The future of digital marketing, they say, belongs to small, agile challengers rather than large, yet slow-moving, incumbents. Deloitte's recent CMO Survey data underlines the point.
Asked to rate their digital marketing transformation, nearly 20% of mid-sized businesses (with $100-499 million revenue) and over 10% of the smallest businesses (less than $10 million) felt their digital transformations were Established or Institutionalised. No large businesses (greater than $10 billion) felt that way.
Of course, incumbent, enterprise-scale businesses enjoy far greater resources, brand awareness and presence in the marketplace than would-be disrupters.
But the legacy of dominance can be lethargy and inertia. Big firms are often slow to see and slow to change. They are likely to have an established, pre-digital marketing culture that is focused on past experience, gut feel and a product-based view of the world, rather than being data-driven, using iterative experimentation and having a focus on the customer.
Typically, teams operate in siloes with separate data and a non-integrated mix of legacy systems and point solutions. The 2022 CMO Survey found that just 39% of businesses had effectively integrated customer data from multiple departments, while only one in four had consolidated data from all customer touchpoints.
Enterprise marketing teams are also suffering from budget constraints. Marketing budgets across all businesses grew by 10.3% in the prior 12 months and are expected to increase by 13.6% in the next 12. But the $10bn+ segment experienced a marginal decline (-0.1%) in the previous year and expect an increase of only 1.7% in the 12 months to come.
Enterprise marketers will need to be ever more focused on optimising their ads in a dynamic landscape to ensure maximum ROI from tighter budgets.
As well as managing their day-to-day work through the above challenges, enterprise marketers are trying to maintain and build their own digital skills.
It's not just a question of finding the time and money (across the board, marketing training budgets have fallen by nearly a third, from a pre-Covid high of 5.8% down to just 4.1%). In organisations that are less transformed, digital marketing trends to be carried out by retained media agencies and other external partners. That means the agencies drive the agenda and retain the IP and capability, while brands become passive recipients, unable to build their in-house insights or skills.
Even worse, enterprise businesses are prioritising the right operating model over having the right talent. While 42% of all businesses rank having the right talent as the most important priority, this is only 11% for the largest enterprises (and 52% to 58% for mid-sized businesses). By contrast, a third of enterprises say that the right operating model is their top priority.
That may be because enterprises already rate their current digital marketing knowledge and skills very highly. Over 93% of $10bn+businesses say their digital marketing skills are at or above industry average. Six out of ten say they are above average.
Yet, as we've seen, smaller businesses are generally more advanced in their digital journeys. Enterprise-scale businesses may be underestimating the skills gap against their smaller competitors.
Digital transformation requires top-down strategy and bottom-up advocacy.
Successful, digital-first businesses need data-savvy, digitally hungry change-makers in their marketing departments. And they need visionary leaders – a CEO or CMO prepared to invest in the culture and technology to support them.
The challenge is that enterprises are vulnerable to losing the very staff they most need because of the Great Resignation. At the same time, they lack the culture that will entice high-quality replacements.
Start-ups are booming, with record numbers of new businesses being set up during the Covid period in the US and the UK. In today's talent crunch, agile start-ups promise greater autonomy, purpose-driven cultures and the opportunity to master the latest and greatest technology stacks.
So how can enterprise marketing leaders compete? How can they develop their teams' digital and data skills and accelerate their digital transformations?
Clearly, enterprise marketing is not doomed. Indeed, any enterprise that can combine digital smarts and agility with its existing market muscle could become all but unassailable. The difficulty is that, in many cases, the size of the challenge is so great, the current culture so entrenched, and the examples of successful transformation so scarce that, by the time the business realises it's on a burning platform, it will feel too late.
No one can predict what the successful businesses of the future will look like. However, it's a safe bet they will have built a flexible, customer-focused and data-driven culture underpinned by great talent and the tools to empower them.
10th Man works with some of the world's biggest brands to provide deep and unbiased insight into marketing performance and organisational decision-making. If you'd like to discuss how we can help develop greater understanding of a more dynamic marketing landscape, contact us here or email us at team@10thMan.media.