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Optimistic or Delusional? The Chief Marketing Officer 2022 Outlook

6 minute read
Dom Nicastro avatar
Chief marketing officers are an optimistic bunch despite economic and political forces crashing on their brands.

Chief marketing officers must cope, like most brand leaders today, with inflation woes, the Russian invasion of Ukraine, supply chain issues, China’s lockdown measures and unprecedented talent competition.

Further, they lack the capabilities to accomplish the work of marketing: more than a fourth of CMOs report marketing data and analytics as a top capability gap, followed by customer understanding and experience management (23%) and marketing technology (22%), according to the annual Gartner 2022 CMO Spend and Strategy Survey conducted between February and March.

In all: 58% of CMOs report their teams lack the capabilities required to deliver their strategy.

How do CMOs feel about all this? Great, actually. Wait, what?

“The majority of CMOs reported that the thought that increasing costs faced by their business and their customers would have a positive impact on their strategy in 2022,” Ewan McIntyre, VP analyst and chief of research for the Gartner for Marketers Leaders, told CMSWire. “This seems counterintuitive to say the least, especially as you look at other Gartner data points that indicate that CFOs are prepared to cut costs if inflation persists throughout the second half of 2022.”

CMOs Get More Cash This Year

Ok, maybe then — when costs are cut — the optimism will subside for our friends in marketing leadership circles. 

For now, however, CMOs are feeling pretty good despite the incredibly volatile and challenging economic and sociopolitical uncertainty surrounding the Russia-Ukraine war.

One reason for the positivity perhaps? They have more money. Marketing budgets have climbed to 9.5% of total company revenue in 2022, an increase from 6.4% in 2021. That's not pre-pandemic levels; this year’s budget is still down from the average budget between 2018 and 2020 of 10.9%.

The positive story of budgetary increases in 2022 is counterbalanced by increasing uncertainty and erosion in consumer confidence. CMOs need to adopt agile marketing planning to deal with upcoming volatility and uncertainty, according to McIntyre.

“I expected budgets to climb back this year, but for them to lag pre-pandemic levels,” McIntyre said. "Budgets climbed from their low point of 6.4% in 2021 to 9.5% in 2022. And eight of the nine industries we surveyed reported year-on-year budget increases. As ever, there were significant variances across industries, but the story was generally positive. The question is, will the budget that CMOs start 2022 with be the budget that they end the year with? The swirl of fiscal and geopolitical uncertainty is likely to chip-away at budget growth.”

Related Article: What's Top of Mind for Chief Marketing Officers in 2022?

Offline Channels Rebound

Digital accounts for 56% of marketing spend; social advertising tops the list, closely followed by paid search and digital display. Offline channels, meanwhile, saw a resurgence. Brands are recalibrating journeys, and CMOs are balancing awareness and performance, according to McIntyre. This represents, he said, a shift from digital-first to hybrid, multichannel journeys. In post-lockdown markets CMOs need to build journey orchestration capabilities to meet their customers where they are, using a combination of online and offline experiences, he added.

Still, the offline surge did come as a surprise. Weren’t we in the new all-digital world where post-pandemic experiences cater to online touchpoints and are trending toward metaverse and Web3-backed experiences?

Maybe, but experiences on actual Earth still count. Offline channels account for almost half the total available budget (44%), a more equitable split than in recent years, according to Gartner researchers. Likely, with Western Europe and North America relaxing pandemic protocols, customer journeys have seen a recalibration and need to lean toward supporting a hybrid reality, McIntyre added.

Yet still, McIntyre found the 44% in offline channel spend as “pretty extraordinary, considering massive cuts in events and sponsorship less than two years ago.”

“The strength of the return in offline media took me by surprise,” McIntyre said. “We’ve been talking about the need for customer journey orchestration, to understand and map to complex, multichannel journeys.”

Related Article: CX Decoded Podcast: CMO Leadership Challenges and Opportunities

Learning Opportunities

Lack of Marketing, Customer Experience Capabilities

Journey orchestration may be hampered by a lack of in-house capabilities. Close to 60% of CMOs believe they don’t have the in-house capabilities to deliver their strategy.

While CMOs are confident in their capabilities to manage brands, they still struggle finding capabilities for marketing data and analytics, customer understanding and experience management and marketing technology.

“At the same time the balance of budget allocated to agencies has grown, investments in in-house have stagnated,” McIntyre said. “CMOs need to look afresh at their operating model to ensure that they can deliver the results required today while making marketing ready for tomorrow.”

These challenges jibe with those reported in the latest CMSWire State of Digital Customer Experience report. Only 11% of organizations say they currently understand customer behavior well, according to the CMSWire report. While 56% say they moderately understand customer behavior, limited actions have been taken on this understanding. Also, 33% say they either understand customer behavior poorly or that they haven’t started to understand customer behavior yet. 

And, fulfilling these capabilities in-house is difficult because of the competition for talent. Companies want marketers perhaps more than ever. But many marketers don’t want to work for certain companies.

LinkedIn’s global data on marketing jobs in March found a 374% growth in marketing jobs in 2021 and 1.3 million-plus marketing jobs posted. However, LinkedIn also reported a 31% year-over-year increase in job changes for LinkedIn members within the marketing industry and 618,000 marketing job departures in 2021.

Gartner researchers report marketing is experiencing a historic surge in talent demand in 2022. “Prioritizing the proper mix of resources should be a mission critical priority for CMOs in order to attract and retain the capabilities they need to deliver against their CEO’s goals, such as focusing on brand and customers,” McIntyre said.

Related Article: Can You Keep Your Marketers From Packing Their Bags for Another Job?

What’s Ahead for the CMO?

2022 is certainly not the new normal that CMOs were promised, McIntyre said. CMOs are going to have to grapple with a range of macroenvironmental, social and political realities over the next 12 months.

Already CMOs in consumer goods companies have seen their budgets stagnate year-over-year as inflation and supply chain issues bite. It’s likely that other industries will follow, McIntyre added. 

“But 2022 isn’t 2008 — the cost cutting playbook will not be enough,” he said. “In a time when your buying power is falling, CMOs must protect investments and work hard to convince customers that choose their brands. And while the death of the cookie was delayed, its end is nigh, causing further complications for marketing. CMOs will have to grapple with the end of cheap digital media that uses third-party data for targeting. In short, the next 12 months is going to be a bumpy ride for marketing.”

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