Gartner’s 2014 digital marketing spending survey validated a figure that’s been postulated – marketers set aside 10% of their budget for activities that lead to future growth. Of the 276 managers who responded to the question “Does your organization allocate a portion of its total marketing expense budget to innovation?”, 83% said yes. Asking those who said yes “What percentage of your organization’s total marketing expense budget is set aside for innovation?”, the average response was 9.4%. To obtain a copy of key findings from the survey or a replay of the summary webinar, go to www.gartner.com/dmspend .
No Surprise That Marketing’s Involved in Innovation
Innovation can mean many things. Marketing has always been associated with creativity. Marketing is deeply involved with – and measured on – growth. Many marketers have responsibility for all or the initial stages of product development, given their intimate knowledge of customers and markets. Our research found that 42% of marketers “have a significant role in strategic planning.” Digital marketing is known for operating in a “fail often, fail fast” mode, especially with new techniques and technologies.
A wide variety of marketing jobs include innovation in the title. Here are examples – they fall into four main categories:
|-VP, Marketing & Innovation||-Director, Digital Marketing & Innovation||-SVP, Global Product Management & Innovation||-VP, Marketing, Innovations and Strategy|
|-SVP, Innovation & Growth Marketing||-VP, Digital Brand Marketing & Innovation||-VP, Product Brand Marketing & Innovation||-VP, Marketing Strategy & Innovation|
|-Director of Marketing & Innovation||-VP, Content Marketing & Innovation||-VP, Marketing, Innovation and RD||-Chief Transformation, Innovation & Marketing Officer|
|-Chief Marketing, Insights & Innovation Officer||-VP, Social Marketing Innovation||-SVP, Technology & Innovation Marketing||-SVP, Strategy & Consumer Marketing Innovation|
The Innovation Role Crosses Functions
Of course many other functions in a company support innovation as well as marketing. Some companies have a Chief Innovation Officer (CINO) – the majority of them position innovation as a joint responsibility with another role, such as growth, strategy, marketing, or R&D. A Gartner conversation with recruiting firms Heidrick & Struggles and Russell Reynolds indicates most CINOs report to the CEO, with a fair share reporting to marketing, engineering or R&D.
The chief marketing technologist (CMT), a hybrid CIO-CTO dedicated to marketing, also plays a role in innovation. 81% of companies now have the equivalent of a CMT, up from 70% a year earlier. They help marketers scan, test and evaluate potential new technologies which can provide competitive differentiation, improve efficiency or customer experiences. For more information, see the ChiefMarTech blog.
Google & Coca Cola’s 70-20-10 Investment Model at Work in Digital Marketing
This approach to innovation can be summarized by “now”, “new” and “next”. The CEO of Google, Eric Schmidt, described Google’s 70-20-10 approach here, where 10% represents “truly new”. As part of Coca Cola’s 2020 vision, in its famous marketing video on content/conversation, 10% is “high risk brand new ideas” (starts at 10:31). Think about marketing’s ability to innovate in these three areas:
- digital products, digital channels, digital communities and digital business strategies
- digital capabilities to create new markets or cross industry boundaries
- digital contributions from across the ecosystem, including customers, partners, and other stakeholders
Marketing – Masters of the Valuable
Philip Kotler, Professor of International Marketing at the Northwestern University Kellogg Graduate School of Management, put it this way ““R&D people are the Masters of the possible; Marketing personnel are the Masters of the valuable.” Put together digital marketing’s role to “use a set of techniques, enabled by technology, which enables marketing to improve its processes to engage in a dynamic conversation with people who are influencers and buyers, and ultimately target, acquire and retain customers” with marketing’s remit to drive growth and you see why marketing has a significant budget for innovation.