Is data-driven marketing in rude health? Why CMO opinion may not tell the full story

The annual Gartner CMO Spend Survey isn’t just about marketing spending. While this survey digs into the budget and financial priorities of chief marketing officers (CMOs) across a range of industries and geographies, it does much more than that. The survey seeks to understand the capabilities that CMOs define as vital to the delivery of their strategies and how they define and measure success.  

In the 2019-2020 CMO Spend Survey, CMOs were asked to rank the top three strategically important capabilities supporting the delivery of their strategy. The results in 2019 are perhaps not all that surprising – CMOs place marketing analytics in pole position, sharing first place with market research and competitive insights. Why is this not surprising? Gartner survey data and client interactions over some years have shown an increasing focus on customer-orientated strategies and data-driven marketing. In short, CMOs understand the value of data and analytics and insights, and this is evidenced in strategic commitment.   

Commitment to customer insights and analytics is more than warm words though – it’s backed by cold hard cash. CMOs in North America and the UK reported that the largest proportion (16%) of their 2019 budget goes to marketing analytics, with a further 13% spent on market research and competitive insights.  Furthermore, more than 70% of respondents stated that they intend to increase investment in marketing analytics in 2020. All this against a backdrop of falling marketing budgets, with the average budget in North America and the UK dropping from 11.2% of company revenue in 2018 to 10.5% in 2019.

So, is it safe to assume that data-driven marketing is in rude health, with strong financial and strategic commitment? Findings from Gartner Marketing Data and Analytics Survey 2018 backs this up, reporting that 76% of respondents state their marketing decisions are being driven by data. But this same survey identifies a worrying dynamic – marketing analytics investments are often mismatched with their output. This means that expensive and talented data scientist resources are often mired in basic, operational work. This creates an interesting, and challenging situation.

CMOs are placing a lot of weight on data-driven capabilities, with a view that they’ll transform marketing, driving optimised and highly relevant experiences that fuel growth. But despite lofty strategic goals and deep pockets, many marketing organisations are still stuck delivering the basics. This presents a significant risk to ongoing investments into data-driven marketing. Business cases for funding rely on a perception that data and experimentation will transform marketing. Failure to deliver against inflated expectations may come at the expense of future funding commitments.

Further evidence of a data-driven marketing capability gap comes from Gartner’s Marketing Maturity Assessment – a self-assessment tool where marketers can define their current and desired states across a range of vital capabilities. While there is an evident priority in marketing analytics, current maturity levels are stubbornly low. Sixty-six percent of organisations still rank themselves at an intermediate level or below in data-driven marketing.

This lack of maturity is also demonstrated by the metrics that are favoured by marketing in 2019. The stated strategic focus on data-driven marketing and customer experience suggests that metrics such as customer lifetime value (CLTV) should be making it onto CMO’s dashboards. But volume rather than value metrics continue to dominate. Of the metrics that were reported as vitally or critically important in the 2019-2020 CMO Spend Survey, broad measures such as brand awareness, ROI and customer satisfaction are still cited as the most important measures of marketing success. Important as these metrics are, taken in isolation they don’t reflect a balanced view of marketing performance or fully articulate the value marketing delivers to the enterprise.

The commitment to data-driven marketing goes beyond strategic intent and budgetary commitment. It requires a shift in the marketing organisation. The most mature data-driven marketing teams have embedded real-time decisioning, have defined budget for experimentation and innovation with data and analytics and use analytics as a brand differentiator. Tools, technology and data play a vital role, but talent, culture and organisation are also essential components.

Gartner’s Talent Neuron, a competitive intelligence tool that tracks talent supply-and-demand data from more than 65,000 global sources, shows significant growth in marketing data analytics jobs postings over the last decade. It also shows that there’s a significant mismatch between data-driven marketing talent supply and demand. Getting (and keeping) marketing analytics talent is not easy. And building the organisation to scale these capabilities, and the culture to embed data-driven decision making across marketing is also a challenge.

However, data-driven marketing is a journey, not a destination. An important step marketers should take in this journey is to make an honest appraisal of their organisation’s capabilities and culture today, and build a realistic view of where it can get to based on a strategic planning horizon. Like all strategies, this should be informed by a view of the competitive environment as it is today, and how it will evolve over the life of the strategy.

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

Related Stories

Leave a comment

Alternatively

This will only be used to quickly provide signup information and will not allow us to post to your account or appear on your timeline.