Spending on marketing analytics -- the creation and use of quantitative data about customer behavior and other marketplace activity -- is expected to leap from 4.6 percent to almost 22 percent of marketing budgets in the next three years.
But marketers say barely a third of available data is used because managers lack the tools to measure the success of analytics and people who can link the data to marketing practice.
These are among the latest findings from The CMO Survey. Conducted biannually since August 2008, and sponsored by the American Marketing Association, Deloitte and Duke University's Fuqua School of Business, it is the longest-running survey dedicated to understanding the field of marketing. The latest edition, conducted from January 19 - February 3, received responses from 388 top marketing executives.
"Marketers cited a number of factors that prevent them from using analytics," said Christine Moorman, a Fuqua professor and director of The CMO Survey. "Some said the data doesn't arrive when they need it, or that it's too complex. Other factors were a lack of insight or relevancy."
Company performance indicators were all improved over 2016 and marketers report strong and positive forecasts about key customer and partner behaviors, including purchase levels and willingness to pay. Marketers are spending against this outlook.
As approximately 11.1 percent of overall firm budgets, marketing spend is an important factor in firm performance. Marketing budgets grew by 7.3 percent since February 2016 and are expected to increase 11 percent in the next year. For the first time in five years, spending on traditional advertising is also is expected to increase, by 0.6 percent. Spending on digital marketing is expected to increase by 14.6 percent over the next year.
Marketers also report they are spending more to acquire or develop marketing knowledge, including consulting, research and intelligence, and training. Investment in the development of new marketing capabilities is expected to grow from 3.1 percent in 2014 to 6.6 percent in 2017.
"Converting investments in social, mobile and analytics requires companies develop powerful marketing capabilities in each area," Moorman said. "Doing so will ensure that these investments are converted to bottom-line benefits."
Other findings include:
- Marketing hires are expected to increase by 3.7 percent in the next year, the lowest rate predicted since February 2015.
- Social media spending accounted for 10.5 percent of marketing budgets and is expected to grow to 18.5 percent within five years.
For more analysis of the results, including business-to-business and business-to-consumer breakdowns, visit cmosurvey.org.