Repost from: https://www.thedrum.com/news/2018/07/31/cmos-see-data-both-top-risk-and-opportunity-extracting-value-remains-difficult
One third of global chief marketing officers believe using data to reach individual consumers will be a top strategic priority over the next three years. However, the same number (29%) also think that a data breach – like those suffered by Uber or the NHS – is the biggest risk they face as a business.
The 2018 Dentsu Aegis CMO survey interviewed over 1000 marketing leads and c-level executives across 10 markets including the UK, the US and China. It found that more than 40% of chief marketing officers expect to see their budgets rise by up to 5% in the next 12 months.
Despite more buoyant budgets, the study found that the biggest challenge in the next two to three years for brands will be weighing up the perils of bearing the responsibility for sophisticated consumer data versus the business value gleaned from those insights.
Under GDPR, organisations face data breach penalties of €20m or 4% of global annual revenue (whichever is highest). Though Dentsu’s survey was conducted prior to the legislation coming into force, 60% of chief marketing officers said they thought the EU regulation would make it harder for brands to build direct relationships with customers.
Despite advertisers like Lloyds overhauling strategies in line with GDPR, financial services brands led this concern with 74% of marketers in the industry agreeing it would make one-to-one interaction with consumers trickier. Media companies were the least concerned at 50%.
Mark Keddie, global data protection officer, at Dentsu Aegis said:“As petabytes of data flow through marketing departments, it’s no surprise that chief marketing officers identify data breach or misuse as the number one strategic risk.
“The reputational and financial impacts for getting it wrong are well-documented. The subsequent opportunity-cost when an organisation loses confidence in its ability to manage and use data responsibly should not be underestimated.
“There’s a significant dividend that can be delivered through the responsible use of data, but marketers will continue to be held accountable as they come to terms with GDPR and as law makers – most recently in California – ratchet-up obligations on business and organisations in general.”
Still a struggle to extract insights
And while there might be more data available, 61% of chief marketing officers agreed that they still struggle to extract insights from the deluge of information.
This figure comes two years after there was a movement from marketers to better address their own data knowledge gaps amid miscalculations and overinflating of performance metrics from the likes of Facebook.
Although progress is being made and amid ongoing calls for transparency in the digital ecosystem, brand marketers said they were taking a ‘build’ rather than ‘buy’ approach to the problem.
57% of marketers told Dentsu Aegis that they are now making better use of their own data to target customers, while a further 52% said they were hiring in-house specialist talent.
48% noted they were developing training programmes for existing employees, and 37% said they were purchasing customer data to salve the problem.
The bigger picture
As the cloud of in-housing and the threat of management consultancies continues to loom over agencies, 33% of brands said they wanted to reduce the number of external agencies they worked with.
Almost half of the advertisers questioned, however, said they wanted to work with more specialist contractors over the next two to three years.
In total 29% said they’d work more with management consultancies.
Interestingly, even in markets facing an uncertain economic future, chief marketing officers plan to be bullish in their spend. In the the UK for instance, 73% of CMOs expect their budgets to increase over the next year, despite lingering uncertainty about the terms of the UK’s departure from the European Union.
Globally, almost half (48%) of marketing leads said they struggle with securing long-term investment to deliver their strategy, while around 40% said they didn’t have enough control over digital investments and initiatives within their business.