By Our Staff
In a global research involving over 600 Chief Marketing Officers (CMOs) and senior marketing decision-makers, GfK, the market research company, has examined their perceptions of the success factors that drive effective marketing in their respective companies. These factors are categorised into three pillars: “Impact,” “Alignment,” and “Investment.”
The survey responses form the basis for GfK’s new ‘CMO Outlook Index’, which shows that most senior marketing leaders feel there is significant potential for improvement in their organisation. It also identifies what CMOs can do to achieve marketing excellence. The CMO Outlook Index will be tracked continuously, with the full report providing an even deeper analysis and recommendations being released in September.
The three central pillars of marketing effectiveness are: “Impact” (capability of team and demonstration of ROI), “Alignment” (leveraging the brand’s commercial value and purpose), and “Investment” (C-suite commitment to brand and marketing investment). GfK’s global study shows that there is still a lot of room for progress. While 40 percent of the senior marketers say they have all necessary resources in at least one of the areas, only seven percent say they feel optimally equipped across all three of the pillars.
Said Gonzalo Garcia Villanueva, Chief Marketing Officer at GfK: “It is relatively common for CMOs to have optimized either their marketing team’s ability or their company’s brand alignment or its brand investment. The huge drop-off comes when we look at who feels optimally positioned across all three areas. The findings from our CMO Outlook Index help marketing leaders to understand how their peers perceive marketing and where growth is needed.”
Companies where marketing leaders see strong “Alignment” have more responsibilities assigned to marketing teams
The “Alignment” pillar relates to leveraging the brand’s commercial value and purpose: A quarter of all marketing decision-makers in the survey very strongly agree that their company has a clearly defined mission and purpose beyond commercial goals, and also that the brand contributes to the company’s commercial success. In companies where the marketing leader feels they have a strong brand purpose, marketing typically has more influence: 81 percent of the marketing leaders in such companies include product development as a responsibility of Marketing (compared to 69 percent average for all respondents), and 78 percent say the same for pricing (compared to 67 percent average).
Budgeting for success: 60 percent of decision-makers in the survey prioritise long-term brand building in marketing allocations
For the “Investment” pillar, GfK looked at the balance between long-term brand building and short-term sales growth, as well as the backing of CEOs and CFOs for investing in long-term brand strategies. 19 percent of marketing leaders in the survey consider themselves to be optimally positioned in both categories. Within this group, 60 percent say they spend at least 7 in 10 of their marketing dollars on long-term brand building, compared to 52 percent of all respondents. This level of long-term investment seems high but likely captures the budget beyond immediate media and production costs.
20 percent of the decision-makers believe they are ideally positioned regarding “Impact”: They have a strong team with all necessary skills and a good understanding of which activities, channels, and marketing levers deliver the best ROI. Of these, 59 percent are extremely confident that their data, analytics, and insights systems will be able to answer the critical business questions of the future. This contrasts sharply with only 28 percent of the full set of respondents being able to make the same claim. “Impact” leaders are more likely than average to say they have mature capabilities in areas like customer segmentation, campaign optimization, and extracting insights from data.
Marketing Index rating overview by country: As expected, there are regional differences in outlook. The Americas exhibit a more positive perspective on marketing as a whole, closely followed by India, whereas Europe and the rest of the world have a more pessimistic view. All can agree that marketing investment makes sense – just what to invest, where, and when are key. For instance, In India, 30% of those surveyed expressed their commitment to investing in the brand, both in the short and long term.
Index rating reveals critical differences by revenue and industry: The overall CMO Outlook Index is an average across all three pillars and takes the marketing frontrunners for each pillar into account: those who agree very strongly with the defining categories per pillar and who therefore feel most confident. This overall Index score currently stands at 21.
Looking more closely at company sizes, the index shows that marketers in companies with high annual revenues also consider themselves best positioned in terms of the success factors needed for effective marketing. For example, the overall index for marketing leaders in companies with annual revenues of less than 500 million US dollars is 12, compared to 28 for those in companies with annual revenue of more than 1 billion US dollars.
Interesting differences can also be observed across different industries: Utilities, Telecommunications, and Logistics companies have the lowest CMO Outlook Index score, standing at 17, while Technology and Durables as well as Financial and Professional Services companies have the highest score, each standing at 24. These even outrank typically strong industries like FMCG, Fashion & Lifestyle (index of 19), whose overall score is brought down by a low rating within marketing “Alignment”.
It was meant to provoke a reply that would rest on marketing philosophy, which we got. Without further ado, here’s Dr Bhaskar Das in the July 11 edition of Das ka Dum. Read on…