Gartner Indicates Seven Future CMO Spending Trends in Their Latest Survey

By Viraj T On Dec 11, 2018

Gartner Surveys 600 Marketing Champions Across the US and the UK to Uncover Industry Trends for Enterprises to Prioritize Their Budgets and Allocate Funding

Innovation emerges as the loudest thought in a CMO’s cognizance! About 16 percent of Chief Marketing Officers have confirmed that they spent the maximum on innovation in 2018 — two-thirds confirmed that spending on innovation will grow next year. The irony here is that marketing leaders admitted they are not very confident about how to innovate or exactly where to spend — although beaming of huge ambition about being innovative.

MarTech Series runs down Gartner’s findings and talks about eight trends for 2019 and beyond where marketing leaders are most likely to spend.

1. Digital Marketing

The winds of change have begun to flow! Businesses are going digital by the hordes and the pursuit to make businesses successful on digital mediums has now gotten the eyeballs of the entire C-suite. 57 percent of marketing leaders are confirming now that they would be inclined to spend on digital marketing endeavors.

We interacted with Derek Slayton, CMO Terminus, and asked him his views on 2019 CMO spend:

“I actually think marketers are going to have to spend on technology to help with the first two bullets (better targeting and better measuring progress). Most activity-oriented systems today don’t help with where we point the resources and how we measure success.

As far as my team goes — tech aside from Terminus tech (which we are using for segment identification and measurement) — we are excited about Vidyard because it helps us focus on creating great connections with key accounts and stakeholders.”

However, CMOs need to work in conjunction with CFOs. Convincing financial officers to invest for methodologies not yet in the limelight can be extremely hard for the CMO. More so, even if they agree, the CMO is accountable for ROMI.

Also Read: Gartner Predicts Digital Optimization Will Disrupt CRM Sales Technology

2. MarTech

Marketing Technology is on the radar of CMOs for investment. MarTech spend has increased when compared to the percentage spend last year (29% in 2018 as against 22% in 2017). Evidently then, MarTech is the crux of CMO spend because it serves as the paramount source of marketing resources and initiatives.

As per Gartner’s survey, CMOs will be spending the most on the below mentioned ‘big three’ technologies:

Email Marketing platforms
Web Content Management
Digital Marketing Analytics platforms

Although, Ewan McIntyre, who is the lead author of the report, asks CMOs to practice caution. MarTech is extremely effective but can be costly. Marketing leaders need to think this through in order to avoid financial disasters.

3. Advertising

The survey reflects the CMO’s annual spend for 2018 was capped at 21 percent for advertising. This is for both offline and online (digital) models of advertising. However, as per the first trend of this report, CMOs now prefer to spend a lot more (two-thirds out of the 21 percent budget) on digital advertising. Paid advertising on digital channels such as search engines, social mediums, et al. are the focus areas of digital advertisement spending.

Also Read: Can Google’s Flutter Truly Solve the Developer Nightmare of Cross-Platform Application Programming?

We spoke to Jenn Steele, CMO, Madison Logic, to understand if she agrees with the trends:

“Well, ABM is still super-hot, so I see people continuing to spend on various ABM tactics. At our recent client summit, everyone was buzzing around how to use data in the best ways, so data sources and solutions should be in most marketers’ budgets.

Personally, I’m looking at AI tools such as Drift and Conversica so that I can do more with less (because we all have to do more with less, right?). These tools help us drive contacts to a more “ready” state before we have to get a more expensive human being involved.”

GDPR and the current atmosphere of user privacy and data security is the worst nightmare for owners of digital mediums. Even when red flags are being raised for brands as huge as Facebook, marketing leaders choose to continue ingesting a substantial chunk of dollars for paid advertising. Main reasons? Increasing revenues and proving to stakeholders that marketing is a critical cog to aid the enterprise’s engine to run smoothly. Other reasons are bolstering brand value gaining new business.

4. Workhorses

Tech watchers are going gaga over emerging technologies such as ABM, AI, ML, Programmatic and Native among many others. Even then, CMOs spend a whopping 25% on workhorse technologies such as email, organic search, paid search, etc. So why do marketing leaders continue to invest in these technologies that belong to a prior phase of MarTech evolution? Here are the reasons:

These channels are easy to measure for ROI
Easier to groom in-house talent to operate workhorse technologies
Easier to prove the effectiveness of these channels to stakeholders compared to newer, impactful but complex technologies

Workhorse technologies still work, and really well!

5. Innovation

Innovation is a major focus area for the CMO. According to 9 percent of the CMOs surveyed, innovation will be vital in enterprise growth over the coming 18 months. And they are right — the business eco-system overall is flux. Disruptions, changing consumer behaviors, M&As, and so many other factors are ensuring that it is difficult for enterprises to run their business. Hence, innovation automatically becomes the fallback element of every enterprise.

Also Read: Interview with Peter Isaacson, CMO, Demandbase

To confirm the growing importance of innovation, now, 63% of CMOs confirm that their spend on innovation will only grow in 2019.

Speaking about innovation, Jeff Nolan, CMO, Kahuna, said,

“Modern marketing is increasingly centered on data science, and if we accept that premise, CMOs will spend big on AI. The underlying neural networks are services now. It is the training model and ability to ingest massive amounts of data, which is generated by your systems but increasingly purchased from other vendors, that is the critical element in these initiatives. I am in a B2B market, so what I’m looking at are technologies that give me deep perspective on funnel and pipeline. I want to be able to look at my demand gen activities holistically but then down to increasing granular cohorts that I can gauge for the probability to close, or not.

This is important for me because this will give me insight into where I should be focused, which then guides strategy and tactics. Where existing analytics solutions come up short is that they start with a premise of “this is good, do more of it,” which leads to unnatural bias that gets increasingly narrow in scope, and then misses the opportunities that emerge that are outside of the static scoring models. Basically, I need a really intelligent system that is capable of generating human insights on data across a portfolio of groupings and metrics.”

Marketers nowadays employ a hybrid marketing strategy for their campaigns. Here the hybrid model will mean sticking to the core marketing tactics and methods while embracing and applying newer technologies. But as discussed before, Chief Marketing Officers’ abilities do not really match up to their ability to innovate. The survey is indicative though marketers want to change and be more matured and absorb innovation.

6. Customer Experience

The start-up culture is going full throttle. Newer companies that offer innovative, cutting-edge and problem-solving technical capabilities are being founded in multitudes. This has given rise to stringent competition and made it harder for businesses to better serve their existing customers and gain newer ones. From a customer standpoint, their expectation from a brand about how they want to be treated has skyrocketed.

Spending on Customer Experience (CX) has been picking up speed from the past several years. According to the survey concluded, it will see a good amount of CMO spend over the coming one and a half years. CMOs that were a part of the survey have declared that they will be spending 18% of their budget on Customer Experience.

7. Personalization

Personalization is an extension of existing enterprise efforts towards providing a maximum positive customer experience. CMOs are spending an average of 14.2 % of their budgets on personalization efforts. The interesting element here is that double-digit spends are common across industries. The spending is critically invested in gaining deeper insights into the accumulated customer data.

Richard Black, CMO at Aki Technologies, said,

“I think brand CMOs will continue to increase their spend on the media that actually works. These days, mobile is no longer a place to test; it’s where a brand has to be because consumers have their devices with them all day long. Eyeballs are always on mobile.

So, smart CMOs will look for tech that helps them optimize and maximize the impact of mobile dollars so they reach people when they are most receptive to marketing messages. AI developments will help there. And, of course, video can make mobile creative even more impactful. OTT is another area that I see spend increasing with better and better content coming through and more eyeballs heading that way.”

Considering GDPR, marketers need to be careful about not pushing too much in their efforts to obtain data. This might just completely drive away consumers. Marketers may have dollars and data but there is an atmosphere of uncertainty pertaining, where marketers must tread cautiously. Marketing leaders need to develop fool-proof strategies taking into account the current market and consumer complexities.

Clearly, 2019 seems to be the year for innovation and customer experience with statistics pointing at a maximum spending in these spheres. The survey also speaks of changing patterns of marketers towards their perspective on the whole marketing operations stream. Typically, to gauge marketing performance, businesses have a fixed set of KPIs that are crafted around ROI and customer satisfaction. However, marketers are adamant that they would want to design their campaigning around brand awareness.

Here is Andrea Lechner-Becker, CMO, LeadMD, with the parting note:

“I think they’ll spend on technology. But I wish they’d spend on headcount and training. Marketing teams, regardless of size, are missing core and important skill sets. We have not educated marketers well at the collegiate level in a decade. The pace of change in marketing is too fast to go to a conference or webinar here or there and maintain the ability to be “good” at your job.

Technologies I’m looking at… I’m obsessed with B2B data right now, or the lack of great data. I want someone to fix the buyer insights data problem for me.”