Nicky Hall . Contentsquare Marketing Director, Consultant, Author.
CMOs have seen business and budget swings over the past year. Confidence picked up after the pandemic ended, but soon after there were signs a recession was brewing with the release of the jobs report, interest rates starting to rise and macroeconomic factors weighing on global markets and the chain. of supply.
Now that CMOs are in the midst of budgeting for 2023, there is a lot of uncertainty and conservatism. What's interesting, though, is that many CMOs also maintain an optimism not seen in previous downturns. In general, they remained focused on high-quality, high-return spending and accelerating activity at the first sign of recovery.
Unsurprisingly, the uncertain economic outlook means that marketing budgets have not fully recovered to pre-pandemic levels. According to a recent Gartner report, while marketing budgets have risen a bit from 6.4% to 9.5% of company revenue, they're still not at the pandemic level of 11%.
The silver lining of the pandemic has shown that brands are still willing to invest, but in areas where they have the greatest value at scale; In fact, a Harvard Business Review study found that marketers plan to increase their digital marketing spend to 73% by 2023, a significant increase from 16% in 2022. CMOs plan to intensify this focus through 2023, where digital flexibility has already increased. Investments have been positive in recent years and have incredible potential for the future.
The ongoing digital transformation will be the rallying cry for marketers for the foreseeable future. Digital marketing represents the future of many companies, enabling CMOs to reduce costs and maximize opportunities in times of economic uncertainty. but how?
Data, of course, plays an important role. Digital experience analytics, in particular, can inform marketing spend decisions by closely examining the return-effort relationship. How much do brands invest in experience? Does it resonate with customers? And how does that translate to the end?
Fortune Business Insights forecasts that the customer experience market will reach $32.53 billion by 2029, with a compound annual growth rate of 16.2% during that period. "Customer experience management solutions help companies reduce interruptions and improve loyalty," according to the company, demonstrating that digital data and customer experiences matter. His ability to make decisions based on meaningful customer interactions not only reflects the true potential of digital marketing, but also shows optimism for the future.
Here are three ways digital experience analytics can help marketing managers increase their marketing spend:
1. Focus on value.
Realigning marketing budgets will reduce spending on customer acquisition, which has become a huge expense. When acquisition costs are high and loyalty drops in crowded areas, the budget focus shifts to higher-value strategies, such as
Focusing on customer satisfaction and retention is clearly the way to maximize revenue. When customers have had experiences that they consistently enjoy and find valuable, they will return. Over time, this creates a brand affinity that's hard to break. According to Contentsquare web analytics data, 51% of website traffic in 2021 was repeat customers, proving that driving repeat sales with existing customers is just as important as attracting new customers.
2. Emphasis on experimental differentiation.
Customer experience (CX) analytics helps managers improve the implementation, configuration, and use of many digital technologies, especially as it relates to the digital experience. While A/B testing programs are not a new concept, the purpose of trial and error is to identify successful components of the digital journey that can be applied to multiple campaigns.
In addition to A/B test data, the inclusion of Voice of the Customer (VoC) technology can drive beta differentiation by connecting what customers are saying and doing. Another method that has proven useful is reporting to recommendation engines. Digital experience analytics provides insights into the ideal placements on product pages to ensure they're not just seen, but used.
A good example of this is a globally popular pizza brand we work with that ran a four-week experiment on the supply side and quickly realized that while they thought their ad placement was obvious, in reality was not. To the company's surprise, customers were completely lost. After major changes, the pizza brand made $7.8 million in annual sales with this unique test.
3. Focus on operational efficiency.
Nothing frustrates a CMO more than when the marketing team struggles to align, reinvent, and leverage proven processes instead of driving efficiencies through ownership, collaboration, governance, and reporting. Modern Digital Experience Analytics (DXA) provides digital marketers with a comprehensive 360-degree view of engagement, including insights into experiential, behavioral, and technical performance. Analytics bridges the gap between experienced brands I think they offer services that really resonate with their clients.
With DXA, marketing teams can effectively define and prioritize tactical execution, and opportunities to increase digital marketing effectiveness become clearer. Beyond the marketing team, informed decision-making paves the way for better cross-departmental collaboration, especially when DXA data and platforms are readily available and easy to interpret.
It is important to note that data strategies are most effective when designed with intent. More data is not value, it is insightful data and every business should strive to distinguish between them. Powerful data visualizations allow organizations to break down barriers between departments and quickly align them with goals and strategies. Data has the greatest business impact when it is part of an organization's collaborative DNA.
CMOs are under enormous pressure to balance their customers' expectations with the budget decisions they will need to make in 2023. In order for their teams and businesses to prosper, it is all too clear to base these decisions on data-driven insights. Ways to maximize return on investment.
The Forbes Communications Council is an invitation-only community of executives from successful public relations, media strategy, creative, and advertising agencies. Am I eligible?