Study Finds Social Media Not Fully Leveraged by CMOs
A recent IBM study found that only 26 percent of CMOs are tracking blogs, 42 percent are tracking third party reviews and 48 percent are tracking consumer reviews to help shape their marketing strategies. The study was conducted across 1,700 chief marketing officers in 64 countries and 19 industries as a means to determine the focus on market circumstances versus individual consumer feedback.
Of the study and the shifting focus of CMOs, IBM researcher Carolyn Heller Baird said, "The inflection point created by social media represents a permanent change in the nature of customer relationships. Approximately 90 percent of all the real-time information being created today is unstructured data. CMO's who successfully harness this new source of insight will be in a strong position to increase revenues, reinvent their customer relationships and build new brand value."
Collectively, the study points to four key challenges that CMOs everywhere are confronting: the explosion of data, social media, channel and device choices and shifting demographics will be pervasive, universal game changers for their marketing organizations over the next three to five years. But a large majority of CMOs feel unprepared to manage their impact.
Data explosion: 2.5 quintillion bytes of data are created - so much that 90 percent of the world's data today has been created in the last two years alone. The increasing volume, variety and velocity of data available from new digital sources like social networks, in addition to traditional sources such as sales data and market research, tops the list of CMO challenges. The difficulty is how to analyze these vast quantities of data to extract the meaningful insights, and use them effectively to improve products, services and the customer experience.
Social platforms: Social media enables anyone to become a publisher, broadcaster and critic. Facebook has more than 750 million active users, with the average user posting 90 pieces of content a month. Twitter users send about 140 million tweets a day. And YouTube's 490 million users upload more video content in a 60-day period than the three major U.S. television networks created in 60 years. Marketers are using social platforms to communicate - with 56 percent of CMOs viewing social media as a key engagement channel - but they still struggle with capturing valuable customer insight from the unstructured data that customers and potential customers produce.
Channel and device choices: The growing number of new marketing channels and devices, from smart phones to tablets, is quickly becoming a priority for CMOs. Mobile commerce is expected to reach $31 billion by 2016, representing a compound annual growth rate of 39 percent from 2011 to 2016. Meanwhile, the tablet market is expected to reach nearly 70 million units worldwide by the end of this year, growing to 294 million units by 2015.
Shifting demographics: New global markets and the influx of younger generations with different patterns of information access and consumption are changing the face of the marketplace. In India, as an example, the middle class is expected to soar from roughly five percent of the population to more than 40 percent in the next two decades. Marketers who have historically focused on affluent Indian consumers would do well to adapt their strategies to market to this emerging middle class. In the United States, marketing executives must respond to the aging baby boomer generation and growing Hispanic population.
And, as always, when it comes to what's most important, it's still ROI with 63 percent of CMOs stating ROI on marketing spend will be the most important measure of their success by 2015 but only 44 percent feel fully prepared to be held accountable for marketing ROI.
But here's the rub. If CMOs are to be held responsible for the marketing returns they deliver, they must also have significant influence over all "Four Ps": promotion, products, place and price. The study found that this is often not the case.
CMOs say they exert a strong influence over promotional activities such as advertising, external communications and social media initiatives. But, in general, they play a smaller role in shaping the other three Ps. Less than half of the CMOs surveyed have much sway over key parts of the pricing process, and less than half have much impact on new product development or channel selection.
If we are going to ask CMOs to exert more control over ROI then we're going to have to give them the keys to the rest of the kingdom.