Marketers Are Confident About the Economy and Their Brands in 2018

3/19/2018
Michelle Markelz
Key Takeaways

What? Marketers are confident in their brands and the economy but they lack confidence in their digital skills. 

So what? Marketers believe their leaders should be more knowledgeable about digital marketing and their value is not understood by their organizations.

Now what? Marketers may have to restructure their teams to match the evolution of the skills and tools of their trade. To prove their value to their organizations, they will need technologies that track and measure their efforts.

​Though marketers project financial gains, they are keenly aware of the digital skills gap threatening their authority

As marketers reflect on the first quarter of 2018 and consider the near future, they are the most confident they have been in two years. That’s according to the Marketers’ Confidence Index, a survey by the American Marketing Association and Kantar Consulting that captures marketers’ optimism on customer spending, marketing budgets and investment climate.

The most recent index, which surveyed marketers from across B-to-B and B-to-C businesses of various sizes, put marketers’ confidence at 130. For context, a neutral score of 100 would indicate that marketers believe that customer spending, marketing budgets and investment opportunities have been and will remain stable. 

 
 

“The outlook marketers have on the positive end is definitely up,” Joris Zwegers, the survey’s administrator and vice president of global research at Kantar Consulting, says. “The proportion of marketers who are pessimistic about customer spending in the next six months has remained stable, but there are now more marketers who hold a very positive outlook.”  The shift in proportions suggests some marketers who previously projected stable spending, budgets and investment climate have changed their view and now anticipate growth in these dimensions.

Marketers also gauged their performance against competitors. Fifty-six percent of marketers report that they feel their revenue growth outpaces their competition. This closely reflects 2016, when 53% of marketers evaluated their revenue growth as better than competitors. Regardless of competition, 59% of marketers are confident that their revenue will grow in the next six months.

Customer Centricity

The index captured marketers’ evaluation of how customer-centric​ their organization is on a scale from zero to 100. Marketers gave their organizations an average score of 74, one point higher than in January 2016.

Though the distinction between individual points is not significant, Zwegers says by viewing the results in 10-point brackets, trends emerge about the tendency of firms to place customers at the heart of their decision-making.

“Companies that score 90 or higher are exceptionally customer-centric,” Zwegers says. “A company like Amazon will sit exceptionally high on this scale. The category below still places a lot of emphasis on the customer, but things like internal process may occasionally be prioritized over an individual customer’s needs.”

Companies at the bottom of the scale are either exceptionally product-focused or put money-making or internal process at the forefront of decision-making with little regard for the customer.

Zwegers says disruptive companies, such as Amazon and Netfilx, are driven by customer centricity, and CEOs of other companies are noting their success and taking a keen interest. “It is clear that being more customer-centric is good for business, but translating a desire to become more customer-centric into organizational behaviors isn’t easy. That’s where companies struggle,” he says. “They’re still trying to balance those [behavioral] shifts with existing culture, structure, processes and the demands to deliver growth every quarter.”

Budgets

Current marketing budgets show the strongest investment in media placement (21% of budget) and creative (20% of budget). Marketers were asked how they would distribute their funds if their budget were to increase or decrease by 10%. In both scenarios, media placement was most likely to be adjusted. Zwegers infers this is due to the short-term impact that media placement has on brand performance and the ease of reallocating funds to this category as budget changes necessitate.

 
 

“Innovation, research and analytics investments are more difficult to change in the short term and may also be deemed too critical to chip away at,” Zwegers says. “If marketers spend less on generating insights, that will hurt them more in the long run [than spending less on media placement]. Cutting money from media is relatively easy and might also be seen as the safest because it’s a short-term step back versus messing with the fundamentals of how they want to drive business in the long term.”


The Influence of Marketing in the Organization

More than 60% of marketers report that they believe marketing’s influence and power in their organization will increase in the next few years. Just 8% of marketers report they feel this influence will decrease, and the remaining 32% feel their influence will stay the same.

Compared to January 2016, this outlook is slightly less positive—at that time, 64% of marketers believed their influence would increase, and 7% believed it would decrease—but over the span of the two years since then, the fluctuation in this metric averages out to 63.8% optimistic and 7.2% pessimistic, indicating consistent outlook over the past two years.

The biggest threat to marketing, according to marketers, is the rest of the organization’s failure to understand marketing’s capability and value. Technology could be a way to validate marketers’ impact, but a lack of adoption of these tools is also a threat.

Marketers expressed that their leaders, CMOs, are most lacking in knowledge about digital marketing. Despite its necessity in competitive marketing plans, digital marketing evades many seasoned marketers because of its recent emergence.

This mismatch of skills and experience was also reflected by 34% of marketers who responded that they are not confident that their organization has the right operating model, including staff, team structure, processes and tools. Just 27% said they are confident in their operating model, and 59% reported they are unsure. 


“Marketing teams are often still organized based on how marketing was done 10 to 15 years ago,” Zwegers says. “In the old model, the most senior marketer in an organization typically had done junior marketing roles before rising to that position. Today, that’s no longer the case. Most CMOs haven’t been in a digital role because it simply didn’t exist or was limited [when they were starting out]. If you think about marketing in the digital age, that structure doesn’t suffice anymore. You can’t expect your managers to have the answers because they haven’t done that job before.”

Marketers expressed the most confidence in their teams’ capabilities, their organizations’ investment in the right customers and cohesive brand positioning. Nearly half reported confidence in all three, while the proportion that reported a lack of confidence ranged from one-fifth to one-fourth.

“The bulk of marketers have the basics nailed down,” Zwegers says. “But the toolbox and possibilities of digital marketing is expanding, and those possibilities are a bit daunting and somewhat nebulous. The number of people with true experience in using all of these tools is relatively small.”

Measuring ROI

Marketers continue to lack confidence in their ability to show return on investment, as little more than one-third report they believe their team understands the ROI of their marketing plans. This could be a function of the lack of adoption or understanding of technology that could effectively report this critical metric of performance. Demonstrating value and ROI of marketing remains an imperative but elusive goal for many.

Survey Composition and Methodology

The survey results comprise the responses of 396 marketers. Ages ranging from younger than 35 to older than 56 were represented. Most respondents identified as managers (30%), but nearly 50% identified as vice president or higher. They represent organizations smaller than 101 employees (36%) as well as larger than 10,000 (14%). About a quarter were B-to-B marketers, and 17% were specifically B-to-C. The rest considered their business to be a blend of the two. The respondents were mostly female (56%). The survey was administered via e-mail from January 23, 2018 to February 12, 2018.


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ABOUT THE AUTHOR:
Michelle Markelz
Michelle Markelz is the managing editor of the AMA's publications. She can be reached at mmarkelz@ama.org.

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