Posted on by Raihan Hadi
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Wake up call for CMOs needed, stop overspending on technology
19 Jun
Chief marketing officers (CMOs) are in a creative rut that is hurting the value of their brands as they offer digital customer experiences that all look and feel the same, Forrester Research said in a report.
The firm recommended that brands shift USD$19 billion earmarked for some technologies — such as mobile, social media and ad tech — to more creative efforts in order to see $10 billion more in ROI over the next six years.
Some brands focused on cutting agency fees and reinvesting that money in technology or working media dollars are seeing an adverse effect, like declining share value, as they fail to properly invest in brands, per the report.
Also, efforts to increase cost efficiencies by in-house operations may have reached the end of the road, as most brands have completed work around in-housing creative services as well as digital and video capabilities.
What remains, like data sciences and e-commerce, are more costly and time-consuming, and therefore may not make sense to in-house.
CMOs have the fastest-growing tech spending among C-suite executives, with projected increases of 9% to 11% on data and analytics, ad tech and marketing automation, while spending on agency services advances by a meager 2.4% a year until 2022, Forrester said.
The firm surveyed more than 100,000 Americans about their interactions with brands, and found that 81% of brands showed little change in their CX Index scores.
Forrester’s report about customer experience includes several warnings about overspending on technology while underspending on creative efforts that help consumers distinguish one brand from the next, especially on digital platforms.
Investing in technology has become a significant priority to keep pace with changing consumer habits, but CMOs need to look beyond “functional experiences” to break out of the customer-experience rut.
CMOs need to rethink investments and shift resources out of baseline technology and into creative customer engagements, while finding the right balance between brand differentiation and digital, Forrester said.
While investments in data, analytics and marketing automation help organizations, other technologies may be wasteful, such as investments in maturing areas like mobile and social advertising platforms.
Ad tech has become more standardized, making it ripe for cuts. Forrester also recommends hiring tech-savvy agencies that can apply creativity to all touch points including advertising, content, experiential, digital products and customer service.
Creative differentiation can become an organizing principle for CMOs who are developing their growth strategies for digital, physical and communications experiences for customers.
Forrester recommends working with agencies that use technology to support better creativity.
Data-driven strategies need to inform the creative process in order to help brands differentiate themselves from others and generate a return on investment.
Tech giants like Adobe, Amazon Web Services, Google, Oracle and Salesforce will invest more heavily in creative services to provide customer-engagement solutions, Forrester said.
