In a survey of more than 800 marketers at large companies, 33.1% say they expect marketing budgets to increase by up to 5%. And almost 10% say their budgets will grow between 6 and 10%. About 37.6% of respondents say annual budgets will not change in 2008.
Improved accountability for marketing spending is still high on their radar, with 53% saying that a better system for measuring marketing ROI is a top challenge for the year ahead. Still, 79% believe marketing is "making significant or reasonable progress in improving the perceived value of the function." But 21% say they are either still trying to gain traction or are stalled and losing credibility in their organizations.
Respondents say they plan to spend the most in six key areas: Email campaign management, customer relationship management, marketing performance measurement dashboards, customer intelligence and solutions, search engine marketing, and sales and marketing integration tools.
And the trend of ditching under-performing ad agencies is likely to continue. An impressive 41% of respondents say they dumped their ad agencies in 2007, 38% changed Web design firms, and 26% hired new public-relations firms. The most common reasons given for switching include "lack of innovation" and "no value-added thinking," as well as lousy creative.
Of course, it's possible that when it comes to budget cuts, the CMO will be one of the last to know. The Conference Board just reported that its "Measure of CEO Confidence" has fallen to a seven-year low, with the majority of business leaders now predicting lackluster economic conditions to prevail throughout the first half of 2008. Currently, only 16% of business leaders expect economic conditions to improve in the next six months--down from 20% last quarter.