Buoyed by optimism about the U.S. economy, CMOs said they plan to increase marketing budgets by an average of 8.7% this year, according to the semi-annual CMO Survey released Wednesday by Duke University, the American Marketing Association and McKinsey & Co.
The study was based on an online survey of 288 senior marketers in the U.S., of which roughly 70% work for b-to-b companies.
When asked to rate their optimism about the U.S. economy on a scale of 0 to 100 (with 100 being the most optimistic), CMOs gave an average rating of 70, a record high since the survey was launched in February 2009 and the optimism rating was only 48.
"Customer acquisition, customer retention and customer purchase volume are all increasing, as well as the entry of new customers into the market," said Christine Moorman, professor at Duke University's Fuqua School of Business and director of the CMO Survey.
CMOs also believe low prices will be less important than factors such as excellent service, superior product quality and trusting relationships. "Together, these reflect the positive outlook marketing leaders have," Ms. Moorman said.
Marketing budgets are increasing at a higher level than last year, when they were expected to increase by an average of 6.7%.
B-to-c services companies are expected to have the highest marketing budget increases this year (13.4%), followed by b-to-b services companies (9.2%), b-to-b product companies (9.1%) and b-to-c product companies (5%).
Spending on digital marketing will be up an average of 14.7% this year for all companies, compared to 8.2% a year ago. Spending on traditional advertising will be down an average of 1.1% this year, compared to down 0.1% a year ago, the survey found.
One budget area that is expected to grow significantly over the next three years is marketing analytics. Currently, marketing analytics makes up approximately 6.4% of the total marketing budget, but it is projected to grow to an estimated 11.7% of the marketing budget within the next three years, across all company categories.
B-to-b product companies lead all other sectors in spending on marketing analytics (7.0% of the budget), followed by b-to-c product companies (6.8%), b-to-c services companies (6.6%) and b-to-b services companies (5.6%).
However, b-to-b companies lag b-to-c companies when it comes to making use of the data they are gathering through marketing analytics, the survey found.
At b-to-c product companies, 46.9% of projects make use of available marketing analytics, and at b-to-c services companies, 30.6% of projects use available data from marketing analytics. However, at b-to-b product companies, only 24.9% of projects make use of available data, and at b-to-b services companies, only 23.3% of projects make use of the data gathered.
"B-to-c product companies have cracked the nut on how to use marketing analytics," Ms. Moorman said. "B-to-b product companies are lagging."