Future Tense: The global CMO – from Economist Intelligence Unit

More than a year ago, i wrote “Future of Marketing (in Singapore context)” after reading a white paper by the Economist with the same title.
This year, the economist published a subsequent report, also sponsored by Google, called “Future tense – the Global CMO“.
This report was based on the survey done in Feb 2008 before the economic crisis happened at global scale so i think there will be a lot of changes in 2009 that were not mentioned/thought of in Feb 2008.

Unlike last year, i am not going to cite findings from the report but rather looking at the raw survey results and point out a few things applicable to ASEAN or North Asia region.
For those who want to have a copy of the report, you can try go Google it or shoot me an email at chandlerblog@gmail.com

First thing first, let’s start with some background information about how the report was done and who the respondents are, which companies they work for.

The companies

This report was done by the Economist Intelligence Unit after conducting a survey of 263 executives from MNCs around the world. All of these companies have annual global revenues in excess of US $500 million dollars. In fact, a whopping 40% of these companies have annual revenues above US $10 billion.

Financial services (24%), IT and Technology (14%) and Consumer Goods (13%) are the top 3 industries in which most of the surveyed companies are in. While travel being one of the most competitive/expensive industries in Search Engine Marketing, they only represent a dismal 3% in the total number of respondents.

The Respondents…

30% of respondents have C level titles, with majority is either CMO/Head of Marketing/Head of advertising (11%).
68% have at least regional scope as their responsibilities. 18% are responsible for global activities across the entire organization.
The majority of them are either from sales background (25%) or have always been in marketing (17%).

Majority of the respondents are based in Western Europe (35%) followed by Asia-Pacific (29%) and North America (20%). From this ratio, one can see that the findings of this report are quire relevant to Asia Pacific region.

Now is the juicy part: The Findings

I always like to start with budget first 🙂

61% of these companies have annual marketing budget exceed 5 million US dollars, that equals to around US $420k/month. Interestingly, only 24% of respondents when asked in Feb 2008, mentioned that they expected a cut in marketing budget in 2008 (not 2009). I assume that the percentage will be much higher now, especially in financial services sector.

Having centralized budgeting with decentralized spending/allocation is the most favorite way the marketing budget is being managed (with 59%).
It makes sense this way since each region has its own landscape/characteristics so it required separated allocation, tailored messaging. However, it’s also because of this reason and the lack of understanding that Online marketing is normally allocated the least amount compared to ATL activities IMHO.

Marketing objectives

Amongst all the different marketing objectives, brand building/brand-awareness is still number 1 with more than 62% of respondents agreed that it’s very important (compared to customer acquisition, even though in the second place, is only at 43%)

More than 49% respondent agreed that their marketing strategy is focused on brand building at the expense of other initiatives with more demonstrable ROI. This is hardly a surprise though.
However, sales/revenue data (online, offline etc…) leads the way as being important/very important (49%) for measure of ROI for media campaigns.

Marketing Medium

In 12 months’ time, which mediums do you think will be the most important to your company’s marketing objectives?

 most important marketing medium in 2009

As you can see from the picture above, Online Marketing really start to become mainstream. Traditional ATL activities are become less important so marketing managers in the region when you allocate budget, please take note of this…
In this context, Search engine enquiries simply mean Search Engine Marketing, whether it’s Paid Search Or Search Engine Optimization. 25% of respondents rate it amongst the top 3 most important medium to companies’ marketing objectives!
Online Video sites still have a long way to go. So does Mobile marketing!
I need to stress this point because many times, clients just want to look “sexy, sophisticated”, creating campaigns for the sake of winning the most “innovative” awards rather than taking care of the basics!

However, no matter which medium being used, the need for integrated effort from planning to execution and evaluation is of paramount important.
No longer the case where companies just use one or two mediums. The difference between number 2 most important medium to number 8 is merely 7%.
Yet, how many companies in ASEAN or even North Asia truly embrace an integrated approach towards marketing? Or even how many agencies are capable of executing online/offline activities, gathering resuts and evalutating the performance as a whole?

I am not saying that there aren’t any, my point is that the percentage of those is really small.
Even if it’s just about Integrated Online Marketing (BTL), i doubt that there are many companies in this region are truly doing that. The red tape is just too complicated and the lack of understanding is just too much.

Marketing Vendors/Agencies

Which are the most important attributes of marketing/advertising vendor in Feb 2008?

Most Important attributes of Marketing/Advertising vendors

How about in the next 12 months?

Most Important attributes of Marketing Vendors for 2009

As you can see from the two pictures above, the top 3 attributes stay the same. That is to say companies still pay for value not Rate!
However, it may be something of the past since Low Cost ranks number 4 in 2009.
Also, Agencies with footprints across multiple territories clearly have the edge over others.
I am surprised to see that direct/personal contact with vendors ranks so low in the list. I often find one of the most frustrated things for people on the ground (from client side) is to have to deal with many different account managers in a short period of time. It takes so much energy and time just to build up the rapport, the understanding in terms of work process and managing expectation from one another.

Well, that’s about all actually. We have covered everything from background to marketing objectives, marketing medium to vendors.
I hope this has been useful to you (readers of this blog). If you have any comments, feel free to drop me a line.

It’s time for football now: AFF Suzuki cup Final (second leg) Vietnam vs Thailand!


P.S: This is probably one of the last posts for 2008. I plan to continue writing more regularly in 2009, expanding the coverage from just strict work related topics (marketing) to some area of personal life as well!
Happy New Year and have a Great holiday everyone!

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