Are CMOs too optimistic about 2021?
A new report from Gartner finds marketers playing the glad game—unlike the rest of the C-suite.
Given the warnings from health experts this week, talk of the post-COVID environment may be premature. That isn’t stopping marketers speculating about it and preparing for it.
At the AMA, the prediction is that consumers will return to their prior lives, but “will see their old lives and routines through new lenses and begin to operate in new ways.” Consumers will expect experiences, especially digital experiences which save them time—and increasingly they will expect real-time communications from brands.
Authors at McKinsey & Company echo the need for an experience playbook, but also insist that the best companies are not only expanding their digital capabilities, but are “successfully using advanced analytics” to understand and engage with their customers.
A reality check
Against this background of positivity, the new “CMO Spend Survey” from Gartner, released today, comes as a welcome reality check. For one thing, marketers—having thus far survived budget cuts—appear as a chorus of Polyannas next to their more sober colleagues in the C-suite; the CEOs and CFOs who are preparing for a second wave of the pandemic.
The pandemic also appears to have prompted a return to branding as marketing’s main priority, at the expense of investment in analytics. And as for personalization, Gartner continues to forecast its dwindling importance.
We spoke with Ewan McIntyre, VP analyst at Gartner for Marketers, to get some perspective on these findings (based on interviews with 430 marketing executives in the U.S. and Europe). Fifty-nine percent of CMOs think that budget cuts will be temporary, and that their budgets will increase in 2021. “The budget cuts have not been as widespread as I had anticipated,” said McIntyre. “Just under half of CMOs have had their budgets cut by more than five percent. Some have had their budgets increase; there have been opportunities in this crisis for some brands and sectors.”
CMOs are focused on COVID as a health crisis, which is perhaps drawing to an end. “Regardless of any second wave,” said McIntyre, “the impact that this has had on the global economy means that there will be a significant economic downturn. There’s a misunderstanding of what this crisis is, and what it will become.” No fewer than 73 percent of CMOs surveyed believe the impact of COVID will be short-term, and that the outlook for businesses is positive. “This indicates that they expect things to bounce back to business-as-usual pretty quickly, which is the best case scenario; there are other scenarios which could play out, and they’re being looked at by CFOs across the enterprise right now.”
Based on polling by Gartner’s finance leaders practice, McIntyre told us, marketing comes second only to real estate in areas where CFOs expect to make cuts. “It’s nice that marketing is not top of the list,” said McIntyre. “It usually is. Marketing struggles to prove its value to non-marketers.”
Decline of analytics and personalization
That makes it all the more extraordinary that analytics is in steady decline as a priority, with only 27 percent of CMOs ranking it in their top three. “There are leaders and laggards—but there are lot of laggards when it comes to marketing analytics,” said McIntyre. “I speak with clients all the time who are struggling to acquire the right capabilities, scale them, and use them to drive efficiency, optimization and ROI.” The ascending importance of brand, said McIntyre, reflects the necessity of thinking about brand values and reputation in the era of Black Lives Matter and COVID-19.
Related: Is personalization working?
Finally, Gartner’s prediction that 85 percent of marketers would abandon personalization efforts by 2025 is reflect by the current survey showing it already dropping down the priority list. “There is still a solid case for personalization,” said McIntyre, “but it’s not the answer to everything.” McIntyre talks about moving away from this idea of personalization for the sake of it, and towards targeted help—something actually meaningful to consumers.”