89% of CMOs predict growth in their marketing budgets: Dentsu report

Despite various financial institutions projecting a cautiously pessimistic picture of the world economy, the CMOs of global corporations have been holding an optimistic outlook for business in the near future. This was revealed in the latest Global CMO Navigator 2024 report released by Dentsu.

According to the Dentsu report, the chief marketing officers worldwide have been exhibiting a notable faith in economic revival along with revolutionary business shifts. Collecting responses of 1,934 marketing leaders from 13 countries, the survey underlines a major change in enterprise strategy with a focus on innovation, customer experience, and digitalisation.

The business sentiment has drastically elevated among the marketing leaders. Nearly 87% of the CMOs surveyed expected the economy to get better in the next six to 12 months. Incidentally, this sentiment was shared by 69% CMOs only about six months ago, exhibiting a strong, 26% rise in the number of CMOs being optimistic.

Rise in revenues, marketing budgets

While this represents a significant rise from previous predictions, the region-wise differences exist. For instance, the CMOs from the Asia-Pacific (APAC) region appeared to be highly optimistic, with nearly 90% mentioning that the economy would get better in the next 6 to 12 months. Even the CMOs from North America and Latin America exhibited high optimism, with 84% expecting a revival in the same period.

Business growth figures also seem to be corroborating such optimistic outlook. While 79% CMOs experienced growth in their corporate revenues, nearly 90% of the CMOs from EMEA were found to be bullish on this front. A similar, strong performance was reported by the CMOs from North America and Latin America (87% each).

As with revenues, the CMOs worldwide also expect a rise in their marketing budgets in the coming months. Nearly 89% of CMOs expect to witness a rise in their budgets. Among regions, CMOs from North America and EMEA look particularly bullish with 92% each expecting a budget increase next year.

Incidentally, the study notes that CMOs working at organisations with more than 1,000 employees are more likely to report that their corporate revenue has increased significantly and expect bigger budget bumps.

CMO’s changing role

The report captures changes happening in organisational priorities. With products and demand generation areas being at the top of their priority list, companies are experimenting with fresh approaches to create demand for their products and services. Moving away from the conventional brand marketing methods, businesses are examining new ways to woo the customer.

The role of marketers is changing drastically, evolving from being confined to communications to being innovative business contributor. With marketing’s mandate widening, customer satisfaction and growth are elevated as the primary business results CMOs are accountable for today.

About 54% CMOs said that their organisations expect them to be responsible for ‘customer experience and advocacy’ while 53% mention ‘growth in customer base’ as the new CMO responsibility. These changes in role expectations were found to be more pronounced in Japan. As high as 65% CMOs from Japan see ‘customer experience and advocacy’ and 61% ‘growth in customer base’ as the new responsibility areas expected of CMOs today.

Outlook towards media

Even as the CMO role seems to be undergoing a dramatic evolution, managing media continues to be an important part of their business. About 88% of global CMOs think media is a very important, if not critical driver for growth from the organisational point of view.

However, CMOs reported lack of access to and visibility into data and integrating emerging technologies like artificial intelligence (AI) as their biggest media transformation concerns during the survey. The CMOs working in automotive, energy, pharmaceuticals, personal care, and retail were found to be particularly concerned about the lack of visibility into closed tech-platforms.

The CMOs working in B2C companies also voiced their struggle with letting go of control over brand when working with creators, while B2B CMOs felt more threatened by the tightening of data privacy norms by the governments in different parts of the globe.

There also have been changes from the conventional media strategies when it comes to selection of content to direct their ad spends to. The new media spending priorities show that CMOs understand the importance of fit-for-platform content and of having the content production capabilities to fit their media strategies. In the next 12 months, nearly 45% of CMOs expect to increase their investment in short-form content, such as TikTok, reels on Instagram, etc. About 43% each expect to increase investment in 'social commerce' and 'Production and sponsoring of original content on TV, with Influencer marketing (42%) seen as the next priority area.

Amid these concerns, CMOs also expressed their excitement about the new technology and content opportunities emerging in media as it evolves beyond the delivery of communications and into a key growth driver. Evaluating the next one year in view, 36% CMOs seemed excited about media opportunities in the areas such as increasing partnerships in tech and content, bundling offers, generative AI licencing models, etc.

Overall, the Dentsu report captures the mood of optimism among CMOs worldwide, contrary to the perceived air of pessimistic economic outlook presented by financial institutions for the next quarters.