June 22, 2022
Financial services firms are some of the biggest spenders on marketing and MarTech. With so much riding on digital marketing, they better be spending wisely and getting great returns on marketing investments. Are they?
The financial services industry, in particular, has felt the crushing weight of customers, both B2B and B2C, flooding digital channels and demanding better digital engagement. From digital payments to mobile wallets to fintech newcomers, every financial services company must embrace a digital-first mindset today, if they haven’t already.
“Emerging capabilities including telematics, artificial intelligence, machine learning, and automation have transformed nearly every aspect of the insurance value chain and continue to create new and improved omnichannel experiences for customers,” says McKinsey & Company.
Related: Get ahead in digital spend! Check out the CMO Council-KPMG report Smart Spending At Speed
This is why financial services firms are pouring resources into marketing. Average marketing spending across industries has increased to 9.5% of overall company revenue this year, Gartner says. Financial services firms lead the way with the highest marketing budget at 10.4% of company revenue, up from 7.4% in 2021.
“Prioritizing the proper mix of resources should be a mission critical priority for CMOs in order to attract and retain the capabilities they need to deliver against their CEO’s goals, such as focusing on brand and customers,” says Ewan Mcintyre, chief of research and vice president analyst in the Gartner for Marketing Leaders practice.
In financial services, MarTech is a big part of this spend as companies shift to meet the burgeoning digital demands of today’s customers. Across all industries, digital accounts for 56% of marketing spend, according to Gartner.
The pendulum has shifted from digital-only to hybrid engagements — a blending of physical and digital channels. B2B buyers in financial services use around 10 channels, including online and digital, as part of any given purchase, McKinsey says. This is double the number of channels five years ago and up from seven channels only two years ago.
There’s no question CMOs in financial services are under pressure to get the most bang for the buck in digital and omnichannel marketing. A new CMO Council-KPMG report, Smart Spending at Speed, takes a close look at how marketing leaders, including those in financial services, can be better spenders.
The report’s key finding is that CMOs who more actively involve procurement pros in marketing sourcing enjoy a more positive impact on the overall maturing and quality of marketing sourcing decisions. Further, the top marketing sourcing area that involves procurement is MarTech.
Here’s the kicker: 87% of marketing leaders at financial services firms who are in “very effective” working relationships with procurement tend to involve digital/e-commerce functional groups in marketing sourcing decisions. This points to a greater maturity in digital.
Problem is, only one out of three financial services CMOs actively partner with procurement in the identification, selection and negotiation of marketing vendors. This represents a sizable opportunity for marketing to tap into procurement services, craft a well-rounded marketing sourcing process, and make smarter marketing sourcing decisions.
How to begin? Check out the Smart Spending At Speed report and learn best practices for driving better marketing sourcing decisions. Get ahead in digital spend!
Tom Kaneshige is the Chief Content Officer at the CMO Council. He creates all forms of digital thought leadership content that helps growth and revenue officers, line of business leaders, and chief marketers succeed in their rapidly evolving roles. You can reach him at firstname.lastname@example.org.
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