislation such as GDPR will make it harder to build direct relationships with consumers.
Digital commerce shaping how marketers approach partners and suppliers.
Investment is expected to rise, but the survey reveals changing priorities, reflecting the increased focus data as an enabler of growth.
Investment in digital media, in-housing of marketing capability and a growing role for specialists are all high on the investment agenda.
Is there then a possibility of innovation being over-looked?
Just over one-third of CMOs identify “leading disruptive innovation” as one of their core functional priorities.
China CMOs (35%) lead the rankings amongst Asia Pacific CMOs, while Australia (32%) and Japan (31%) are closer in their perception of this functional priority.
Dentsu Aegis Network Asia Pacific chief strategy and innovation officer Arvind Sethumadhavan said there was a clear shift as senior marketers adapted to a digital economy characterized by customer led demand.
“CMOs are aware of the need to embrace digital transformation that orientates around a deep understanding of customers to deliver business growth.
“In Asia Pacific, we particularly see the opportunity for marketers to leverage data to secure long-term customer relationships.
“The diversity of the region is another factor that increases the need for Asia Pacific CMOs to ensure they are able to deliver a consistent brand narrative targeting real people.
“This has strong potential to transform marketing’s role as the architect of a business’ long-term vision,” he said.
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