CMO Council ’07 Outlook Report
Challenged To Change, Senior Marketers Seek To Refocus, Reskill And Realign Their Organizations. CMO Council ’07 Outlook Report Reveals Widespread Restructuring, Agency Turnover, Talent Deficiencies, Upward Spend Trend and a Metrics Mindset
Palo Alto, CA, March 12, 2007 --(PR.com)-- Challenged as never before to instill new disciplines, skills and focus in their organizations, top marketing executives responded aggressively in 2006 by shaking up internal departments, jettisoning underperforming agencies, and bringing new metrics and measurability to programs and initiatives. The climate of change continues in 2007 as executives make further changes to upgrade organizational effectiveness, strengthen customer engagement, and achieve even greater measurability. Most marketers say they will have larger budgets in 2007 to accomplish these goals.
Those are among the findings of the 2007 Outlook Survey conducted by the CMO Council, a peer networking and thought leadership organization of more than 3,000 top marketing executives worldwide. The survey demonstrates clearly that marketing is undergoing substantial changes due to a mandate for chief marketing officers (CMOs) to improve the relevance, accountability and performance of their organizations.
Among specific study findings:
o 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 percent of respondents and 76 percent of those from companies with revenues above $500 million.
o The restructuring went beyond internal resources, as agency turnover was rampant. 64 percent 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 ax most often, followed by web design & development and advertising agencies.
o There’s more money for marketing this year. 65 percent say their budgets increased in 2007, with 20 percent experiencing no change and 15 percent losing budget. 14 percent said their budgets will grow more than 20 percent.
o 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 percent), distribution & channels (37 percent), pricing (37 percent) and product management (30 percent).
“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 of 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 organizations and function. We think this is a positive development, but also believe most marketers are only in the early stages of redefining their roles.”
Realignment of marketing organizations will continue in 2007. Almost half (48 percent) of respondents (75 percent from large companies) said they will review and evaluate all resources in 2007, and 60 percent said they will add new competencies and capabilities. Only 10 percent (20 percent from large companies) expect to reduce headcount.
The number one challenge will be to quantify and measure the value of marketing programs 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 clearly in the systems and solutions in which top marketers will invest in 2007. Seventy-five percent of respondents from companies with revenues of more than $500 million plan to deploy a marketing performance measurement dashboard this year, almost twice the number who will invest in the next highest category of system deployment, which is lead generation and qualification. Marketers from smaller companies said lead generation and qualification and email campaign management would be their two top areas of system or service deployment.
About the CMO Council
The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers across a wide-range of global industries. The CMO Council's 3,000 members control more than $70 billion in aggregated annual marketing expenditures. Companies represented on the CMO Council have combined annual revenue of over $600 billion. Visit the CMO Council web site to find out about the initiatives geared to address executive marketers' challenges at http://www.cmocouncil.org.
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Those are among the findings of the 2007 Outlook Survey conducted by the CMO Council, a peer networking and thought leadership organization of more than 3,000 top marketing executives worldwide. The survey demonstrates clearly that marketing is undergoing substantial changes due to a mandate for chief marketing officers (CMOs) to improve the relevance, accountability and performance of their organizations.
Among specific study findings:
o 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 percent of respondents and 76 percent of those from companies with revenues above $500 million.
o The restructuring went beyond internal resources, as agency turnover was rampant. 64 percent 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 ax most often, followed by web design & development and advertising agencies.
o There’s more money for marketing this year. 65 percent say their budgets increased in 2007, with 20 percent experiencing no change and 15 percent losing budget. 14 percent said their budgets will grow more than 20 percent.
o 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 percent), distribution & channels (37 percent), pricing (37 percent) and product management (30 percent).
“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 of 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 organizations and function. We think this is a positive development, but also believe most marketers are only in the early stages of redefining their roles.”
Realignment of marketing organizations will continue in 2007. Almost half (48 percent) of respondents (75 percent from large companies) said they will review and evaluate all resources in 2007, and 60 percent said they will add new competencies and capabilities. Only 10 percent (20 percent from large companies) expect to reduce headcount.
The number one challenge will be to quantify and measure the value of marketing programs 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 clearly in the systems and solutions in which top marketers will invest in 2007. Seventy-five percent of respondents from companies with revenues of more than $500 million plan to deploy a marketing performance measurement dashboard this year, almost twice the number who will invest in the next highest category of system deployment, which is lead generation and qualification. Marketers from smaller companies said lead generation and qualification and email campaign management would be their two top areas of system or service deployment.
About the CMO Council
The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers across a wide-range of global industries. The CMO Council's 3,000 members control more than $70 billion in aggregated annual marketing expenditures. Companies represented on the CMO Council have combined annual revenue of over $600 billion. Visit the CMO Council web site to find out about the initiatives geared to address executive marketers' challenges at http://www.cmocouncil.org.
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CMO Council
Matt Farrell
646-652-5204
www.cmocouncil.org
Matt Farrell
646-652-5204
www.cmocouncil.org
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