CMO survey identifies new marketing strategy trends

Challenged to instil new disciplines, skills and focus in their organisations, top marketing executives responded in 2006 by shaking up internal departments, jettisoning underperforming agencies, and bringing new metrics and measurability to marketing initiatives, according to research from the CMO Council.

And this climate of change continues in 2007 as marketing executives make further changes to upgrade organisational effectiveness, strengthen customer engagement, and achieve even greater measurability. According to the study, the majority marketing executives surveyed said they have larger budgets in 2007 to accomplish these goals.

Key findings
The 2007 Outlook Survey found that that marketing is undergoing substantial changes due to a mandate for chief marketing officers (CMOs) to improve the relevance, accountability and performance of their organisations. Among the study's key findings:

1. Alignment of marketing with sales and demand generation is a top priority. Restructuring to achieve this integration was by far the most frequently mentioned accomplishment of marketers in 2006, named by 46% of respondents and 76% of those from companies with revenues above US$500 million.
    
2. The restructuring went beyond internal resources, as agency turnover was rampant. 64% of marketers said they dumped at least one agency last year, and over half plan further agency changes in 2007. Public relations agencies got the axe most often, followed by web design & development and advertising agencies.
    
3. There's more money for marketing this year. 65% say their budgets increased in 2007, with 20% experiencing no change and 15% losing budget. 14% said their budgets will grow more than 20%.
    
4. Chief marketers expanded their sphere of authority. In addition to managing traditional functions like branding, web sites, advertising and public relations, large minorities also reported jurisdiction over business development (44%), distribution & channels (37%), pricing (37%) and product management (30%).

A new breed of CMO?
"The era of brand-centric marketing is giving way to a new breed of CMO focused on measurable performance and business results," said Donovan Neale-May, executive director for the CMO Council. "Our past studies show that CMOs face tremendous pressure from CEOs and corporate boards to make this transition, which is why the average tenure of a CMO currently is less than two years. In 2006, marketers responded to this clarion mandate with extensive restructuring of their organisations and function. We think this is a positive development, but also believe most marketers are only in the early stages of redefining their roles."

And the realignment of marketing organisations is set to continue throughout 2007. Almost half (48%) of respondents (75% from large companies) said they will review and evaluate all resources in 2007, and 60% said they will add new competencies and capabilities. Only 10% (20% from large companies) expect to reduce headcount.

The main challenges
Survey respondents said that the main marketing challenge is to "quantify and measure the value of marketing programmes and investments", followed by "improving efficiency and effectiveness", "growing customer knowledge and interactions", and "improving the ROI of expenditures".

The measurability mandate can be seen in the systems and solutions in which top marketers say they are investing in 2007. Seventy-five percent of respondents from companies with revenues of more than US$500 million said they plan to deploy a marketing performance measurement dashboard - almost twice the number who will invest in lead generation and qualification (the next highest category of system deployment). Marketers from smaller companies said lead generation and qualification and e-mail campaign management would be their two top areas of system or service deployment.