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CMO Council's Marketing Outlook Reveals Budgets Holding Up

March 2009
PALO ALTO, CA—March 17, 2009—Customer anxiety and cutbacks are the biggest factors influencing marketing budget allocation in 2009, reports the Chief Marketing Officer (CMO) Council in its annual Marketing Outlook study. Despite a restrained economy, however, marketers see budgets holding up fairly well with dollars being stringently controlled and directed against growing and retaining market share.

The CMO Council audit of over 650 marketers across all regions of the world indicated a disconnect between management mandates for ’09 and marketing’s limited plans to invest in automation, collaboration and process improvement. More surprising, senior marketers expressed limited aspirations to elevate their positions and forge tighter links with line-of-business executives, finance, the CIO, and IT groups. This year’s report was sponsored by the sales and marketing practice of Deloitte Consulting LLC, the Jigsaw business community, and Ad-ology.

Half of the marketers responding to the survey report they’re either holding firm on budgets or anticipating increases. Nearly one third plan at least a small budget increase, with 8.2 percent planning a bump of more than 10 percent. However, almost half say they will decrease spending at least somewhat, with 18.8 percent anticipating cuts of more than 15 percent.

While there are some signs of retrenchment, marketers are committed to their personnel, which represent 42 percent of budgets, and plan to invest in retraining employees for the digital age, rather than replacing them with new talent. Their efforts to harvest greater efficiency from current operations emphasize sharpening internal processes and alignments within their organization instead of instituting broad restructuring plans or cutting ties with current agency partners.

“Marketers are not running scared from the economy. Broad concerns about the economic, stock market and credit downturn are not the leading forces shaping this year’s budget planning process”, said Donovan Neale-May, the CMO Council’s executive director. “Instead marketers are paying close attention to their customers and responding to changes in the selling cycle. The emphasis is on building internal efficiencies and strategic cost cutting, increasing customer insight, and strengthening integration with sales to drive revenue and market share. There’s good news for agencies, too, as marketers are not viewing these relationships as a key to cost reductions.”

According to the CMO Council, senior management is mandating that marketing contribute to the bottom line by retaining and growing market share and lowering costs through greater go-to-market efficiencies. Most important is that marketers are confident they can deliver by focusing on execution via clearly defined goals, improving operational controls, and analytics to help guide resource allocation. While hunkering down, marketers are also gaining increased confidence in the effectiveness of digital marketing investments as digital begins to comprise the majority of demand generation spend.
 

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