Highlights & Insights,Report,FEBRUARY 2019Predicting the future of markets, tracking marketingexcellence, and improving the value of marketing since 2008,2,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,About The CMO Survey,marketing and a non-commercial service dedicated tothe field of marketing.,The February 2019 survey is the 22nd administration ofThe CMO Survey.,MISSIONTo collect and disseminate the opinions of topmarketers in order to predict the future of markets,track marketing excellence, and improve the value ofmarketing in firms and society.The survey is an objective source of information about,A D M I N I S T R AT I O NFounded in August 2008, The CMO Survey isadministered twice a year via an Internet survey.Questions repeat to observe trends over timeand new questions are added to tap intomarketing trends.,SPONSORSSponsors support The CMO Survey with intellectualand financial resources.Survey data and participant lists are held in confidenceand not provided to survey sponsorsor any other parties.,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Survey methodology,SAMPLE 2556 top marketers at for-profit U.S. companies 323 responded for a 12.6% response rate 97% of respondents VP-level or above,A D M I N I S T R AT I O N Email contact with four follow-up reminders Survey in field from January 8-29, 2019,OTHER REPORTSThis report shares key metrics over time. Two otherreports are available at cmosurvey/results. The Topline Report shows aggregate-level results Report of Results by Firm and Industry Characteristicsoffers results by sectors, size, and Internet sales Interpretive guide:M = Average; SD = Standard deviationB2B = Business-to-Business firmsB2C = Business-to-Consumer firms3,4,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Survey participants (n=323),ECONOMIC SECTOR,SALES REVENUE,Industry Sector,INDUSTRY SECTOR% Respondents,Technology (Software/Biotech),14.9%,Professional Services/ConsultingManufacturingHealthcareRetail/WholesaleBanking/Finance/InsuranceConsumer Packaged GoodsCommunications/MediaConsumer ServicesTransportation,14.6%11.5%9.9%9.9%9.3%7.8%7.1%5.0%3.4%,EducationMining/ConstructionEnergy,2.8%2.5%1.2%,16.8%36.1%15.0%32.1%B2B - ProductB2B - Services,B2C - ProductB2C - Services,1.0%7.7%4.2%7.4%11.6%7.7%16.1%11.3%,1.6%,0%,31.5%10% 20% 30% 40%,Less than $25 million,$50-100 billion$10-49 billion$5.1-9.9 billion$2.6-5 billion$1-2.5 billion$500-999 million$100-499 million$26-99 million,More than $100+ billion,5,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Survey topics,Topic 1:Topic 2:Topic 3:Topic 4:Topic 5:Topic 6:Topic 7:Topic 8:Topic 9:Topic 10:Topic 11:,Marketplace DynamicsFirm Growth StrategiesMarketing SpendingFirm PerformanceSocial Media MarketingMobile MarketingMarketing JobMarketing OrganizationMarketing LeadershipMarketing AnalyticsThe CMO Survey Award for Marketing Excellence,613192528353843465568,6,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Marketplace DynamicsMarketers sour on the economy as optimism for the U.S. economy drops to its lowest levelsince 2011, reversing a two-year bull growth cycle.Customer dynamics are expected to change to a focus on price and relationships oversuperior product quality, which had been the undisputed priority over the past severalsurvey cycles. Marketers also project the biggest gains to the following business drivers:customer acquisition, purchase volume, and cross-selling.More companies use channel partners to go-to-market in 2019. Marketers forecast strongpartner metrics all around, including increases in partner purchase volume and cross-selling.,7,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Marketer optimism drops to lowest level,Insights,B2B marketers are the mostoptimistic as are medium-sizedcompanies ($100-499 million).Percent Internet sales has little,impact on differentiating optimismamong marketers. Energy andTransportation companies are themost optimistic withCommunications/ Media companieson the other end of the spectrum.,56.5,57.8,55.6,63.3,52.2,63.4,58.4,62.7,65.7 66.1 66.4,69.9 69.7,64.4 63.7,63.2,65.8,68.9,66.8,57.0,4540,605550,7065,in 7 yearsHow optimistic are you about the overall U.S. economy on a 0-100 scale with 0 being least optimistic and100 most optimistic?8075,47.7Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb- Aug- Feb-09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19,Economic SectorB2B Product: 59.5B2B Services: 57.1B2C Product: 52.5B2C Services: 55.5,8,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,More marketers are less optimistic about the economy,reversing two-year trendAre you more or less optimistic about the overall U.S. economy compared to last quarter?,51.2%,37.1%,23.7%20.1%,34.9%34.5%30.6%,38.5%34.9%26.6%,42.5%30.9%26.6%,44.2%34.7%21.1%,11.8%,37.4%32.6%30.0%,56.2%,0%,40%20%,60%,Feb-16,Aug-16,Feb-17,Aug-17,Feb-18,Aug-18,Feb-19,MoreoptimisticNochangeLessoptimistic,Insights,Optimism drops across economicsectors, with a drastic 80% of B2CProduct companies feeling lessoptimistic. Optimism declined theleast for large companies measuredby sales revenue ($1-9.9 billion) andcompanies with 1-10% in Internet,sales. companies with no Internetsales are markedly more pessimistic.,9,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Customers prioritize price and trusting relationshipsover product quality in 2019Customers top priority in next 12 months (% of respondents),InsightsMarketers expect customers to place a,stronger emphasis on price (48%increase) and trusting relationships(44% increase) while pressures forsuperior product quality have droppedby 32%.,32.6%,22.0%,22.8%20.7%,21.3%14.8%,15.4%14.6%,21.3%14.4%,10%5%0%,30%25%20%15%,40%35%,Superior product,quality,Excellent service,Trusting relationship,Superior innovation,Low price,August 2018,February 2019,10,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,71.9%,67.3%,68.5%,52.2%,42.2%,45.0%,40%30%20%10%0%,80%70%60%50%,100%90%,Increasedacquisition ofnew customers,Increasedcustomerpurchase volume,Increasedpurchaseof relatedproductsand services,Increasedcustomerretention,Increased entry ofnew customersinto the market,Increasedcustomer priceper unit,Increased acquisition of newcustomers:,B2B Product: 71.9%B2B Services: 82.4%B2C Product: 45.8%B2C Services: 75.0%,Increased purchase volume:B2B Product: 69.6%B2B Services: 66.7%B2C Product: 66.7%B2C Services: 64.3%,Increased cross-selling:B2B Product: 69.0%B2B Services: 78.4%B2C Product: 54.2%B2C Services: 62.1%,Marketers top three projected customer outcomes: Acquisition,purchase volume, and cross-sellingDo you expect the following customer outcomes to change in the next 12 months? (% forecasting yes)Economic Sector,11,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,More companies use channel partnersto go-to-market in 2019Percent of companies using channel partners to reach market (% of respondents)*,Economic SectorB2B Product: 80.2%B2B Services: 69.9%,Industry SectorTop 3 industry sectors, Technology (Software/Biotech) Professional Services/Consulting Retail/WholesaleBottom 3 industry sectors, Education Mining/Construction Transportation,* Question asked irregularly. Full time series available shown.,78.4%,75.6%,74.6%,55.4%,54.1%,74.0%,0%,40%20%,80%60%,B2C Product: 79.2%B2C Services: 63.0%100%,Feb-11,Feb-12,Feb-13,Feb-17,Feb-18,Feb-19,12,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,InsightsConsumer Packaged Good,companies expect partner prices torise. Consequently, B2C Productscompanies expect partner volume todecrease, with more ambitiousforecasts across all other economicsectors. Tech companies expectstronger purchase volumes and,purchases of related products and,services from partners.,64%,44%,23%,22%,67%,26%,50% 50%,31% 32%,53%,23% 21%,38%,0%,60%40%20%,80%,Channel partner metrics stay high or improveForecasted channel partner outcomes in next 12 months (% forecasting yes)100%,Increased partnerpurchase volume,Increased partner purchaseof related products,and services,Increased partner powerin relationship,Increased partnerprice per unit,August 201370% 70%,February 2017,February 2018,February 2019,* Question asked irregularly. Full time series available shown.,13,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Firm Growth StrategiesMarketers still expect to drive growth through market penetration, especially B2CServices companies. Market development is more important to B2B companies.From a global perspective, domestic spending continues to account for the lions shareof global spending, with a nearly 10% increase observed since 2012. Western Europeis the largest market for international sales and the biggest forecasted opportunities liein Western Europe and China.Curiously, Internet sales dropped to the lowest levels since August 2014. B2CServices companies sell more through the Internet than any other sector, witheducation, transportation, and consumer services leading the way.,14,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Spending on growth in past 12 months*,How companies are spending to boostgrowthInvestment in growth strategies (% of companies),Spending by Economic Sector,InsightsSpending on existing markets andofferings continues to dominategrowth spending. This dominanceincreases as companies shift awayfrom product/service developmenttoward market penetration.B2C companies, especially services,are most focused on marketpenetration to grow.*% of spending for each growth strategy.,15,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Insights,Companies continue to turn inwardas they spend more on domesticmarkets over time. A nearly 10%increase has been observed since2012.,Most prone to investing budget tointernational markets areMining/Construction, ConsumerPackaged Goods, and Transportationcompanies.,Companies with a small onlinepresence (1-10% of Internet sales),also spend more on international,markets.,Domestic marketing spending continues steadyrise, is most of budgetPercent of marketing budget spent on domestic markets,77.6%,79.4%,77.5%,79.4%,85.4%,81.0%,83.0%,81.2%,84.4%,80.5%,85.0% 84.8%,87.0%,70%60%50%,90%80%,100%,Feb-12,Aug-13,Feb-14,Aug-14,Feb-15,Aug-15,Feb-16,Aug-16,Feb-17,Aug-17,Feb-18,Aug-18,Feb-19,16,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Western Europe is largest international market for sales,Which international market is currentlyyour largest (in terms of sales)?Canada:19.2%,NorthernEurope:3.8%,Brazil:1.3%,Australia & NewZealand: 5.1%,Mexico:3.8%Central,Indonesia& SE Asia:2.6%,America: 2.6%South American,Countries*: 5.1%,WesternEurope:34.6%Middle East:5.1%,Russia: 1.3%Japan:2.6%China:12.8%,*Other South American Countries excludes Brazil,17,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Which international market that youare currently not in is your biggestopportunity for the future?,China and Western Europe present largest future growthopportunities,*Other South American Countries excludes Brazil,Western,China:21.7%,NorthernEurope:6.0%,Canada:1.2%Mexico:6.0%CentralAmerica: 3.6%South American,Countries*: 4.8%,Europe:14.5%Middle East:6.0%Brazil:9.6%,Russia: 1.2%,India:8.4%Australia & NewZealand: 1.2%,South Africa:2.4%,EasternEurope:1.2%,Korea:4.8%,Japan:1.2%Taiwan:1.2%Indonesia& SE Asia:4.8%,18,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Economic SectorB2B Product: 5.7%B2B Services: 7.8%B2C Product: 11.9%B2C Services: 21.3%Industry Sector,Top 3 industry sectors Education Transportation Consumer ServicesBottom 3 industry sectors, Mining/Construction, Manufacturing, Professional Services/Consulting,8.9%,11.3%,10.3%,10.3%,11.8%,12.2%,9.9%,0%,20%10%,Company Internet sales fall below 10%Percent of company sales through the Internet40%30%,Aug-13,Aug-14,Aug-15,Aug-16,Aug-17,Aug-18,Feb-19,Read “How to Overcome eCommerce Growing Pains” for,more ideas on how to expand your Internet presence.,19,FEBRUARY 2019,HOME,MARKETPLACE,GROWTH,SPENDING,PERFORMANCE,SOCIAL MEDIA,MOBILE,JOBS,ORGANIZATION,LEADERSHIP,ANALYTICS,Marketing SpendingMarketing budget growth remains positive, but drops to lowest level in 3 years. Despite thisdeceleration, marketing budgets are expected to re-stabilize over the next year. Brand andnew service introduction spending have the clearest ongoing growth trajectory, beatingother investment dimensions such as customer relationship management (CRM) and newproduct and service introductions.Marketing capability development continues to be the critical knowledge investmentpriority for companies. In parallel, training and development spend as a percent ofmarketing budgets shows five-year gains, signaling companies ongoing commitment togrowing talent.,