2015 CMO Digital Benchmark Study

2015 CMO Digital Benchmark
Study
Findings and Considerations to Accelerate
Growth In the Digital World

Table Of Contents
Page 3: Background
Page 8: Executive Summary
Page 10: Key Findings
Page 29: Insights into the Marketing/IT Relationship
Page 34: Implications and Considerations
Page 37: About the Researchers
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Background
The Leapfrog Marketing Institute released its second CMO Digital Benchmark Study in
Q3 2014. The study continued the exploration that began with the first CMO
Benchmark Study in 2009, gauging how senior marketers were navigating the evolving
digital space.
The 2014 study’s key learning was that marketers’ perceived organizational challenges
were hampering their ability to market with the speed, personalization and analytics
needed in a digital world. The 2015 study is built to quantify the cause of these
challenges.
Given this is a broader organizational issue, this year’s participant pool also includes
technology/operations executives who support digital and omnichannel activities.
This study shares the insights gathered from the survey fielded in Q3 2015, and
provides key findings and implications for marketers to drive financial success in an
increasingly complex digital world.
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About The Leapfrog Marketing Institute
The Leapfrog Marketing Institute is a virtual institute focused on nurturing thought
leadership and commentary about digital marketing, with a specific focus on the mobile
consumer and digital commerce.
The Institute publishes white papers, research reports and insights; hosts workshops,
panels, and roundtables for CMOs and industry influencers. Its research has been
featured in publications including Advertising Age, eMarketer, The Economist and CIO
Magazine.
The Leapfrog Marketing Institute is powered by Leapfrog Online, one of the largest
digital marketing companies in the United States.
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About The Researchers
The 2015 CMO Benchmark Survey Prepared, Fielded and Analyzed for the Leapfrog
Marketing Institute by:
• Jim Carey: Adjunct Professor, Northwestern University Medill School of Journalism, Media,
Integrated Marketing Communications
• Gary Lancina: CMO, LUMA Institute
Full biographies are available on page 37
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Survey Respondents
# of Employees
Company Revenue
Marketing Budget
20%
8%
72%
3,000+
1,000-2,999
500-999
16%
15%
69%
$1B+
$500MM to just
under $1B
$50-499MM
23%
31%
28%
18%
$100MM+
$25 - 99MM
$5MM to $24.9MM
$1MM to $4.9MM
• 131 US executives, director level or higher
• 81% in Marketing functions; 19% in IT functions
• Must be responsible for, or influence, the development of digital/mobile strategy/tactics, and the
identification and selection of outside resources to support those efforts
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Industries Represented
Financial Services
23%
31%
Consumer Products
Retail/E-Store
3%
5%
9%
9%
9%
12%
Technology
Healthcare/Pharma
Telecom/Media
Business Services
Other*
* “Other” includes hospitality, education, manufacturing, and energy
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Executive Summary

Executive Summary
In the 2014 CMO Digital Benchmark Study, marketers expressed confidence in their digital skills but were concerned with the
organizational agility required to achieve their financially-oriented goals. This year, we explored this concern deeper, and also
surveyed IT executives to understand their relationship with marketing and the greater business challenge.
A few key learnings:
• Digital and mobile continue to evolve into a true commerce channel from primarily brand awareness – 20% lift since 2014.
• Twice as many marketing budgets decreased this year compared to 2014. Of those that increased, the change was
modest – the majority (60%) grew less than 10%, a significant drop from 2014.
• Marketers continue to view websites/mobile, data/analytics and SEM/SEO as the most important capabilities to achieve
financial-driven objectives. These capabilities are primarily handled internally, and considered highly underdeveloped.
• Omnichannel marketing is still the least developed capability, even with a 50% lift over 2014. This is a large concern given
the expectations of the always-on consumer and increasing mobile usage/commerce.
• Both Marketing and IT believe they have an omnichannel presence, though IT executives view it as lower importance, yet
better developed, than their marketing counterparts. This is a key challenge.
• Mobile-First environment reported by 50% of IT executives, a dramatic change given the rise of smartphones.
• Further analysis of the IT/marketing relationship reveals that marketers believe working closer with IT strengthens their
bonds. IT has the opposite perspective.
• Marketing and IT agree on one thing – 63% state metrics and goals are not aligned across the functions. Marketers view
IT’s budget, priorities and objectives as issues; IT views marketers’ knowledge, communication and budget as issues.
• The study findings clearly define the need for CEOs to solve this structural/cultural challenge to win in a digital world.
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Survey Findings

The Role of Digital Channels in Generating Revenue vs.
Brand Awareness Continues to Grow
92%
59%
64%
69%
67%
43%
51%
47%
57%
2015
2014
2009
25%
Only Web
researched
in 2009
To build brand awareness -
Mobile
To build brand awareness -
Web
To Generate Revenue -
Mobile
To Generate Revenue -
Web
Responses to closed-ended question: In which of the following ways does your company use the digital and mobile channels?
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Since Last Year, More Than Half of Marketing Budgets Have
Decreased or Remained the Same
Percentage of decreasing budgets nearly double those of last year
Increased
43%
51%
Stayed the Same
40%
41%
2015
2014
Decreased
9%
17%
Responses to closed-ended question: Has your total marketing budget increased or decreased for the current year?
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Nearly 2/3 of the Budgets that Increased in 2015 Have
Increased by 10% or Less
Large YOY drop in 10%+ Budget Increases, with exception at highest tier (50%)
>50%
25%-49%
4%
8%
11%
13%
2015
2014
10%-24%
16%
31%
5%-9%
38%
46%

The Need for Marketing Budgets to Deliver Measurable
Financial KPIs Continues to Grow
Financial Metrics – Sales/ROI
63%
69%
2015
2014
Awareness/Engagement Metrics
31%
37%
Responses to closed-ended question: Which of these marketing objectives is most important to you?
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Marketers Have Built Their Own Expertise in a Few Digital
Areas (Mobile, Social & SEM), but Omnichannel Still Lags
Mass (Offline Ads)
38%
44%
Data Tracking/Analytics
32%
41%
Mobile/Web
23%
40%
Social
Retail
SEM/SEO
9%
16%
27%
27%
31%
2015
2014
Programmatic
22%
Call Center
Omnichannel
12%
18%
16%
15%
Responses to closed-ended question: How much experience do you personally have in each area?
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The Most Important Areas are the Same as 2014, and have
Grown in Importance: Data/ Analytics, Mobile, and SEM/SEO
Extremely Important to Achieving Marketing Objectives
Data Tracking/Analytics
43%
60%
Mobile/Web
34%
52%
SEM/SEO
26%
43%
Omnichannel
35%
2015
Social
29%
34%
2014
Call Centers
21%
25%
Mass (Offline Ads)
21%
27%
Programmatic
20%
Responses to closed-ended question: How important is each area to help you achieve your marketing objectives?
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These Three Critical Capabilities are Primarily Managed
Internally, but Internal Management of Mobile has Declined
Capabilities Managed Internally
Analytics
Websites
Call Center
Social
Mobile
SEM/ SEO
Direct
Mass (Offline)
36%
43%
58%
53%
49%
55%
65%
67%
83%
76%
78%
77%
79%
75%
80%
72%
Responses to closed-ended question: Are the following marketing capabilities handled internally or externally?
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The Internal Development Gap in the Key Areas Needed to
Achieve Objectives is Even Greater than in 2014
Analytics
31%
43%
Mobile/Web
24%
38%
Omnichannel
SEM/SEO
16%
22%
26%
29%
2015
2014
Social
21%
23%
Call Center
(12%)
3%
Offline
(13%)
(8%)
(20%) (10%) 0% 10% 20% 30% 40% 50%
Responses to closed-ended questions: How important is each area to help you achieve your marketing objectives? How well
developed is each area in your organization?
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The Ability to Track Digital Activities to Sales is Significantly
Worse than in 2014 – Down 33%
46%
Yes 2015
68%
2014
0% 10% 20% 30% 40% 50% 60% 70% 80%
Responses to closed-ended question: Can you track digital activities to sales?
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Omnichannel is Still the Least Developed Capability,
Surprising Given the Heightened Focus in the Marketplace
Capabilities Ranked from Least Developed to Extremely Well Developed
Omnichannel
4%
6%
Social Media
8%
11%
Mobile
SEM/SEO
10%
10%
14%
18%
2015
2014
Analytics
12%
17%
Call Centers
18%
27%
Mass (Offline Ads)
34%
35%
Responses to closed-ended question: How well developed is each area in your organization?
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Only 40% Report Omnichannel Integration Across The
Purchase Path (Online/Offline), Relatively Flat Since 2014
Digital and Offline Integration Still Lags
Integrated
39%
41%
2015
2014
Intermediate or
Less
58%
61%
Responses to closed-ended question: How well integrated are your digital and offline marketing
communication channels in providing a path to purchase?
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IT Executives Believe Omnichannel Experiences are Better
Developed than Do Marketing Executives
Marketer
19%
54%
20%
7%
IT
30%
30%
33%
7%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Not at all well-developed Less well-developed Developed Extremely well-developed
Responses to closed-ended question: How well-developed is an omnichannel consumer experience in your company?
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Though Both Marketing and IT Executives Believe They
Deliver An Omnichannel Experience
Marketer
46%
54%
IT
50%
50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
Responses to closed-ended question: Is your company executing on an omnichannel consumer experience now?
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IT Executives Place a Lower Importance on An
Omnichannel Experience than Do Marketing Executives
Marketer
5%
18%
49%
27%
IT
17%
23%
33%
27%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Not At All Important Less Important Important Extremely Important
Responses to closed-ended question: How important is an omnichannel consumer experience for your company?
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Over 60% of Both Marketing and IT Executives Believe the
Rise of Mobile has had an Impact on Driving Sales
Almost twice as many IT executives state mobile has had a high impact
Marketer
5%
31%
48%
16%
IT
26%
6%
39%
29%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No impact at all Less impact Some impact High impact
Responses to closed-ended question: How much impact has the rise of the mobile (smartphone/tablet) channel had
on driving sales?
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Approximately 50% are Building a Mobile-First
Environment—a Dramatic Shift Given the Rise of Mobile
Marketer
51%
6%
43%
IT
45%
6%
48%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No Unsure Yes
Responses to closed-ended question: Is your company building a Mobile-First environment?
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Twice as Many IT Executives State a Mobile-First Environment
is Having a Significant Impact on How they Operate
Marketer
30%
53%
16%
IT
20%
47%
33%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Not much Somewhat Significantly
Responses to closed-ended question: Has developing a Mobile-First environment changed the way you operate?
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Of Those Not in a Mobile-First Environment, Marketers
Have Twice the Interest Than IT Executives
Over 10% of Marketing Executives Expressed High Level Interest
Marketer
34%
41%
14%
11%
IT
38%
50%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Not much
Yes, but not at a high level
Some interest, but not a current priority
Seriously, and at a high level
Responses to closed-ended question: If you are not building a Mobile-First environment, is it being discussed?
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Insights into the Marketing/IT Relationship

Marketing Executives Believe the Relationship is More
Collaborative & Productive than Do IT Executives
Marketer
2%
15%
53%
30%
IT
6%
19%
61%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Not at all collaborative and productive
Somewhat collaborative and productive
Not usually collaborative and productive
Very collaborative and productive
Responses to closed question: How would you describe the relationship between Marketing and IT in your company?
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5x as Many Marketers Believe the Relationship is
Significantly Better Aligned than Do IT Executives
Marketer
0% 4%
77%
20%
IT
4%
4%
88%
4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Significantly worse alignment Somewhat worse alignment Somewhat better alignment Significantly better alignment
Responses to closed-ended question: Has working together on data-driven or technology-driven programs improved
alignment between marketing and IT?
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Both Fully Agree They are Not Aligned on the Same
Incentives or Metrics…Likely the Root Issue
Marketer
37%
63%
IT
37%
63%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
Responses to closed-ended question: Do marketing and IT share incentives or metrics for improved alignment?
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It is Not Surprising They Have Different Views on the
Barriers to Achieve Digital Success
What Does Marke-ng Say?
What Does IT Say?
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Implications and Considerations

Marketers do not appear to have made meaningful progress in advancing
their omnichannel efforts, analytics capabilities or relationships with internal
technology/operations partners on aligned goals…
All in the face of more accountable budgets, increasing ROI pressure and a
growing internal development gap on their most important business drivers.
So what to do?
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Considerations for Next 12 Months
True Customer-First Environment Given the high need/low satisfaction of mobile and
omnichannel, marketers should consider building a true customer-first environment using
behavioral analysis and modeled data that sits above channels, devices and products in
order to give the customer the personalized experience they expect.
Shared Goals with Internal Business Partners There is a clear need for marketing to
lead the development of cross-functional goals and metrics with IT, operations and other
internal partners, but recognize these partners are starting from a lower engagement level
and satisfaction with the existing relationship.
Strategic Partners Incented on Financial Metrics Given the heightened need for ROI
and budget accountability, the need for external partners to be aligned with marketers on
the same financial goals is quickly becoming the standard; trust and transparency are key
on both sides to ensure the right actions and outcomes are delivered.
Executive Team Buy-In Successful organizational transformation will require c-suite
and board advocacy. Marketers must actively and consistently share customer-level
metrics, KPI-level dashboards and immersive education programs, endorsed by your
internal business partners, to increase the likelihood of executive team buy-in.
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About The Researchers

About The Researchers: Jim Carey
As an Adjunct Professor at Northwestern University’s graduate Integrated Marketing
Communications (IMC) Program, Jim Carey has taught Direct, Database & E-Commerce
Marketing Strategies, Marketing Measurement, and analysis skills over 16 years. He brings
three decades of experience in helping companies leverage customer data to succeed in the
marketplace.
Jim now leads the development efforts of Northwestern’s Applied Neuromarketing
Consortium, leveraging advanced neuroscience and Big Data tools to understanding human
behavior. The ANC is expanding the frontiers of marketing by applying the lessons of
neurology to the issues of consumer attention, memory and reward.
Jim has held leadership positions in direct marketing agencies in New York, Boston, and
Chicago. He is Past President of the 2000-member Chicago Association of Direct Marketing,
and was named Chicago “Direct Marketer of the Year” in 2009. Over his career, Jim has helped
guide the data-driven marketing efforts of Abbott Labs, Acxiom, Diageo, Discover Financial
Services, Epson, Experian, Gateway (Acer), HSBC (Household Bank), Marriott, Motorola,
Porsche, Sears, United Healthcare and other marketing leaders.
.
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About The Researchers: Gary Lancina
As the Chief Marketing Officer of the LUMA Institute, Gary Lancina guides development and
implementation of strategies to accelerate growth and evolve LUMA’s product and service offers.
The LUMA Institute equips individuals, teams, and organizations to accelerate innovation and
deliver new, lasting value.
Prior to joining the LUMA Institute, Gary held senior leadership positions in Marketing and Retail
Innovation for BP Products North America. He led teams responsible for Consumer & Customer
Insights, continual enhancement of the BP Consumer Experience and Value Proposition, and
Fuels Product Management. Millions of consumers buy fuel each day from BP’s US network of
over 7,000 retail sites, and the business sells over 12 billion gallons of fuel products annually.
Before BP, Gary was the Vice President of Marketing for redbox, leading the company’s overall
marketing efforts including customer experience, acquisition, and branding strategies. He
guided the brand to record awareness and market shares while increasing revenue over $330
million.
During his career, Gary also held leading marketing roles for firms such as S.C. Johnson, Rand
McNally, Master Lock, and Kohler Co. He holds an MBA from Clemson University and a BA from
Pomona College.
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Previously Released Reports
Available at leapfrogmarketinginstitute.com
Q3 2014
Q1 2015
Q3 2015
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About Leapfrog Online
For 20 years, Leapfrog (www.leapfrogonline.com) has led the industry in best practices
related to the strategic use of consumer data, understanding the consumer journey and
developing effective customer acquisition strategies that deliver business results. A datadriven
approach and a culture of innovation allow us to deliver game-changing, scalable
results for brand marketers.
Founded in 1995, Leapfrog is based in Evanston, IL and employs more than 140 data
scientists, software and systems engineers, media planners, analysts, and brand marketers.
For more information, visit www.leapfrogonline.com
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Thank You

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