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:
General
Digital
Product Development
Strategy
-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.