Chief marketing officers are overwhelmingly optimistic about the U.S. economy's outlook, a new survey reveals. When asked if they were more or less optimistic about the overall U.S. economy compared to last quarter, the optimists outweighed the pessimists 8 to 1.
The 269 US CMOs who took part in the survey were also asked to indicate their optimism for the overall U.S. economy on a scale of 0-100, with 0 being the least optimistic. Their overall optimism level came in at 63.4, an 11-point increase from the last time the survey was conducted in August 2011 at the height of the national debt crisis. This also represents a 16-point increase from the survey's low of 47.7 in February 2009.
"CMOs have strong confidence in the underlying customer dynamics central to any economic recovery," said Christine Moorman, a marketing professor at Duke University's Fuqua School of Business and the director of The CMO Survey. "They predict an increase in the number of customers entering markets, purchase volume and likelihood of buying a range of related offerings from companies. These figures paint a very positive view of the economic landscape."
Rounding out the bullish sentiment, the marketer's optimism for their own company exceeded that of the overall economy (72.8, compared to 63.4 for the overall U.S. economy).
To ensure growth, marketers continue to expect an upward trajectory in international sales. Over the next year, the survey respondents expected to see 32.4 percent of their company sales coming from global markets. In August 2011, this figure was 24.7 percent and in August 2010 it was 18.7 percent.
Western Europe continues to be the highest revenue growth market at 23 percent, despite the continent's recent economic troubles. Canada is a close second at 32 percent. However, there is even greater growth among companies focusing on emerging markets. Specifically, companies focusing on India are experiencing 48 percent growth, China 35 percent, the Middle East 26 percent, Brazil 25 percent, and Eastern Europe 25 percent.
Marketers are continuing to increase spend on social media. In the next 5 years, marketers expect to spend 19.5 percent of their budgets on social media, almost three times more than the current level of 7.4 percent. Human resources dedicated to social media also have increased dramatically in the past year. On average, 9 people are employed in-house to work on social media, while 4 individuals from outside vendors are involved in the company's social media activities. A year ago, these figures were 5.3 in-house and 1.8 from vendors outside the company.
However, CMOs believe that much can be done to improve the integration of social media with the firm's marketing strategy. Only 7 percent of respondents believe that social media is "very integrated" to the firm's strategy (the highest rank for the question) and the average integration score is the same as a year ago.
"Closing this 'integration gap' is a huge challenge facing companies today," Moorman said. "If the gap is breached, social media will take its place in the pantheon of effective marketing strategies. If not, social media will not live up to its potential to generate return on investment."
More trouble could be ahead for traditional advertising, according to the CMOs. The percentage of spend on traditional advertising is expected to plummet 161.5 percent over the next 12 months. On the positive side, spending on Internet marketing is expected to rise 14.3 percent over the next year.
"This evolution tracks well with the role the web is playing in customers' lives," Moorman noted. "Advertisers want to spend on media that their customers are paying attention to on a regular basis. We should expect this freefall to hit an equilibrium level at some point in the next few years. But until then, agencies will need to continue to morph their capabilities toward the web in order to survive."
Founded in August 2008, The CMO Survey collects and disseminates the opinions of top marketers two times per year.