Duke University’s Fuqua School of Business recently released their biannual CMO survey that showed respondents were prepared to increase their mobile marketing budgets even when they weren’t necessarily pleased with their current results. While only about 6% of the current CMO’s marketing budget goes to mobile, they anticipate its share will increase to nearly 16% by 2018.
Of course, mobile has already claimed a higher share of marketing dollars within the last six months. When Duke released it’s last survey in February of this year, mobile only commanded a little more than 3% of the budget. At that time, the 2018 projection was also much lower, only around 9%. While marketers may not always follow through on their spending plans for social media, it would appear that CMOs are spending more on mobile faster than they anticipated.
When evaluating product and service companies, B2C companies are leading the way on mobile spending. Based on percent of overall marketing budget, mobile is commanding:
- B2C product companies – 8.6%
- B2C service companies – 7.3%
- B2B product companies – 5%
- B2B service companies – 5%.
2018 projections for mobile’s share of the budget, as predicted by survey respondents:
- B2C product and service companies – 19.8%
- B2B product companies – 14.4%
- B2B service companies – 13%.
Unfortunately, the willingness of these CMOs to spend more on mobile has more to do with customer behavior than with actual performance of mobile campaigns. The CMO Survey asked respondents to rate their mobile marketing activity performance on a scale from 1-7 (with 7 being the highest) and the average results across all measurable activities were far from impressive.
- Customer engagement – 3.56
- Brand message delivery – 3.47
- Customer retention – 3.12
- Customer acquisition – 2.89
- Sales – 2.74
- Profits – 2.64.
Interestingly, these findings are reminiscent of social media marketing results. In both cases, CMOs are enthusiastic about increasing the budgets of these marketing channels, yet lack tangible ways to adequately track the success of the channel.
In fact, social’s share of the overall budget is falling behind last year’s projections. While it was projected to represent 13.2% by now, it currently only hovers just under 11%. That’s not to say that CMOs are growing less enthusiastic about the potential of social for their businesses. It’s still projected to reach nearly 24% of the overall budget by 2020.
The problem for many companies—both B2C and B2B—is that it’s difficult to measure the ROI of social media activities. While only 15% of overall respondents over the past few surveys believe they can prove the ROI of social activities, B2C product companies believe they’ve been twice as effective at proving social ROI. Unsurprisingly, these same B2C product companies currently allocate 13.7% of their budgets to social and plan to increase that to more than 30% by 2020.
When the survey asked B2C product companies to rate the performance of their social activities using the same 1-7 scale they used to measure the performance of mobile marketing activities, results were slightly more favorable across the board.
- Developing social media strategies – 4.1
- Connecting marketing to social media strategies – 4.0
- Executing social media strategy – 4.0
- Learning what does and does not work for social media – 3.7
- Hiring social media employees – 3.5
- Measuring social media strategy success – 3.5
- Training for social media activities – 3.4
- Managing outside social media partners and companies – 3.3.
While social media performance findings appear better than performance ratings for mobile marketing, a clear opportunity exists. As companies expand their mobile and social budgets, learn how best to measure ROI and explore new strategies, the use of these marketing channels may become just as much about performance as it is customer behavior.
Source:
MarketingCharts. CMOs Bullish on Mobile Marketing Spending, Not So Hot on Current Performance. September 1, 2015.
