How are CMO’s investing in Digital in 2021
Insights from Gartner Annual CMO market study and Octane Research Digital 2021 on online marketing channels, budgets, and ROI
2020 jolted the peaceful life of a CMO.
While some were working hard to make their brands stand out but most were busy collecting awards, coining new jargons, and attending events. Suddenly most of them had no clue what to communicate, how to communicate, and even their personal lives were in turmoil with the whole lockdown.
Initially, the majority of them went silent, then the whole “thank-you” campaign series started, which led to the discovery of terms like - “brand purpose” and “empathy”.
Suddenly CMO’s were repeating these terms while releasing products such as fabrics that can protect you from the virus and chyawanprash flavoured ice cream. Suddenly “immunity” and “health” became the focus. Even Coca-Cola has entered the segment with its immunity-boosting beverages category.
I am just waiting for Heineken to enter the segment and then I can rest in peace.
Leaving my sarcasm aside; if 2020 was all about investing in communications to connect with consumers; 2021 is going to be about seeking safety and looking into existing markets to fuel growth.
Brand Strategy is vital in 2021
According to the Annual CMO Survey by Gartner: “79% of CMOs look to existing markets to fuel growth in 2021. 45% of respondents aim to build their share of wallet with existing customers, focusing efforts on new product development in the coming year either through partnerships, product augmentation, or R&D investments.”
2021 is also about going back to the blackboard and CMOs are focussing on the brand. Brand strategy has leap-frogged to the top of marketing capabilities, from its lowly position near the bottom of the list in 2019 with one-third of CMOs now placing it in their top three.
“33% of CMOs cite brand strategy as their most vital strategic capability, surpassing analytics in importance.”
Gartner’s research suggested then that successful brands take action that is authentically connected to their brand strategy and value proposition. Brand metrics will be an essential component of brand strategy capabilities.
“The new challenges that COVID-19 has presented have shifted CMOs’ focus in terms of the brand metrics that matter. In 2019, awareness was cited as the most valuable metric, with brand health trailing in the second position. The positions have switched in 2020 as CMOs focus on what their audiences know and think about their brand,” says the report.
Digital had channel dominance in 2020
Moving towards channel dominance - Digital has been the champion in 2020 and CMOs plan to invest in digital in 2021. When asked how they carve up their budget across 10 channels, CMOs surveyed said they spend nearly one-quarter (22%) of the marketing budget on digital advertising (13.5%), including display, video, or ads on platforms like Amazon, and paid search (8.6%).
Another 59% went to owned and earned digital channels such as social marketing, the website, SEO, and mobile marketing.
The emergence of owned and earned channels and investments is encouraging.
Search, Social Media, and Google Adwords(PPC) were the top three channels in terms of revenue impact (RoI) on 2020 marketing investments.
Social Media updates stay tall when it comes to leading increased online traffic and customer engagement and develop a fan following. Videos including live streaming was another channel that provided maximum customer engagement.
“Social media continues to be the most engaging type of content for the consumer, as well as offering a communication platform for users. Marketers said that updates on social media gave brands the maximum amount of customer engagement,” says Octane Research Digital 2021.
Online investments in 2021
For Indian CMOs “Customer Acquisition” happens to be the primary marketing goal in 2021.
Additionally the budgets for online fall in the bracket of 11-20% and 21-50%. Pre-COVID the online budgets wouldn’t go beyond 20% and my belief is that CMOs might raise their budgets by another 10% and that will also lead up to digital advertising.
This is because TV and Print have gained more acceptance during the pandemic so it is obvious that the budgets will go more towards traditional channels.
Additionally, I don’t have much faith in the Indian marketing & advertising industry. Because they will run behind the glamour and the next trending aspect of the business.
In 2021 when it comes to new tech Indian CMOs are looking for Cross Channel Marketing Automation, Location Based Marketing, AI, and Big Data. All these four have been surfacing for the last few years. Thankfully Local Language Content is in the top five.
Let me prove my case.
According to the study, Indian CMOs are planning to pump money into Voice Search, Programmatic, and AI & bots. Mobile and Email are in the top five but websites and search are quite behind in the race.
I am not even surprised that Content Marketing is not even featuring or rather at the last. At least in the minds of 250 plus CMOs that Octane surveyed.
As discussed earlier Search, Social Media, and Google AdWords brought in the maximum revenue impact. So why are we not seeing investments in the same? Voice Search can be bracketed under the bigger bracket of Search but Content Marketing at the rear end?
In fact, according to the report Content Marketing is the most effective when it comes to engaging with newer audiences say 27% CMOs.
And then the same CMOs said that “Customer Acquisition” happens to be the primary goal of 2021. I am confused.
I know where the problem lies it’s in the long debate with Content Marketing. 21% CMOs listing the revenue impact of the high spending as one of the major challenges.
I said earlier Content Marketing requires money, time, and patience. The majority of CMOs don’t have these qualities.
19% have listed hiring experienced digital marketing talent as a challenge. Tell me more about it.