IDC CMO FutureScape: Predictions for 2016 and the Digital Transformation

Think marketing has already experienced the biggest impact from digital transformation? Think again. IDC CMO Advisory Service predicts that CMO jobs will turnover 25% per year; that 20% of marketers will blow up their funnel; and that cognitive marketing as a mainstream practice is not far away.

Here are our most recent predictions.

  1. By 2017, CMOs will spend more on content marketing assets than they do on product marketing assets. For decades, the product launch has reigned as the kingpin content event. With a “bill of materials” stretching through multiple Excel pages, product marketing assets suck up a major portion of the marketing budget – and much of that content is wasted. The days of product content dominance are numbered. Product content will remain important but it will take its place behind the content marketing assets matched to decision-journey stages.
  2. By 2020, 50% of companies will use cognitive computing to automate marketing and sales interactions with customers. A few leads go right to sales. But the majority need further qualification and extended nurturing. Companies will increasingly turn to smart systems that automatically assess and respond to buyers at the point of need.  IBM recently added Watson to its marketing cloud offerings. The question is not when cognitive marketing will become mainstream – but rather, will anyone notice?
  3. By 2017, 20% of large enterprise CMOs will consolidate their marketing technology infrastructure. Marketing has been absorbing marketing technology a bite at a time for more than a decade. Many organizations now manage dozens (if not hundreds) of point solutions. Just as marketing environments are hitting the wall of this operational complexity, marketing tech vendors are building solid integrated platforms – tailorable through a partner eco-system. A fortuitous convergence of supply and demand.
  4. By 2020, 33% of CMOs will outsource some digital marketing activities via marketing-as-a –service. Marketing-as-a-service is a bundle of technology and marketing services that enable world-class digital marketing capabilities to be outsourced. MaaS offers CMOs an attractive, viable alternative to owning (and operating) everything.
  5. By 2018, predictive analytics will be a standard tool for marketers, but only a third will get optimal benefit. Early adopters of predictive analytics for buyer behavior report amazing results. The benefits come from the ability to discover hidden segments that have a high propensity to buy. Marketers can also better serve these segments with behavioral targeting. However, the majority of marketers face big challenges to achieving the benefits.  Chief inhibitors? Lack of statistical skills, stubborn organizational silos that won’t integrate data, and a culture that resists truth when it goes against tradition.
  6. In the tech industry, CMO job turnover will continue at the rate of 25% per year through 2018. In 2015, 59% of tech CMOs in companies larger than $50 Million in revenue had been in their job for less than two years. Some CMOs get pulled out of their job. The best and brightest get invited to join hot growth companies or exciting tech businesses sprouting as divisions in other industries. Other CMOs get pushed out. Some just can’t live up to the requirements of digital transformation. Others are discarded by laggard CEOs who just don’t understand modern sales and marketing.
  7. By 2020, 20% of marketers will abandon the traditional funnel in favor of a customer-centric model. The light of data increasingly reveals the reality of buying behavior. That same light also reveals major flaws in the traditional funnel. The sales funnel is 114 years old and never meant for the digital era. Rabid funnel advocates cling to the past with ridiculously convoluted updates. But making the funnel more complex with extra loops and stages just puts lipstick on the proverbial pig. Forward-leaning companies now experiment with customer-centric models that respond to real buying challenges in innovative ways.
  8. By 2017, 60% of CMOs will lag in implementing recommended benchmarks for marketing technology staff investment, increasing the rift between the CMO and CIO. Marketing is the fastest growth area for new technology investments, with growth projected at an average 9% per year through 2018. Given this situation, you might expect marketing to be ahead of the curve – leading the way towards technology investment and staffing. However, IDC believes that tech marketers are underspending and under hiring. Only 2.6% of marketing program dollars go towards technology and only 1.6% of marketing staff are primarily tech.
  9. In 2016, 70% of companies offering cloud or digital services will increase investment in post-purchase marketing. Marketing is primarily associated with the early stages of the buyer’s journey, the stages IDC calls Exploration and Evaluation. However, as the ownership economy evolves into a service/sharing/experience economy, companies will find that they need to market throughout the entire customer experience. For example, the fastest growing cloud software companies (those with 20%+ annual growth) have a more holistic approach. They spend about 16% of their total marketing budget on post purchase marketing.
  10. By 2018, 50% of CMOs will make significant structural changes to their “intelligence” operations and organizations.  “Intelligence” as a capability is growing in importance in modern marketing organizations. Intelligence includes market intelligence (MI), business intelligence (BI), competitive intelligence (CI), and social intelligence (SI). In the past, these four functions were spread around the enterprise. Now, IDC sees more companies consolidating into a larger, single, intelligence group – often combining with intelligence functions from other areas like sales. The elimination of silos in this important area is a positive sign.

For more information, check out our free webcast of the report highlights or download the full report. [Report download may require subscription].

 

IDC’s 10 Predictions for CMOs for 2015

What does IDC predict for tech CMOs and their teams in 2015 and beyond?

Our recent report IDC FutureScape: Worldwide CMO / Customer Experience 2015 Predictions highlights insight and perspective on long-term industry trends along with new themes that may be on the horizon. Here’s a summary.

1: 25% of High-Tech CMOs Will Be Replaced Every Year Through 2018
There are two dominant drivers behind the increased CMO turnover over the past two years. One driver centers on the cycle of new product innovations, new companies, and new CMO jobs. The second (but equal) driver centers around the required “fit” for a new CMO in the today’s tumultuous environment and the short supply of CMOs with transformational skill sets.

Guidance: Everyone in the C-Suite needs to “get” modern marketing to make the CMO successful.

2: By 2017, 25% of Marketing Organizations Will Solve Critical Skill Gaps by Deploying Centers of Excellence
The speed of marketing transformation and the increased expectations on marketing have left every marketing organization in need of updating its skill sets. In the coming years, CMOs will not only have to recruit and train talent but also create organizational structures that amplify and share best practices. Leading marketing organizations will become masters of the centers of excellence (CoE).

Guidance: Get out of your traditional silos and collaborate.

3: By 2017, 15% of B2B Companies Will Use More Than 20 Data Sources to Personalize a High-Value Customer Journey
Personalization requires a lot of data. CMOs do not suffer from a lack of data — quite the contrary. Today’s marketer has dozens, if not hundreds, of sources available. However, companies lack the time, expertise, and financial and technical resources to collect data, secure it, integrate it, deliver it, and dig through it to create actionable insights. This situation is poised for dramatic change.

Guidance: One of your new mantras must be – “do it for the data”.

4: By 2018, One in Three Marketing Organizations Will Deliver Compelling Content to All Stages of the Buyer’s Journey
CMOs reported to IDC that “building out content marketing as an organizational competency” was their #2 priority (ROI was #1). Content marketing is what companies must do when self-sufficient buyers won’t talk to sales people. While it’s easy to do content marketing; it’s hard to do content marketing well. The most progressive marketing organizations leverage marketing technology and data to develop a buyer-centric content strategy.

Guidance: Remember that it’s the buyer’s journey – not your journey for the buyer.

5: In 2015, Only One in Five Companies Will Retool to Reach LOB Buyers and Outperform Those Selling Exclusively to IT
IDC research shows that line-of-business (LOB) buyers control an average of 61% of the total IT spend. LOB buyers are harder to market to and are even more self-sufficient than technical buyers. To succeed with this new buyer, tech CMOs must move more quickly to digital, incorporate social, broaden the types of content, and enable the sales team to maximize their limited time in front of the customer.

Guidance: Worry less about how much video is in your plan and worry more about your message.

6: By 2016, 50% of Large High-Tech Marketing Organizations Will Create In-House Agencies
Advertising agencies have been slow to recognize the pervasive nature of digital. While many digital agencies exist and many have been acquired by the global holding companies, these interactive services typically managed as just another part of the portfolio of services the agency offers. Modern marketing practitioners realize that digital is now in the DNA of everything they do and are ahead of their agencies.

Guidance: Don’t wait. Take the lead.

7: By 2018, 20% of B2B Sales Teams Will Go “Virtual,” Resulting in Improved Pipeline Conversion Rates
Buyers won’t talk to sales until late in the game. But for B2B companies, a completely digital solution may not be answer either. Some solutions are so new, so complex, or customized that a human concierge must intervene. Enter the “virtual” sales rep. This emerging hybrid of marketing, sales and tech service is a far cry from the historical “me and my quota” sales rep. Think of them as a B2B Genius Bar. CMOs must equip the virtual sales rep with success tools.

Guidance: Find the fledgling “virtual” reps in your company and make them heroes – and make yourself one in the process.

8: By 2017, 70% of B2B Mobile Customer Apps Will Fail to Achieve ROI Because they Lack Customer Value-Add
Apps are maturing rapidly into utilities that can greatly enhance customers’ personal and professional lives. Brand value is being redefined by value-added services such as monitoring, reporting, best practices, communities, and guidance. Nearly every brand has an app today. But not all apps are created equal. Some apps provide tremendous value, and others will end up on the island of mobile misfits. 

Guidance: Allow your competitor’s app to be the “go to” resource and you are essentially locked out of that consumer’s life.

9: By 2018, 25% of CMOs and CIOs Will Have a Shared Road Map for Marketing Technology
The CMO and CIO relationship will shape the future of both roles. CMOs must accept that their infrastructure is more effective when it is integral to enterprise IT. CIOs must reinvent their missions to support unprecedented innovation in line-of-business IT.  CMOs and CIOs must work together for vendor selection, data governance, backup and recovery, security, and a host of other issues.

Guidance: CMO and CIO should jointly lobby the CEO to overinvest in marketing technology.

10: By 2018, 20% of B2B CMOs Will Drive Budget Increases by Attributing Campaign Results to Revenue Performance
With the sharp lessons of the Great Recession still fresh in their minds, CEOs and CFOs want to make sure every dollar leads to results. If marketing can achieve full revenue attribution promise, this will not only to satisfy demands for accountability but will result in budget increases. But marketing’s path to full attribution requires a complex orchestration of technology, data, and marketing skills and can’t be accomplished without partnerships with IT, sales, and finance.

Guidance: Start with attribution of individual campaigns and tactics and eventually you’ll build this Holy Grail.

IDC 2014 CMO Predictions

The Chief Marketing Officer cannot avoid broader responsibility as the digital customer experience bursts traditional boundaries. IDC predicts that by 2020, marketing organizations will be radically reshaped. The core fabric of marketing execution will be ripped up and rewoven by data and marketing technology.

What actions will you take in 2014 to gain the most from this future opportunity? Here are the IDC CMO Advisory Service views on the long-term industry trends and new themes that may be on the horizon that will most impact the role of the CMO.
 
To hear more, listen to a replay of our December 17th webinar.
  • Prediction 1 – The CMO role becomes “open for definition” as today’s CMO job description becomes considerably more complex and critical.
  • Prediction 2 – Innovative CMO and CIO pairs will throw out the rule book when it comes to IT’s support of Marketing
  • Prediction 3 – By 2020, the Marketing function in leading companies will be radically reshaped into three organizational “systems” – content, channels, and consumption (data)
  • Prediction 4 – The best marketers will understand that “Content Marketing” does not equal “Thought Leadership”
  • Prediction 5 – Multi-channel coverage becomes an opportunity and a challenge area, as CMOs integrate media silos
  •  Prediction 6 – 80% of customer data will be wasted due to immature enterprise data “value chains”
  •  Prediction 7 – By the end of 2014, 60% of CMOs will have formal recruiting process for people with data skills
  • Prediction 8 – Only 20% of marketers will receive formal training on analytics and customer data management
  • Prediction 9 – Fragmented marketing IT point products and low adoption rate will inhibit companies’ ability to win customers
  • Prediction 10 – Digital marketing investment will exceed 50% of total program budget by 2016