December 19, 2022
Annual budgeting and adaptive marketing spend is more complex and challenging than ever on a global level. The CMO Council polled its members in December to determine what most influences how they map, model, and make a business case for marketing spend in 2023. There were 113 respondents to one question posed in the weeklong LinkedIn poll.
The top pick of 90 respondents (80%) was “marketing impact on revenue.” Surprisingly, “economic forces and factors” was a distance second with 13 votes (11%), followed by “demand and supply chain insights” (8 respondents, 7%) and “prior annual budget requests, which garnered just two votes (2%).
Annual worldwide spending on marketing continues to increase and will reach $4.7 trillion by 2025, according to a Forrester report. This is an increase of $1.1 trillion from 2021 to 2025, a compound annual growth rate (CAGR) of 7% — substantially above the 5% CAGR from 2015 to 2019.
There are many deficiencies, inadequacies, complexities, and inefficiencies in the annual marketing planning, forecasting and mix modeling process. This time-consuming and distracting yearly exercise for senior marketers has become more challenging, demanding, and geographically distributed across the organization.
The annual, end-of-year marketing planning process is turning into a sustained, on-demand exercise to improve business agility and responsiveness to competitive challenges, market dynamics, and ever-changing sales support, business acquisition and customer engagement requirements across product lines, business divisions and geographic units globally. Critical to this is better decision support based on more timely access to insightful, reliable, accurate, and integrated customer data, transactional information and market intelligence.
With more than $1.5 trillion spent annually on marketing and communications worldwide, there are significant incentives for global enterprises to improve the way they allocate, optimize and justify spend. Functional marketing silos are being imploded and tightly connected for improved collaboration, integration, workflow and use of critical data using advanced marketing automation platforms.
Marketers are working more closely with internal business analysts, procurement staff and financial departments to increase the transparency, accountability, and impact of marketing through better planning, analytics, performance measurement, scorecards, spend simulation, and predictive modeling across all media types and channels.
Determining the optimal way to go to market has never been more challenging. A multitude of new digital media channels, social networks and online/mobile avenues of market access are fragmenting media buys. Channels of distribution and eCommerce are multiplying, requiring broader, more diverse and customized marketing support. Sophisticated consumer information gathering, and database marketing techniques are seeing big shifts of marketing resources into areas that allow for improved behavioral targeting and personalization to optimize response and revenue potential.
Market pace and velocity requires more efficient and intimate online customer engagement, quicker product uptake and viral affirmation through social and shared interest networks, as well as greater prominence and cost-effective prospect acquisition through web sites and contextual search optimization, web content delivery, and pervasive mobile connectivity with customers.
Today’s marketing planning process requires better data integration and analytics, more accurate forecasting and predictive modeling, higher levels of marketing group participation and accountability, as well as the deployment of closed loop campaign performance dashboards. This will be driven by a wider embrace of marketing automation platforms processes, continuous business activity monitoring and intelligence gathering across all customer touch points, interactions and transactions.
Donovan Neale-May is the Founder and Executive Director of the CMO Council, the Growth Officer Council (www.growthguidancecenter.com), and the Business Performance Innovation (BPI) Network (www.bpinetwork.org), a global community of executive change agents driving business reinvention, IT transformation, and process improvement across the enterprise.
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