Christine Moorman is a Duke University professor and director of The CMO Survey, which tracks sentiments of top marketers in the United States. The results are released in biannual reports that capture the field’s shifting dynamics. She shared insight into the changes that her research has documented, the rise of social media and areas where marketers should be investing.
Buzz: The CMO Survey began in 2008. What are the biggest shifts that you've seen since you began collecting data, particularly in the b-to-b space?
Christine Moorman: It has been interesting to observe the attention that companies are giving to social media and marketing analytics over the last five years. Spending levels have increased substantially.
Focusing just on social media spend, CMOs noted they are spending 8.4% of their marketing budgets on it. Over the next year, that number is expected to increase to 11.5%, and in the next five years it will reach 21.6%.
B-to-b product companies report the lowest levels of social media spend. I expect b-to-c product companies to always be ahead on this type of spending but b-to-b sectors are catching up. Companies realize they can provide a great deal of information to customers about their businesses through the web. This reduces costs and works in a complementary fashion with sales and other marketing efforts.
Buzz:You found a social media integration gap. What are you seeing there, and how can marketers better approach the channel?
Moorman: I asked CMOs to rate “How effectively is social media integrated with your firm’s marketing strategy” on a seven point scale, where 7 is “very integrated” and 1 is “not at all integrated.” Results from The CMO Survey indicate an average score of 3.8 with a standard deviation of 1.9.
This means that although companies expect to double social media spend in the next five years, they have not yet figured out how to integrate social media with the rest of the firm’s social media spending. To close this gap, companies need to think about how social media should play a role in customer management, brand management, sales management and innovation management—the most important areas where marketing can contribute to the company. Structurally, I recommend that companies do the following:
Do not confine social media to its own separate department or in the IT function. Put it in marketing or another key customer-facing group.
Assign social media personnel to key strategic teams doing cross-functional work, such as new product or new service development, new market development and customer acquisition.
Do not outsource social media completely to a strategic partner. Outside agencies may have expertise, but you also need a dedicated social media liaison inside.
Put in place a system of accountability that demonstrates the effect of social media on valued intermediate outcomes (e.g., buzz) and financial performance outcomes (e.g., revenues). The choice of metrics should be influenced by whether social media is doing a push or pull job for your company.
Buzz: Marketers are spending more on analytics. How well are they leveraging those investments?
Moorman: I asked top marketers to report what percentage of their marketing budgets they spend on marketing analytics. Results indicate that companies currently spend an average of 6% of their marketing budgets on marketing analytics. This number is expected to grow to 10% in the next three years. This represents a sizable shift.
For analytics, we have what I’ll call a utilization gap, which reflects the fact that companies are using analytics that they have requested or have available only 30% of the time. This number decreased from 37% just a year ago. It is not surprising, therefore, that CMOs report that the contribution of marketing analytics to company performance is low.
One of the reasons for this utilization gap is that companies do not evaluate the quality of their marketing analytics. Only 40% of companies do so as reported by the CMOs in the survey.