CMOs Look To Web For Improved ROI

  • by February 26, 2009
Spending on marketing will grow just half a percentage point over the next 12 months, with traditional ad spend decreasing 7% and Internet growing 10%, according to The CMO Survey, a poll of 581 top U.S. marketing executives taken this month.

Business-to-consumer marketers expect to make the most significant shifts to the Internet, for both product and service advertising, the survey found.

Prof. Christine Moorman of Duke University's Fuqua School of Business, who conducts the study in conjunction with the American Marketing Association, says that while the continued move to the Internet is due partly to the medium's ability to reach consumers, it also reflects a hope for improved ROI by using less expensive--yet effective--tools.

Companies also plan to increase marketing efforts that highlight their social responsibility and what they are doing to minimize environmental impact, the study found. The CMOs' intent to pursue both categories showed a large jump from the first CMO Survey six months ago, Moorman noted, and there's also been a significant shift in reasons for such marketing--what once was just good publicity has now become key to earning consumer trust.



And such trust means increased business. "Customers are saying, 'Do I trust this company? Do I want to have a relationship with them, and give them my money?'," Moorman told Marketing Daily.

One company that consumers seem to trust is Apple, which CMOs have again cited as the best example of marketing excellence. Echoing an Epsilon survey of 180 CMOs last fall, the new CMO Survey respondents voted the same three companies--Apple, Procter & Gamble and Coca-Cola--for "Excellence in Marketing," with Apple again leading the other two by a significant margin.

"They really know how to make products that people love," says Moorman, and have become "a design leader in a category that doesn't have much design."

"Clearly, the results of the study show there will be an increased emphasis on product innovation," Moorman continued. With marketers reporting that new product and service introductions will increase 10% in the next 12 months, she says, expect them to also start pushing product products out to new markets--whether geographic or demographic. The latter, she noted, is being made easier by the Internet, including the increasing propensity for consumers "to identify themselves" through opt-ins, social networks or other online behavior.

Other survey results included:

  • 59% of marketers said they are less optimistic about the economy than in the previous quarter, down from 77% with that response in August.
  • Respondents reported their firms failed to reach marketing ROI and overall profit goals during the past year (falling short by 0.6% and 3%, respectively), but they expect increases in both categories during the next 12 months.
  • Respondents plan to spend 4.5% less on marketing consulting services over the next 12 months--and their hiring plans will remain flat for the near term.
  • Marketers still place a strong emphasis on customer insights, sharing marketing knowledge, and integrating existing marketing knowledge.
  • 30% of respondents believe that low price will be their customers' top priority over the next 12 months, with 20% citing trusting relationships and 19% superior product quality.
  • The marketers predict no increases in rivalry among competitors, but instead stronger cooperation on non-price strategies--a trend Moorman says may reflect a greater emphasis on open innovation among firms.

The twice-yearly survey plans to add European CMOs next year, and Asian CMOs in 2011.

Next story loading loading..