This article is part of our July series about the state of media and entertainment. Click here for more.
As marketing leaders head into next year’s business planning and budgeting season, understanding the marketing and media landscape takes on added significance. Enter the Nielsen 2018 CMO Report, which examines how marketers are navigating digital transformation and allocating their resources.
The study comprises a survey of 165 mostly director-level or above respondents, as well as one-on-one interviews with five global CMOs from a range of industries. Topics include media cost, ROI measurement, campaign strategy, new martech tools, data sets, social media, omnichannel integration, transparency, and effectiveness.
CMO.com: This is Nielsen’s first CMO study. Why now?
Solomon: We are in the Nielsen Watch business, which is focused on media measurement. In the past few years, we’ve seen CMOs from the largest brand advertisers in the world become more outspoken about concerns they have with the role, delivery, use, effectiveness, measurement, and other topics around media, particularly digital media and brand advertising. So we decided to dig deeper into these topics to better understand the issues, concerns, beliefs, and expectations around media, as well as understand other key topics for marketers today. We did this for our clients, the industry, and for our internal use to inform Nielsen’s product development. This CMO report sets a baseline, as we hope to do this study annually to understand how things are changing over time and why.
CMO.com: What was the overall takeaway from the study?
Solomon: Overall, we saw that marketers are feeling the pressure and difficulty of getting their arms around how to deal with media and data fragmentation and the complexity of today’s media options. They are struggling with tools, technology, data, analytics to measure ROI, effectiveness, and attribution as they now have responsibility to report marketing ROI and delivered value to the C-suite. They feel this despite the promise of abundant data available. Things have not come together in a holistic, useable, simple way for marketers yet.
House: We also heard from our CMO interviews and study respondents that media fragmentation has created department silos in organizations where objectives, data, and revenue goals aren’t integrated and aligned. For example, the average marketing group has 59 different martech point solutions, many of which are not integrated. This is a problem to be solved. We clearly heard from people that they need help to operationalize a non-siloed, integrated process where all marketing departments can look at data across mediums in comparable ways, apples-to-apples, with a consistent methodology.
CMO.com: What are some of the organization issues uncovered around marketing and media allocation?
Solomon: If you were outside the marketing and media industry looking in and believed that because we live in a world where there is an abundance of available data and therefore one can connect media exposure to a sale and then measure and evaluate all marketing activities on their ability to drive sales, then you would be incorrect. The study uncovered that this is not true yet. There is also a bifurcation of budget spend between the media budget and the trade budget, so getting consistent ROI measurement on what is driving sales to optimize across tactics is hard to do.
House: This is one of the reasons why we saw that 25% of respondents said they were not comfortable calculating ROI across their digital and traditional media mix. You also have different departments wanting to claim credit for achieving specific ROI. We did hear that 79% of marketers are planning to invest more in analytics and attribution tools over the next year because they know they need to work their way through these issues.
CMO.com: What are some other insights that have important implications?
Solomon: Something noteworthy that we saw was that 43% of CMOs and marketers are actually pretty pleased with their agencies and were planning to increase spend going forward. My take on this is that agencies still have a big role to play to help their clients navigate the media issues and complexities we’ve discussed.
House: Marketers are continuing to hire more specialized agencies to help them navigate digital transformation. They need relevant creative versions developed efficiently and quickly, while managing costs for specific media channels that each have different creative objectives.
CMO.com: What did you uncover related to the sales funnel?
Solomon: In the past year, it has become increasingly clear that marketers are trying to align their media tactics to their strategy. For the past several years, there was a rush to shift to digital because that’s where the audience was going and spending a lot of time. But in discussions we’ve had with CMOs, we’ve been hearing that they recognize they still need big reach media like TV to generate awareness and brand building to fill the top of the funnel. They are aware that they may have overtargeted their audience on digital. So some spend is shifting back to TV to have a better balance between digital and traditional media tactics and strategy.
CMO.com: What did CMOs say their most important marketing objectives are, and how are they realigning their marketing budgets and activities to achieve these?
House: Overwhelmingly, the No.1 marketing objective was customer acquisition. This is where digital is impactful. The report highlighted that 82% of respondents are planning to increase their digital budgets by about 50% in the next year. This planned spend aligns with how highly they rank customer acquisition. If you are a CMO with responsibility for business results, you need to show results for aquiring new customers and new sales.
The second-highest ranked objective was brand building, which is focused on the top and middle of the funnel. It’s needed to fill the pipeline and generate the number of customers you need to achieve your goals. This is where mediums like TV and radio play a big brand-building and reach role.
CMO.com: You are just back from the Cannes Lions. Relative to your CMO report, what did you hear?
House: I attended a few panels, and a theme I heard several times was the need for data to inform creative. The data scientist and the art director should be talking with each other to inform the creative. Agency folks spoke of the need to use machine learning to be able to create versioned creative that adapts to meet different types of consumer needs.
CMO.com: Where are CMOs placing big bets on technologies?
Solomon: We are seeing some big bet investments on analytics, attribution, and data management platforms to better connect activity to ROI.
CMO.com: Looking out five years, what changes will we see from Nielsen’s 2023 CMO Study?
Solomon: We will likely see a continued consolidation in media across the traditional and digital landscape, and there will be fewer media companies. This will create more walled gardens of media. With fewer media providers, this could increase media costs. There will continue to be the need to understand what is happening across the media options, which will likely require more investment to enable this analysis. Marketers will continue to invest in their own customer data acquisition and management capabilities so they are not locked out of direct relationships with their customers. The biggest value is in the customer data.
House: We will continue to see evolution toward having a unified media strategy across digital and traditional. The line between traditional and digital will become much fuzzier. This will simplify measurement, improve the ability to track behavior across linear and digital, and marketers–as a result–will become more channel-agnostic. We’ll also see a consolidation and simplification of marketing technology.
CMO.com: What are your headline comments for becoming a better 21st century CMO?
Solomon: Invest in the right technology to better integrate your stack and invest in the right data, particularly the quality of the data and where it is coming from. Do the best you can to break down internal silos to have a true omnichannel, customer-centric approach. There are also things that are still true from the past, like making sure your tactics are aligned with your strategies. Don’t just go after the next shiny object.
House: Take control of your data, get it integrated and in one place, and create a workflow that enables multiple departments to plug into the single data source. This will help break down silos and align goals.