How marketing spend has been transformed forever

• Marketing spend declined rapidly during the pandemic as companies cut costs. It rose dramatically in 2022 and flattened in 2023.
• Companies are spending much less on customer relationship management and brand building. The very term CRM has become synonymous with software. As many members have built out their software suites and embedded marketing automation in the last few years, companies have moved toward maintaining their existing systems. Yet leading CRM providers are embedding AI tools in their suites, completely reframing how they’re used.
• Companies slashed social media from 16% of marketing spend to 11% last year. There is a clear mandate to measure return on marketing investment (ROMI).
• Overall marketing budgets are expected to grow around 5% this year, while the proportion spent on marketing technology is growing to 8%. Inflation is an arresting factor for marketing spend.
• Companies are spending more on marketing their ESG and sustainability efforts and leveraging marketing to support recruiting and employer branding.
• The shift to technology has created resource challenges, including integrating with other systems and difficulty staffing marketing departments. In my talks with Vistage members, I routinely ask about the number of employees within the average marketing department — most members have two marketers or fewer. Most Vistage marketers are generalists who need to surround themselves with vendors and outsourced resources. Internal marketers often lack the technical prowess to manage AI.
• While marketing metrics are dominated by calculations about activities (such as clicks) and conversion, most companies do not measure high-level metrics such as customer lifetime value or customer loyalty. Marketing can become robotic.
• CMO companies are outgrowing their markets by an average of 3.4%.
• Of companies outperforming their markets, the top reason is differentiating strategies (60%), and outpacing execution of strategy (49%). Of companies underperforming against their markets, the top reason is underfunded marketing.

Top customer priorities

Source: The CMO Survey

• Ensure your strategic plan identifies differentiating strategies. Even a marginal execution of the right plan has a deeper impact than a great execution of the wrong plan.
• Use the 2024-2025 strategic planning cycle as an opportunity to cast a vision for digital transformation. You can learn more by downloading our white paper, AI Step by Step.
• Establish a marketing plan with a supporting budget that fully embraces MarTech tools and AI-as-a-service subscriptions such as Synthesia, Seamless.AI and Frase (see a complete list in AI Step by Step).
• Align marketing technology investment to your corporate strategy. While lead generation is a priority for some companies, customer retention may be a priority for others.
• Frame the purpose of marketing to include a high-level evaluation of what markets to participate in, their market size, and delivering a unique value proposition in each of those markets.
• Aim higher for marketing metrics. Marketers should measure not only the impact of social media and conversion activities but also track strategic customer lifetime value and customer loyalty.
• Build a tech-enabled marketing team. If you have a small team, be purposeful in rationalising every marketing vendor and expense. You may need to reskill your marketing department to be more technical. When asked to rank their effectiveness as a team, marketers self-report hiring the right staff as their No. 1 challenge.
• Build products, services and tools that are configurable to customers. Much of marketing today is about creating personalised offers and activations that resonate with a very specific audience.
• For any segment you specialise in, ensure you have targeted content, including dedicated landing pages, white papers, case studies and testimonials for that segment.
• Do not post on social media for the sake of posting. It’s more important to measure engagement levels than simply the number of clicks and likes. Embed calls to action in everything you do.

This article first appeared in the Vistage Research Centre.