The CMO Survey Reveals Marketing Tech Trends and Challenges in 2024
The latest CMO Survey sheds light on the evolving landscape of marketing technology and its impact on business strategies. As we navigate through 2024, marketing leaders are investing heavily in new technologies, yet they face significant challenges in maximising their potential. Here’s an in-depth look at the survey’s key findings and what they mean for the future of marketing.
Rising Investments in Marketing Technology
Increased Spending on Martech
According to the 32nd edition of The CMO Survey, companies are dedicating 19.9% of their marketing budgets to marketing technology (Martech). This figure is expected to rise to 30.9% over the next five years. Despite this increase, only 56.4% of these tools are actively utilised.
- Current Utilisation: A significant portion of purchased Martech tools remains underused.
- Future Investments: The projected growth in Martech spending reflects a strong commitment to leveraging technology for enhanced marketing performance.
Challenges in Martech Integration
The survey highlights several hurdles companies face:
- Staffing Issues: Hiring and retaining skilled personnel to manage Martech is a major concern.
- Data Integration: Seamless integration of Martech with existing data systems remains a challenge.
Professor Christine Moorman of Duke University emphasises that overcoming these obstacles is crucial for Martech to deliver its promised benefits.
Generative AI in Marketing
Adoption Rates and Impact
Generative AI, including large language models (LLMs), is still in its infancy within the marketing sector. Only 7% of marketing activities involve generative AI, and just 10% of companies are currently using LLMs. The survey notes:
- Positive Impacts: Early adopters report reductions in overhead costs (7%), improved customer satisfaction (6.1%), and enhanced sales productivity (5.1%).
- Barriers to Adoption: Companies face issues such as minimising bias and investing in necessary hardware. Additionally, ensuring that generative AI aligns well with brand strategies and target markets remains a challenge.
Professor Moorman sees a substantial opportunity for growth and innovation in this area, urging companies to optimise AI tools for better performance.
Sustainability in Marketing
Growing Budgets and Strategies
Marketing budgets for sustainability and climate issues have increased to 1.9% from 1.2% last year. This percentage is anticipated to grow to 4.5% in five years. However, the survey reveals that:
- Current Usage: One-third of companies are not using marketing to address climate change risks.
- Actions Taken: Among those that do, half are changing their products or services, 42.9% are altering partnerships, and 40.3% are adjusting marketing promotions. Only 25.6% are adopting climate-related metrics, up from 18.7% two years ago.
Despite improvements, these figures still lag behind pre-pandemic levels, indicating room for growth in integrating sustainability into marketing strategies.
Marketing Spending Trends
Impact of Inflation
Marketing budgets as a percentage of company budgets have continued to decline, from 13.8% in 2022 to 10.2% this year. Inflationary pressures are a major factor in this reduction:
- Customer Relationship Management: Spending in this area has dropped from 6.2% to 3.9%.
- Brand Building: Investment has decreased from 5.5% to 3.9%.
The survey reports a decrease in marketing organisation growth from 5.5% to 3.9%, though there is an expectation of an increase to 4.4% next year.
Leadership and Value
Despite these budget cuts, marketing leaders continue to play a vital role:
- Responsibilities: Brand, digital marketing, and advertising remain core functions, though responsibility levels have slightly decreased.
- Value Perception: Marketing is increasingly seen as a value-creating function, particularly in smaller companies and B2C product sectors. This perception positively influences stock market valuations.
Performance and Forecasts
Robust Marketing Performance
Marketing performance remains strong, with profits rising from 5.6% to 8.3%, and growth in customer retention (9.9%) and brand value (6.3%). Smaller companies have shown the strongest performance across these metrics.
Economic Outlook
While optimism about the U.S. economy is relatively high (67 on a 100-point scale), inflationary pressures are affecting marketing spending. B2B and B2C service sectors are particularly hard-hit. Marketers are finding efficient ways to use their budgets to reach and convert customers despite these constraints.
Leading Companies in Marketing Excellence
The spring editions of The CMO Survey ask marketing leaders to nominate companies they view as setting the standard of excellence. For the sixteenth consecutive year, Apple topped the list. Other industry winners include:
- Amazon
- Nike
- Procter & Gamble
- State Farm Insurance
- Microsoft
These companies are recognised for their exceptional marketing practices and innovation.
Conclusion: Navigating Marketing Challenges and Opportunities
The latest CMO Survey provides a comprehensive overview of the current state of marketing technology and its impact. As companies navigate through inflationary pressures and strive to maximise the potential of Martech and generative AI, they must address key challenges such as staffing, data integration, and technology optimisation.
Investing in Sustainability and adapting to the evolving economic landscape will also be crucial for future success. The insights from the survey highlight the need for strategic investments and innovative approaches to stay competitive in a rapidly changing market.
Useful Links
- CMO Survey: CMO Survey
- Generative AI in Marketing: Generative AI Impact
- Marketing Technology Trends: Marketing Tech Trends
- Sustainability in Marketing: Sustainability Marketing
- Inflation and Marketing Spending: Marketing Budget Trends
