The Cmo Survey Highlights And Insights, February 2010

Highlights and InsightsFebruary 2010

© Christine Moorman

About The CMO Survey

Mission

- The CMO Survey collects and disseminates the opinions of top marketers in order to

predict the future of markets, track marketing excellence, and improve the value of

marketing in firms and society.

Survey Operation

- Founded in August 2008, The CMO Survey is administered twice a year via an Internet

survey. Questions repeat over time so trends can be discerned.

- This is the 4th administration.

Sponsoring Organizations

Lead ResearcherProfessor Christine Moorman

T. Austin Finch, Sr. Professor of Business Administration

2© Christine Moorman

Survey Methodology

• Survey Sample

- 4,336 Top Marketers at Fortune 1000, Forbes Top 200, CMO Club companies, and

Top Marketers who are AMA Members or Duke University Alumni and Friends

- 612 responded for a 14.1 % response rate

- 81.1% of respondents hold a rank of VP, CMO, or higher

• Survey Administration

- Email contact with three follow-up reminders

- Survey in field from January 13-27, 2010

• Results Interpretation

- M = sample mean; SD = sample standard deviation

- B2B = Business-to-Business firms; B2C = Business-to-Consumer firms


Topic 1: Marketplace Dynamics 5-9

Topic 2: Firm Growth Strategies 10-12

Topic 3: Marketing Spending 13-16

Topic 4: Marketing Performance 17-19

Topic 5: Marketing Excellence 20-21

Topic 6: Marketing Organization and Leadership 22-25

Topic 7: Marketing and Social Media 26-28

Topic 8: Marketing Jobs 29-33

What’s on Marketers’ Minds? 34-35

Overview of Results


5

Topic 1:

Marketplace Dynamics

5

Marketer optimism about overall

economy continues upward trend

Figure 1.1. How optimistic are you about the overall U.S.

economy on a 0-100 scale with 0 being the least

optimistic and 100 the most optimistic?


Figure 1.2. Are you more or less optimistic about the

overall U.S. economy compared to last quarter?

JobsSocial MediaOrganizationExcellencePerformanceSpendingGrowthMarketplace

50.7

32

17.3

15

26

59

9

28.9

62.1

0 10 20 30 40 50 60 70

Less Optimistic

No Change

More Optimistic

Percentage of Respondents (%)

February 2010 August 2009 February 2009

57.7856.45

47.69

0

10

20

30

40

50

60

70


… but now it’s personal


Figure 1.3. Are you more or less optimistic about your

own company compared to last quarter?

40

28.9

31

20.4

31.4

48.2

10.6

25.6

63.9

0 10 20 30 40 50 60 70

Less optimistic

No change

More optimistic

Percentage of Respondents (%)



Marketer optimism about the overall economy

and optimism about firms are now on par--62.1%

for economy and 63.9% for companies.

Compared to August 2009, when Marketer

optimism about the overall economy ticked up to

59%, but optimism about their own companies

remained at 48.2%.

Marketers expect their firms to participate in the

anticipated recovery.

7

Customer activity expected to soar on

key revenue metrics


66

26

54

4745

48

17

44

39

35

30

14

32

37

27

0

10

20

30

40

50

60

70

Increased customer purchase volume

Increased customer price per unit

Customer will buy more related products and

services from my firm

My firm's ability to retain current

customers has increased

Increased entry of new customers into

the market

Per

cen

tag

e o

f R

esp

on

den

ts (

%)



Major uptick in expected customer

purchase volume, price per unit,

purchase of related products and

services, customer retention, and

entry of new customers into market.

Figure 1.4. Customers Improve on all Revenue Metrics

Channel partners rebound as well



August 2009 showed partners not performing

well. February 2010 indicates they are waking

up.

More companies will go directly to customer

(from 24% to 30%). This is reflected in internet

spending discussed in Section 3.

Figure 1.5. Channel Partners Improve on Revenue Metrics

52

19

40

30

36

14

24 2425

10

19

26

0

10

20

30

40

50

60

Increased partner purchase volume

Increased partner price per unit

Partner will buy more related products and services from my firm

My firm will deal directly with end

customer more, not through channel

Per

cen

tag

e o

f R

esp

on

den

ts (

%)


10

Topic 2:

Firm Growth Strategies

10

Growth through diversification

Table 2.1. Growth Spending in Next 12 Months*

Current

Products/

Services

New

Products/

Services

Current Markets

Market Penetration

Strategy

Product/Service Development

Strategy

New Markets

Market Development

Strategy

DiversificationStrategy

* % of spending across growth strategies


Types of Growth Strategies

Sector differences: B2B-Product firms expect the biggest reduction in market penetration (from 44% to 39%) and the biggest

increase in diversification (from 10.8% to 15%)

Strategy Feb-2009 Aug-2009 Feb-2010

Market

Penetration

Strategy48% 46% 44%

Market

Development

Strategy18% 18% 18%

Product/Service

Development

Strategy

24% 26% 26%

Diversification

Strategy 10% 10% 13%


Growth via partnerships and

acquisitions continues to increase

Table 2.2. How Firms Will Grow in the Next 12 Months*


Strategy Feb-2009 Aug-2009 Feb-2010

Growth from your

firm internally70.9% 70.3% 69.5%

Growth from

acquisitions8.8% 9.7% 10.4%

Growth from

partnerships13.3% 13.4% 14.7%

Growth from

licensing7.0% 6.6% 5.4%

* Percentage of spending across growth strategies


Organic growth continues to dominate growth

strategies.

Small decrease in internal growth met by small

increases in acquisitions and partnerships.

13

Topic 3:

Marketing Spending

13

Marketing Spending Up

Figure 3.1. % Change in Marketing Spending in Next 12 Months


* Question not asked in February 2009


Overall marketing budgets are expected to rise

by 5.9% -- the largest expected increase in a

year: Aug-09 (1.1%) and Feb-09 (0.5%)

Internet marketing expenditures account for the

largest increase: 12.2%

Traditional advertising spending change remains

negative (-2.5%), but smaller losses than in Aug-

09 (-7.9%) and Feb-09 (-7.3%).

Investments in key marketing assets rise:

- Brand building (from 1.8% in Feb-09, 4.5% in

Aug-09 to 6.9% in Feb-10).

- CRM (from 6.4% in Aug-09 to 9.9% in Feb-10). -10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Feb-09 Aug-09 Feb-10

Overall marketing spending

Traditional advertising spending

Internet marketing spending

New product introductions

New service introductions*

Customer relationship management*

Brand building

Sector Differences:

• Brand building: B2B-Service firms (+11.8%) vs. (+4.3%) average across sectors

• Customer relationship management: B2B-Service firms (+13.6%) vs. (+7.5%) average across other sectors

• New service introductions: B2B-Service (+10.4%) vs. (+5.3%) average across other sectors

• New product introductions: B2B firm (+11.25%) vs. B2C firms (+4.7%)

Marketing spending priorities vary

across sectors

Figure 3.2. % Change in Marketing Spending by Sector in Next

12 months


-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%


B2B - Product

B2B - Services

B2C - Product

B2C - Services


Spending on marketing knowledge and

services rebounds

Figure 3.3. Firm Spending Increase on Marketing Knowledge

in Next 12 Months


-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%


Marketing research and intelligence

Marketing consulting services

Developing knowledge about how to do marketing

Integrating what we know about marketing

Marketing (non-sales) hires

Marketing training


Marketing consulting services had been negative

(Feb-09) or very small (Aug-09). A 2.9% increase

may signal revitalization of the industry.

- Biggest increase from B2B-Services (+4.5%)

Increases in research and intelligence (+7.3%) likely

indicate firms are investing to search for growth

opportunities.

- Biggest increase from B2B-Services (+10.6%)

Emphasis remains on developing knowledge about

how to do marketing (+6.4%) and integrating what we

know about marketing (+7.4%)

17

Topic 4:

Marketing Performance

17

Firm performance metrics mixed;

goals up!

Table 4.1. Firm Performance on Financial Metrics

Actual firm performance Feb-2009

Actual firm performance Aug-2009

Actual firm performance Feb-2010

Goal in the next 12 months

Firm sales* -0.6% - 0.1% 6.1%

Market share 3.0% 2.2% 1.6% 4.7%

Marketing return on investment 2.6% 1.9% 1.9% 5.2%

Firm profits 1.6% 0.5% 0.6% 6.0%

Customer acquisition 3.3% 2.6% 2.1% 5.3%

Customer retention 2.3% 1.4% 1.7% 4.7%

Brand value 3.7% 3.2% 2.6% 5.7%


* Question not asked in February 2009


Marketers focus on “going green”

remains moderate and unchanged

* 5-point scale where 1 is poor and 5 is excellent



Figure 4.1. Firm Performance on Social Metrics

3 33.1 3.13.23

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Marketing that is beneficial for society

Marketing that minimizes the impact on the ecological environment

Mean Values*


20

Topic 5:

Marketing Excellence

20

Peers nominate firms for marketing

excellence across sectors, industries

Honorable MentionsWinners of The CMO Survey Award for Marketing

Excellence, February 2010



22

Topic 6:

Marketing Organization and

Leadership

22

Marketing and sales share customers in

most companies


Figure 6.1. The Marketing-Sales Relationship


70

11.49.7

74

13.1

8.3

69

11 12

0

10

20

30

40

50

60

70

80

Sales and marketing work on an equal basis

Marketing is within the sales function

Sales is within the marketing function

Per

cen

tag

e o

f R

esp

on

den

ts (

%)


Marketing leaders retained through

economic crisis


Figure 6.2. Marketing Leader Retention


4.5

8.6

4.3

8

4.4

8.3

0

1

2

3

4

5

6

7

8

9

10

Top marketer time in current role in the firm

Top marketer time in any role in the firm

Yea

rs


Top marketers continue to beat oft-cited 231 and

281 month survival averages.

Given length of time in firms (~8.6 years),

marketing leaders appear to be appointed from

within.

1. http://content.spencerstuart.com/sswebsite/pdf/lib/CMO_brochureU1.pdf

2. http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090130/FREE/901309991/1078

http://content.spencerstuart.com/sswebsite/pdf/lib/CMO_brochureU1.pdf

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090130/FREE/901309991/1078

Investments in building strategy

from the outside-in rebounds

Figure 6.3. Firm Market Orientation* and Strategy


Firms invest more in learning about markets and in using market information to drive strategy

*Rate the extent to which your firm engages in the following market-oriented behaviors. Information about customers and competitors….

** 7-point scale where 1 is not at all and 7 is very frequently


5.2

4.7

4.6

4.8

4.9 4.9

5

4.5

4.6 4.6

4.7

4.6

4

4.2

4.4

4.6

4.8

5

5.2

5.4

Is collected on a regular basis

Is shared vertically across different levels of the firm

and business units

Is shared horizontally across different functions

and business units

Shapes the design of firm strategies

Influences the implementation of firm

strategies

Impacts the evaluation of firm strategies

February 2010 August 2009

Mean

Value**

2626

Topic 7:

Marketing and Social Media

26

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Social media spending continues to

accelerate


Figure 7.1. Social Media Spending Over Time


Fast-growing spending exceeds August 2009

levels.

Within 1 year, social media is expected to be 10%

of all marketing budgets and nearly 18% in 5

years.

5.6

9.9

17.7

3.5

6.1

13.7

0

2

4

6

8

10

12

14

16

18

20

Current marketing budget spending on

social media

Marketing budget spending on social

media in the next 12 months

Marketing budget spending on social

media in the next five years

Per

cen

tag

e o

f To

tal B

ud

get

(%

)

February 2010 August 2009

Social media spending sector

differences


Aug-2009 Feb-2010

Current

Social Media

Spending

B2B - Product 2.5% 3.4%

B2B - Services 3.9% 6.5%

B2C - Product 5.3% 6.7%

B2C - Services 2.9% 6.9%

Overall 3.5% 5.6%

Social Media

Spending in

the next 12

months

B2B - Product 4.5% 7.4%

B2B - Services 6.5% 11.0%

B2C - Product 7.5% 11.6%

B2C - Services 8.8% 10.7%

Overall 6.1% 9.9%

Social Media

Spending in

the next 5

years

B2B - Product 12.6% 15.3%

B2B - Services 13.5% 18.9%

B2C - Product 15.0% 18.9%

B2C - Services 15.4% 18.5%

Overall 13.7% 17.7%

Table 7.2. Sector Differences in % Change in Social Media Spending Biggest increase in current social media spending

among B2C-Services companies (from 2.9% to

6.9%).

Largest increase in next year to come from B2B-

Service companies (from 6.5% to 11%).

Within 5 years, industries generally on par with

social media spending.


29

Topic 8: Marketing Jobs

29

Marketing hires to increase; marketing

layoffs stop

Figure 8.1. Absolute number of marketing people hired


Compared to the number of marketing hires last

year, by what percentage will your firm’s

marketing hires change:

- In the next 6 months: +8.2%

- In the next year: +12.9%

- In the next two years: +24.1%


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Next 6 months

Next 12 months

Next 2 years

Per

cen

tag

e o

f C

om

pan

ies

Res

po

nd

ing

(%

)

We will not let go of more marketing people

We will make no marketing hires

We will make marketing hires

It’s a buyer’s market for marketing job

seekers

Figure 8.2. Types of marketing hires firms will emphasize*


*Allocate 100 points across the types of marketing hires your firm will emphasize

Companies to emphasize hiring in the open

market (46%) and luring talent from competitors

(24%).

Experience emphasized as only 27.1% of hires

expected to come from universities.


46.2

24

15

11.5

2.60.6

0

5

10

15

20

25

30

35

40

45

50

Hire in the open market

Lure from other firms

New undergrads

New masters (MS or MBA)

Hire back people we laid

off

New Ph.D.

Per

cen

tag

e (%

)

Marketing skills emphasize

management of new media and growth

Figure 8.3. Top three skill sets prioritized in marketing hires

54

46.3 45.2 44.5

28.8 27.8

19.918.1

8.96.4

0

10

20

30

40

50

60

Per

cen

tag

e (%

)


Internet marketing tops the list of skills sought

in marketing hires. This priority is also

reflected in spending on internet marketing—

which showed the largest increase in

marketing spending.

Improving management of top line through

innovation and growth skills is second.

Skills related to managing the firm’s key

marketing assets (customer and brand) also

important.

Traditional marketing skills, such as

marketing research, advertising, distribution,

and pricing de-emphasized.


The outsourcing of marketing will

continue to accelerate

72% of all companies outsource some aspect of

marketing.

Half of all companies will not change marketing

outsourcing in the next year.

41% of companies will increase outsourcing.

- Future surveys will explore outsourcing in

more detail. However, given spending on

internet marketing and new growth and focus

on these skills in hiring, we expect that some

of these marketing activities are currently

being outsourced.

Figure 8.4. How marketing outsourcing is expected to change in

the next year



3%

6%

2%

48%

12%

17%

12%

0%

10%

20%

30%

40%

50%

60%

10% decrease

5-9% decrease

1-4% decrease

No change

1-4% increase

5-9% increase

10%+ increase

34

What’s on Marketers’ Minds?

34

When asked what question they

would like to ask other CMOs, ROI

concerns dominated


Look to the

August 2010

survey for a

bonus section

on Marketing

ROI

Key Question: Marketing and ROI

• What marketing activities and strategies improve

ROI?

• What metrics are used for ROI? How do these

vary by industry?

• What metrics are used to measure ROI for social

media?

• How do you measure ROI on customer insights?

• What ROI metrics are top management most

focused on in your firm?

Next Steps

36

Future surveys- The CMO Survey will be administered again in August 2010.

To get involved- If you are not a current participant, sign up at

http://faculty.fuqua.duke.edu/cmosurvey/participate/

Media- Media follow ups related to this data will be posted to

http://faculty.fuqua.duke.edu/cmosurvey/media/

Feedback- Send your thoughts to me at [email protected]


http://faculty.fuqua.duke.edu/cmosurvey/participate/

http://faculty.fuqua.duke.edu/cmosurvey/media/

mailto:[email protected]