Chief marketing officers are betting big on mobile ads, planning to increase spending a “whopping” – to use the survey’s own word – 160 percent over the next three years. Yet they are doing so despite questions about how effective mobile ads are, says a
new survey from the Chief Marketing Officer survey from Duke’s Fuqua Business School.

In a survey published Tuesday, 255 marketing leaders say they are bumping up mobile ad spend to 15.6 percent of total spending from the current 6 percent.

Overall, social media spending gets some 10.7 percent of marketing budgets, yet that percentage also is projected to surge, hitting 23.8 percent over the next five years, the CMO survey says.

Why so much on mobile?

“This whopping 160% increase reflects a growing reliance on mobile to interact with customers where they look for information and make purchases,” the survey says.

“On top of it, companies hope to reach customers closer to the time of purchase in order to make them aware of offerings, deals, and additional information that may help close more sales.”

Yet despite the spending commitment, data from the CMO Survey shows what it calls “only modest success.”

“Despite these hopes, marketing leaders report only modest success in the impact of mobile marketing activities. When asked to rate the performance of their company’s mobile marketing activities on a scale from 1-7 where 1=poorly and 7=excellent, Figure 1 shows the current gap with only customer engagement breaching the halfway mark, while delivering your brand message, customer acquisition, customer retention, sales, and profits all falling below average.”

(See graphic with this post)

Why the big shift?

The CMO survey didn’t ask that question but offers advice on how the additional money should be invested.

“The CMO Survey did not ask how marketing leaders plan to invest the huge increase in mobile spending over the next three years, but it is clear that allocating a large portion of it toward understanding and managing the impact of mobile is essential.

“As with other aspects of business, it is not the size of your budget that matters, but how you manage the investment to create and leverage critical customer, brand, and financial outcomes.

“Among the most important steps are fundamentals of marketing strategy, including selecting your target customer, developing and communicating a benefit that meets customers across all aspects of your marketing, including mobile, and then figuring how to reach and engage customers at the right time and in the most effective ways. Importantly, marketing leaders should not forget that poor mobile marketing can harm your brand and your relationships with customers.”

Other findings

The survey, which launched in 2008 and is conducted twice a year, also disclosed that marketers are “finally showing signs of integrating the surge in social media spending with their wider marketing strategies.”

CMOs also expect to spend more on marketing analytics “even though they still struggle to find the best use for customer data.”

“The integration of social media and marketing strategies is finally showing a slight lift after years of stagnation,” said Christine Moorman, a professor at Duke University’s Fuqua School of Business and director of The CMO Survey. “But companies are still struggling to objectively assess the value they are getting from their social media investments.”

Other findings:

  • “Spending on digital marketing overall is expected to increase by 12.2 percent, with marketers predicting the amount spent on traditional advertising will fall by 2.1 percent — a trend the survey has observed for the last several years.
  • “Marketers remain optimistic about the U.S. economy, but their predictions have softened slightly, with 74 percent of respondents expecting to acquire more customers — 4 percentage points lower than in February — and 69 percent expecting customers to buy more goods and services, down 3 points.
  • “Hiring growth in the marketing sector is expected to increase 6.6 percent in the next year, reversing a three-year slide.
  • Marketing budgets are expected to grow by 5.5 percent in the next year, continuing positive fluctuations in their growth rates.
  • “Marketing spending represents 6.6 percent of company revenue, maintaining a downward trend, and about 11 percent of overall budgets.”

For more analysis of the survey, see: