Today’s CMOs face a fragmented marketplace, expanding media channels, and empowered consumers who increasingly use multiple platforms to connect with brands.
Digital has transformed some industries and disrupted others. Marketing has shifted from a cost center to a source of vital demand generation activities. Increasingly, CMOs must demonstrate their team’s contribution to the bottom line and make every dollar count.
The need for marketing performance measurement and insight has never been greater. Yet only one in four marketers reports high levels of confidence in their ability to measure the ROI of their media or trade spend.
This statistic and others are among many surprising findings in a new report from Nielsen. Nielsen surveyed top U.S. marketers at for-profit companies in the automotive, consumer packaged goods, retail, telecommunications, technology and travel industries to gain insight into the most important marketing trends impacting CMOs. [Download your copy of The Nielsen CMO Report 2018]
“I don’t think anyone in the industry should be very confident in their ability to quantify ROI at this point. Attribution and measurement need to catch up to the evolution of consumer media consumption habits,” said one of the CMOs surveyed.
The first in an annual series, the Nielsen CMO Report reveals how brands are navigating today’s increasingly complex marketing and advertising environment. Nielsen conducted an in-depth survey and one-on-one interviews to understand what’s happening now and to get a sense of “what’s next” for both their companies and their careers.
CMOs See a Need for Speed
In today’s fast-paced, increasingly digitized world, marketers have to be able to analyze and adapt to changes in consumer behavior quickly. The ability to quantify ROI and demonstrate real business results is imperative, as is the need for continuous improvement in marketing performance.
CMOs know they must justify the investment in advertising, not to mention the media, data, technology, resources and vendors that support it.
Marketers and their agencies are clearly adapting to changing consumer media habits by taking a more strategic approach to their marketing mix, but challenges remain organizationally, technologically and in regard to consistent ROI measurement.
Nielsen asked marketers to evaluate traditional and digital media channels as well as the “walled gardens”. The goal was to identify the most valued media channels, to understand how confident they are in measuring ROI and to track how their budgets are being impacted now and in the future. Here are some of the findings.
Investment in Attribution Is Paramount
- Nearly 28% of respondents reported not having the data they need..
- 79% of respondents expect to increase their investment in marketing analytics and attribution in the next 12 months.
- Respondents expect, on average, a 44% increase in dollars invested in their marketing analytics and attribution capabilities in the next 12 months.
Search and Social Media Are Most Important Channels
- 79% of respondents ranked search as “very” or “extremely” important, while 73% thought the same about social media.
- A large majority also considered online video (64%) and email (59%) to be very or extremely important channels.
Digital Spend Will Increase
- When forecasting the next 12 months, 82% of respondents expect to increase their digital media spend as a percentage of their total advertising budget.
- By comparison, only 30% of respondents plan to invest more in traditional media channels in the near term.
Common Concerns: Avoid Waste and Increase Efficiency
- Marketers reported being most concerned with improving media efficiency by limiting advertising waste.
- The most important factors are reach and frequency measurement (82% ranked it the most important capability); ad viewability (73%); and data management platforms (62%).
Customer Acquisition and Brand Building Are Top Goals
- The most highly ranked campaign objective was customer acquisition, which was associated with mid- and low-funnel strategies that favored digital media channels like search.
- In second-place was brand building, which was associated with top-funnel strategies, which favored traditional media channels like TV and radio.
Channel Silos Contribute to Waste and Poor Customer Experience
- 36% of our respondents still work in companies that operate in swim lanes, where each primary media channel has its own team focused on hitting their own numbers.
- If these channel-specific teams aren’t sharing data, consumer experience suffers and media waste becomes unavoidable.
The Search for Integrated Data and a Cross-Channel Approach
The Nielsen report demonstrates that many brands and agencies are doing their best to adapt to the increasing complexity of the marketing landscape, but are not quite there yet.
While 62% of respondents reported being organized in a way that supports an omni-channel approach with unified reporting structures and revenue goals, many describe the need for integrated data sets and cross-channel media planning in order to understand ROI as a whole and on a per-channel basis.
CMOs want simple, actionable intelligence that can be applied easily to improve performance, reduce media waste, and align disparate marketing teams to create the best customer experience possible.
Download your copy of The Nielsen CMO Report 2018.
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