The past three years have disrupted life and business as we know it. Now that the world is emerging from a pandemic, what’s next? For insight, let’s flash back to 1920.
The U.S. has just come through a deadly influenza pandemic, a world war, and was experiencing both substantial labor unrest and race riots across the country. It was in this context that then presidential candidate Warren G. Harding adopted the campaign slogan, “Return to Normalcy” to point voters back to “better days.” And while there were disputes about what was “better” about those days—similar to debates today—there is no escaping the remarkable similarity of these historical periods.
We don’t know what’s ahead for the U.S., as the country likely heads into a recession, constraining business investment and growth. However, we can address the question of how the pandemic has changed marketing. The CMO Survey has been collecting and disseminating the opinions of marketing leaders since 2008. This 29th edition examines how marketers are approaching strategies, spending, and organization in a post-Covid environment. Results show that some aspects of marketing have changed quite a bit over the last three years, while other aspects that changed dramatically during Covid have returned to pre-Covid levels.
These results are based on our most recent survey of 273 marketing leaders at for-profit U.S. companies, 95.6% of whom are VP-level or higher.
Hedging Economic Optimism
Optimism for the U.S. economy hit 57.2 (out of 100)—up from 50.9 at the height of the pandemic in June 2020 and the all-time low of 47.7 in February 2009 during the Great Recession. This level is lower than the 66.8 reported in February 2022, which is not surprising as many marketers are concerned about growth prospects this year and next.
Shifting Customer Priorities
While trusting relationships were most important to customers before the pandemic, this shifted to focus on product quality during the pandemic. This priority holds as most important, but low price has now emerged as a secondary priority given inflationary pressures. Both B2B and B2C buyers will be seeking to balance quality and price, as they manage budgets buffeted by inflation.
Changing Use of Channels
The pandemic has changed the use of channels—65% of marketers are now using a larger number of channels while 41% using social channels to sell. Surprisingly only 10.5% of marketers report their former face-to-face channels are now all digital, and half report their companies are returning to or opening up face-to-face channels. This finding reflects buyers’ growing appetite to embrace traditional channels after two years of all-digital interactions.
Strengthening Role for Marketing
The pandemic’s acceleration of digital marketing investments has pushed marketing budgets as a percent of company budgets up to the highest level in the CMO Survey history. This level also corresponds to the growing importance of marketing in organizations, which has increased in more than half of all companies over the last two and half years.
Flattening Spending Across Categories
Marketers report 10.4% growth in marketing spending over the last year but predict this level will decrease and start trending toward the pre-Covid level of 5.8% growth in the next year. Brand, CRM, and innovation investments follow the same pattern—all growing but reverting to levels closer to pre-Covid levels. Traditional advertising spending returns to negative growth after temporary lifts across the last two surveys, restarting a decade-long decline. Mobile spending as a percent of marketing budgets is flat at 13.7% and has returned to pre-pandemic levels (13.5%) after climbing to a high of 23% during the pandemic. Spending on social media has also been flat at 14%-15% of budgets over the last 18 months, coming off a June 2020 Covid splurge when spending reached 23.2% of marketing budgets. Both mobile and social continue to disappoint marketers in terms of contributions to company performance, showing no improvement over time.
Surging Use of Marketing Analytics
Spending on marketing analytics as a percentage of the marketing budget hit an all-time high of 8.9% after a decade-long level of 6% to 7%. Marketing analytics is now being used in nearly half of all marketing decisions, rising from 38% just before the pandemic. Companies have also made good progress attributing to marketing analytics to company performance. We expect to see analytics continue to rise, enabling teams to defend investments and make more precise decisions across the marketing landscape.
Growing Quality of Marketing Knowledge
Marketers have invested in building their knowledge resources through the pandemic. They have nearly doubled investments in developing knowledge about marketing strategy and operations and tripled investments in marketing research and intelligence. These investments have paid off with the quality of all marketing knowledge resources rising during this period. As one might expect, market research has also changed quite a bit during the pandemic, with more companies studying online consumer behavior (63.3%) and using more video interviews (57.8%). Only 18% are doing more text analysis, which is somewhat surprising given its availability to most marketers.
Assessing Work from Home Trends
The size of marketing organizations grew by 15.1% in the last year but is expected to drop to 7.3% growth in the next year, reverting closer to growth rates reported before the pandemic. Work from home is now prevalent across industries and economic sectors, with 57.5% of marketers reporting their teams working from home at least some of the time and 48.7% working from home all of the time. Overall, marketing leaders are confident in team productivity in both arrangements, with 50% reporting no change in worker productivity levels. Marketing leaders are more worried about company culture with more than a third reporting that working from home has weakened it. For example, 45% of marketing leaders report that young marketers are socialized less within the company in work-from-home settings. Remote working provides workers with greater flexibility but can harm engagement for these newer workers over time.
Elevating Marketing Leaders
Marketing leaders were invited to attend board meetings at a rate of 4.9 on a seven-point scale where 1=not at all, 7=very highly, with 63% of marketers reporting participation levels above the midpoint of the scale (five or more). These numbers show that marketing has a reasonably strong seat at the table at many companies.
Increasing Political and Ecological Activism
The percentage of marketing leaders who report that their companies would use their brands to take a stand on politically charged issues reached a CMO Survey high at 30.2% of companies up from the pre-Covid level of 18.5%. However, when asked about actions to reduce the negative impact of marketing-related activities on the ecological environment, levels show increases from last year but have not yet rebounded to pre-Covid levels, except in changes to the brand.
Three different reports summarize these and many other 29th edition results. The Highlights and Insights Report shares key survey metrics, trends, and insights over time, the Topline Report offers an aggregate view of survey results, and the Firm and Industry Breakout Report displays survey results by company sector, headcount, and sales. We hope that marketers find these metrics and insights useful as they navigate a post-Covid environment and place their bets over the coming year.