Marketers will soon be swimming in data
Budget allocation for marketing analytics set to triple, CMO survey finds.
Businesses are expecting to soon triple their investment in marketing analytics, according to forecasts in a major US study.
The CMO Survey by Deloitte released in February 2018 showed that US businesses across a range of sectors plan to devote 17.3 per cent of their marketing budget to analytics over the next three years – a 198 per cent increase on the 5.8 per cent currently spent.
This rate of spending defies recently reported budget allocations to analytics, which have remained steady. CMO Survey results over the past six years show marketers spend between just 5 and 7 per cent of their budget on analytics.
The biggest sector to invest in analytics is the mining and construction industry. Survey respondents in that industry expect to spend a whopping 63 per cent of their marketing budget on analytics over the next three years – up from 3 per cent currently. Overall, marketers in the B2B product sector expect to spend 20.4 per cent of their budget on analytics (up from 6.4 per cent). Those in the B2B services sector expect to spend 15.3 per cent (up from 5.9 per cent).
The survey also found more companies are using analytics to make key business decisions. Respondents said analytics played a part in more than one in three decisions made by B2B product and services businesses. Marketers are more likely to use quantitative tools to demonstrate marketing’s impact on the business bottom line.
Marketers said getting management buy-in was crucial. Across all sectors, 61.2 per cent said that it was either “somewhat important”, “important” or “very important” that upper management drove marketing analytics use.
“[Survey] results indicate that companies are investing in the development of marketing knowledge,” says Professor Christine Moorman from The Fuqua School of Business at Duke University, which supported the survey alongside the American Marketing Association.
“The largest investment is in the development of marketing capabilities, which are the complex bundles of knowledge and skills for carrying out marketing activities that are deeply embedded in organisational processes. These capabilities are likely in areas such as digital marketing, martech platforms and marketing analytics where companies are trying to get up to speed fast.”
A 2015 analysis in the Harvard Business Review found marketing analytics can have a substantial impact on a company’s growth but only when they are handled correctly, are focused on business goals and get to the people who can use them. The authors, including Matt Ariker from McKinsey’s Consumer Marketing Analytics Centre, also said handing off information from data crunchers to decision makers can leave room for miscommunication, misunderstanding and wasted effort.
“If companies cannot figure out how to make the best use of it, in the end, it’s just another expense,” they wrote.
Further reading: How marketers can use data as a weapon
Photo: Chris Kristiansen on Unsplash