Marketing spend accounts for ever greater percentage of firms budgets [#ChartoftheDay]

Marketers can expect greater slice of the pie in 2016

The latest data from CMO.com's 2016 survey shows a healthy increase in the percentage of firms revenues going on marketing. This is good news for marketers, who will be able to use the additional funds to try new campaigns and hopefully deliver the all important ROI which will lead to CFO's being more willing to devote big chunks of company spending to innovative new digital campaigns that it can be hard to get buy-in for.

It's worth considering what might be behind these changes, and the implications for marketers:

• Explanation 1: It's the economy stupid

One explanation for the current trend may just be that economic recovery is giving firms more to spend, and much of this spending is headed towards marketing. The reason for this may be greater competition for attention owing to the economic recovery pushing up costs for ad buys etc.

The implications for marketers:

The implications if this first explanation is true are simple. Increased budgets are great for marketers whilst they last, but are only granted on the basis of the economies performance, and so are liable to be cut if we end up back in recession.

• Explanation 2: It's all about that data

Explanation 2 is a bit more cheery, and as an optimist, it's the one I favour. The idea here is that marketers are better able to utilise data to prove RIO, thanks to a shift to digital. This means they can prove that their generating increased revenue so those in control of the purse strings are more willing to hand over the cash. Whereas once a CEO might reasonably say 'I know I'm wasting half my marketing budget, but I don't know which half', now it's much easier to identify campaigns that are performing and ones that aren't.

The implications for marketers:

Marketers must always ensure they can justify they're spending and prove the worth of their campaigns in terms of increased revenue. So long as marketing is generating ROI, no right minded businessmen is going to cut it's budget, they'd only be blowing a hole in their profits.

• Explanation 3: They're just buying the BS

This explanation contends that it's not that marketers are getting better at genuinely delivering ROI, it's just that they've gotten good and coming up with a whole vocabulary of lingo to bamboozle the finance wonks with. Social media engagement, omnichannel, customer experience, mobile-first, the list goes on. Number crunchers have no idea what this still does, but feel they must sign off on it because marketers are telling them they need to in order to keep up with the competition.

The implications for marketers:

Don't build your house on sand, and don't build your department on BS. If the increase in marketing budgets is genuinely due to a trend of marketers getting better at spin and finances boffins getting worse at calling them out on it, then we have a problem on our hands. You only have to kick in the door and whole rotten structure will come crashing down. Once the wonks in accounts realise what's happening, we'll see brutal cuts to marketing budgets. So as always, make sure you can prove ROI, rather than just 'engagement', 'awareness' or other fussy metrics which excite marketers but not the kind of people who love spreadsheets.

• Source: Percolate
• Data set: CMO.com survey 
• Date: June 2016