Marketers to Spend on Analytics; Use Remains Elusive

FEB 28, 2017|

Spending on marketing analytics—quantitative data about customer

behavior and marketplace activities—is expected to leap from 4.6
percent to almost 22 percent of marketing budgets in the next three
years, representing a 376 percent increase. At the same time,
marketers say barely a third of available data are used to drive
decision making in their companies.

These are among the latest findings from The CMO Survey . Conducted
biannually since August 2008, and sponsored by the American
Marketing Association, Deloitte, and Duke University’s Fuqua School of
Business, The CMO Survey is the longest-running survey dedicated to
understanding the field of marketing. The latest edition received
responses from 388 top marketing executives.

When asked to rate the percent of projects in which available and/or

requested marketing analytics are used before making a company
decision, marketing leaders have consistently reported levels ranging
from a high of 37 percent in 2012 to the current level of 31.6 percent.
These levels are higher for business-to-consumer companies: 38.5
percent for business-to-consumer service companies, and 33.2 percent
for business-to-consumer product companies.

Figure 1. Company Use of Marketing Analytics

Marketers cited a number of factors that prevent them from using
analytics as shown in Figure 2. Almost one third reported that the
biggest factor is the lack of processes or tools to measure success
through analytics. This suggests that companies have not thought
through how analytics will enter the decision making process or how
analytics will help marketers understand the effectiveness of their
actions. The second largest barrier is that firms lack people who can
span the world of marketing analytics and marketing practice. This
divide between rigor and relevance requires boundary spanners that
are either analytical managers or analysts with managerial insight.
Either way, there must be human capital that can connect the dots
between marketing practice and analytics. A prior CMO Survey found
that only 3.4 percent of senior marketers believe they have the right
talent to play this role.

Figure 2. What Factors Prevent Your Company From Using More

Marketing Analytics?
On the upside, data is, for the most part, arriving when needed and is
not too complex. Likewise, insight and relevancy do not appear to be
the primary drivers of low analytics use levels.

How are analytics driving marketing decision making when they are
used? Data reported in last year’s February 2016 CMO Survey reports
that the largest use lies in leveraging analytics to generate customer
insight (46.4 percent of companies), followed by customer acquisition
(43.6 percent), customer retention (38.1 percent), digital marketing
(36.7 percent), segmentation (31.8 percent), marketing mix decisions
(31.5 percent), and branding (30.8 percent). Areas that need attention
include using analytics in managing pricing, channel partners, and the
salesforce—all of which would boost business-to-business company
use of analytics.

Concrete recommendations for improving the use of marketing

analytics are outlined in a previous Forbes blog  that I wrote with
Fuqua School of Business students, Sylvia Yang and Shiwani Kumar.
We interviewed executives from a range of companies and found ten
steps that companies can take to improve their usage levels. One
additional recommendation I offer here is that companies should
evaluate whether their marketing analytics are of a sufficiently high
quality level. In the most recent CMO Survey, only 35 percent of
marketing leaders report they formally evaluate the value of their
marketing analytics. Regular review of the analytics used and not used
may spur important conversations about the role that marketing
analytics could play in driving firm decision making, which, in turn,
should lead to stronger processes for doing so.