By Ryan Dinger
Forty-four percent of CMOs say they faced midyear budget cuts due to the pandemic and 11 percent say they expect to face significant cuts of more than 15 percent, according to the Gartner 2020 CMO Spend Survey. Taking the pulse of 432 CMOs, the survey also found that, despite the cutbacks, 73 percent of the respondents expect the near-term negative impact of COVID-19 to be short-lived and more than half expect a return to business-as-usual performance in the next 18 to 24 months. But the CMO's rosy outlook is at odds with how CEOs view the economy post-pandemic.
The disconnect is borne out by the recent World Economic Forum survey of more than 3,500 CEOs, which shows that 60 percent of the respondents believe there will be a U-shaped recession stemming from the pandemic, meaning the recovery will last at least as long as the recession does.
So why are CMOs feeling so much more bullish about the economic outlook than their CEOs? It's a sense of opportunity — and possibly carving a path to bigger marketing budgets down the road.
"Right now, business leaders are looking to supplant revenue that may have been lost due to the pandemic," says Matthew Lieberman, CMO at PwC U.S. "That puts marketing in a really good place because we're responsible to help drive company growth. It's a chance to spotlight the impact marketing has on the business."
Elevating B2B Brands
A new opportunity for B2B marketers to demonstrate their value has led CMOs to rapidly change their marketing priorities and sharpen the focus on their most precious asset: the brand.
With 33 percent of CMOs in the Gartner study citing it as one of the three top strategic capabilities, brand strategy has risen to the top of the marketing agenda, leapfrogging from its position near the bottom on the 2019 list. Interestingly, brand strategy has even surpassed analytics in importance among marketers.
The pivot to branding seems to signify a shared understanding among CMOs about where their priorities lie, and when limited budgets force them to make tough choices about where to invest their marketing dollars. Nonetheless, Lieberman says the shift to branding is a reflection of the broader picture of 2020, not just a function of reduced budgets and an ongoing pandemic.
"In addition to the pandemic, in addition to what was a very uncertain election, in addition to all of the ongoing racial and social justice issues, there's a lot going on in 2020 in terms of the brand," Lieberman says. "And this presents an opportunity for a brand to either break out as leaders or to have some potential negative impact losing customers or revenue due to missteps."
That potential impact of losing customers could be one reason why, per Gartner, a total of 79 percent of CMOs are looking to existing markets to fuel growth in 2021. After all, focusing on maintaining existing customers is far less risky or costly than trying to land new ones, especially in the current climate.
Another reason marketers may be taking branding to a new level is the increasing amount of research showing the power of emotion — being able to communicate trust, confidence, optimism, and pride, all of which play into branding — to spur business purchasing decisions.
Consider a datapoint shared by Matthew Powell, managing director at B2B International London, a subsidiary of Merkle B2B. "You might have thought the choice between two providers who made it all the way to the last part of a potential customer's consideration journey would come down to something like price or another rational factor," Powell says. "But in fact, our research shows that half of the final decisions made by buyers, 56 percent, were based on emotional factors like trust in the brand and confidence."
Singing from the Same Tune
Shifting the focus to brand marketing presents new challenges for business marketers, who are conditioned to generate leads and count the prospects.
Marketers will need to adopt an especially demonstrative approach to ensure the C-suite understands the value they create.
Job one is to ensure that all stakeholders are singing from the same sheet by pre-establishing the metrics by which branding efforts will be measured.
"There's really no way to show progress if you're consistently using different metrics or are not focused on areas where one wants to grow," Lieberman says. "For PwC, we use a combination of both custom and analyst research to see what impact various actives are having."
Ewan McIntyre, VP and analyst at Gartner for Marketers, says another key for marketers becoming more valued within their organization goes well beyond educating stakeholders and sticking with established branding metrics. Marketers must change their own behaviors, as well, and that may be the most difficult challenge of all.
"We have to accept that we're part of the problem as marketers and change some of the behaviors," McIntyre says. "We have to think hard about educating ourselves on what it means to be a good corporate citizen. Doing things like identifying the costs that you can afford to cut and making those recommendations to build credibility. Being more fiscally mature."
He adds that altering their behavior vis-à-vis the C-suite will also help B2B marketers to better understand their own investments and get a stronger sense that they're putting their money in the most effective channels.
Another and perhaps underutilized way for marketers to demonstrate their value to C-level executives is to bring in new talent. But it has to be the kind of talent that is going to help marketers succeed in a post-digital age, such as analytics experts, web designers, and computer engineers.
What's more, B2B CMOs will also have to devote additional bandwidth to cultivating their team's ability to communicate in a way that demystifies marketing jargon and that the C-suite can understand.
"It's incumbent upon all marketing leaders to upskill their staff and empower the team to have these data-based conversations based on the marketing technology with their stakeholders," McIntyre says. "Because unless all of our marketers can clearly articulate the value, whatever we are pitching becomes dead on arrival."