Marketing intelligence report

MARKETING INTELLIGENCE REPORT Data, Growth, and the New Marketing Mandate

Background For this inaugural "Marketing Intelligence Report," Salesforce partnered with Advertiser Perceptions and surveyed over 150 U.S. marketers to: • Understand the evolving meaning of growth and its role as a key objective and mandate for marketers • Identify the top challenges marketers face in operationalizing growth across their organization • Assess how marketers attempt to overcome challenges stymieing growth and identify common behaviors that result in better growth Data in this report is from an online survey conducted from October 8–14, 2019. The survey generated responses from over 150 decision-making marketers in the U.S. In addition, qualitative, one- on-one interviews were conducted by phone with five senior U.S. marketers from October 8–10, 2019. Survey data percentages may not total 100 due to rounding. salesforce.com 2

Contents EXECUTIVE SUMMARY ........................................................................................................................................ 04 DETAILED FINDINGS 01 | Growth: The New Marketing Mandate .................................................................................................07 02 | The State of Marketing Analytics .......................................................................................................... 13 03 | Data Integration and Management ......................................................................................................15 04 | Data Analytics and Optimization ..........................................................................................................18 LOOKING AHEAD TO MARKETING SUCCESS: THE DATA-DRIVEN REVOLUTION .................................21 METHODOLOGY .................................................................................................................................................... 25 ABOUT DATORAMA ...............................................................................................................................................28 salesforce.com 3

Executive Summary 1 Growth is a defined directive. Two in three marketers have aligned their priorities to focus on Today’s marketer has unprecedented access to the tools and data leading growth, and 96% of marketers believe that the marketing they need to create exceptional customer experiences and grow their function has a critical role to play in driving ROI and growth for their businesses. This has resulted in a fundamental shift in how marketers business. measure success and make decisions. In the past, marketing was often seen simply as the “steward of the brand.” Now, driving real 2 The marketing landscape is increasingly complex. business growth has become marketing’s biggest priority. Individual marketers use an average of 13 different marketing and Armed with data, all marketers — from analysts to channel managers advertising platforms. to executives — are expected to prioritize growth and prove the value of every marketing investment. But this transition to marketing-led growth has not been easy. In this report, we examine the interplay of 3 Cross-channel data integration is a common challenge. growth and data in marketing today, and the key trends driving both. Only 33% of marketers describe their company’s current state of marketing data integration and management as “excellent.” 4 Marketing reporting and analytics need greater speed and sophistication. Customer preferences are ephemeral, and marketers must move at their speed. However, only 20% of marketers cited real-time or daily access to cross-channel marketing performance data and only 8% have achieved fully automated cross-channel reporting. 5 Marketing culture and technology are shifting in the context of growth initiatives. Organizations are undergoing cultural transformations to be more data-driven through support from executive leadership (49%) and investment in marketing analytics platforms and technology (44%). salesforce.com 4

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate Growth: The New Marketing Mandate Why are today’s marketers facing this new mandate for growth? Extent to Which Marketers Are Shifting Priorities In part, it’s because they’ve always been accountable to both their to Growth customers and their business. This unique position makes them central players in both creating great customer relationships and driving ROI. Consequently, they are increasingly taking on more Not at all Very significantly responsibility to lead and measure growth across their business, be it 31% 11% an enterprise, agency, or publisher. Findings show that this growth mandate is real and already proliferating throughout marketing organizations. In 2019, two in three marketers shifted their priorities to focus on this marketing-led growth. Somewhat significantly 58% salesforce.com 5

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate Whether or not marketers have shifted their priorities to growth, 96% agree that marketing has a major role to play in driving ROI and The right marketing targets, attracts, retains, and growth for their business. captivates the ideal customer—it is critical in driving ROI. “ — C-level, Brand Extent to Which Marketers View Their Function as Critical to ROI/Growth Marketing’s role is unsurpassable. Subscribers, interaction, and intention don’t happen on their own. Not very critical You have to have somebody constantly grinding “ 4% Very critical at it every day. 47% —Director, Marketing + Strategy, Media + Entertainment In today's landscape we need to identify our targets and ensure ads aren't hitting deaf ears. “ — Manager, Agency [Marketing is] extremely critical as long as there is collaboration with sales to impact lifetime value. Somewhat critical “ 49% — VP, Brand salesforce.com 6

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate Defining Growth Marketing How Marketers Define Growth Marketing The concept of “growth marketing” is commonly misconceived as a “hacking” tactic — one that marketers employ on an ad hoc, informal Testing and optimizing to achieve growth within specific basis. However, the reality is that growth marketing is a much more target segments with a limited budget. complex discipline. How marketers de昀椀ne and describe growth “ marketing varies — both in what they measure to determine growth — Director, Brand and how they achieve it. Taking advantage of opportunities to market specifically to an individual to ‘right price them’ for their value to the organization. “ — VP, Agency Expanding the scope of technology to get to customers not regularly visible in traditional ways. “ — Director, Brand Where marketing spend is ahead of immediate sales (i.e., investing to grow share). “ — C-Level, Brand It’s the process of improving results in a target area through experimentation. “ — VP, Brand salesforce.com 7

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate One dimension of growth marketing to consider is the timeline. Is Another important dimension is revenue growth. In 2020, marketers growth focused on the short term, especially for public companies look to achieve signi昀椀cant growth with more direct-to-consumer that need to deliver value to shareholders on a quarterly basis? Or is marketing tactics, connected customer experiences, and diversi昀椀ed growth more long term, where the horizon may be four to 昀椀ve years, products and o昀昀erings. They also are aligning their e昀昀orts with sales with medium-range targets along the way? initiatives and strategies to drive company growth. How Marketers Describe Their Focus on Growth Ranking of Marketers' Growth-Related Sales Initiatives Short term Long term 12% 30% 1 Direct-to-consumer growth 2 Connected customer experiences across marketing, sales, service 3 Diversification of products/offerings 4 Acquisition of new products/brands/offerings 5 Sales growth via standard brick-and-mortar sales A mix of short and Total Ranking Based on Top 3 Choices For Respondents long term 58% You never want to always think in the short term because you’ll miss the big picture. If you only look at the big picture, you have to figure out baby steps to get there. “ — Director, Marketing + Strategy, Media + Entertainment salesforce.com 8

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate The metrics used to measure growth are diverse. While revenue is the While sales/revenue, brand awareness, and customer retention are most prevalent metric, marketers are viewing growth from multiple other among the most important metrics marketers use to de昀椀ne growth, angles as well. While revenue is the most prevalent metric, marketers a signi昀椀cant number of marketers are only at best “somewhat are looking at growth from multiple angles throughout the funnel, from successful” in achieving the growth they seek. awareness to sales, conversion, and loyalty. Ranking of Marketers' Growth-Defining Metrics Marketers’ Self-Assessment of Their Success Across the Following Growth Metrics 1 Sales/revenue Very Successful Somewhat Successful Not at All Successful 2 Brand awareness Funnel conversion rates 60% 20% 20% Customer retention 55% 45% 3 Return on marketing investment Brand awareness 50% 50% Marketing spend per 50% 50% 4 Customer retention customer Lifetime value of 44% 56% a customer (LTV/CLTV) 5 Customers/client volume Brand loyalty 43% 43% 14% Return on marketing 37% 63% investment Total Ranking Based on Top 3 Choices For Respondents Customer engagement 33% 50% 17% Sales/revenue 33% 57% 10% Customer satisfaction 33% 67% or Net promoter score Customer acquisition 29% 57% 14% cost (CAC) Customers/client volume 27% 64% 9% Sales qualified leads/ 25% 75% pipeline (SQL) Marketing qualified 20% 80% leads (MQL) Market share 18% 73% 9% salesforce.com 9

DETAILED FINDINGS: 01 | Growth: The New Marketing Mandate Why does growth success lag for these marketers? What holds them With the convergence of technology, data, and growth, the way back from optimal growth? The most common barriers are directly marketers integrate, manage, analyze, and optimize their data related to data: a lack of a unified view of performance, real-time has become a critical component in how they approach growth insights, and data management. Other barriers are also tangential to across their organization. data: misalignment across teams on measurement and reporting and lack of resources. Ranking of Growth Marketing Barriers 1 Lack of a unified view of performance 2 Lack of resources and talent 3 Misalignment across teams on measurement and reporting 4 Lack of real-time insights 5 Data mismanagement Total Ranking Based on Top 3 Choices For Respondents salesforce.com 10

DETAILED FINDINGS: 02 | The State of Marketing Analytics The State of Marketing Marketers Using the Following Channels in Analytics Marketing Strategy Digital display advertising 84% As we saw in the previous section, the number one barrier to growth Paid search 80% for marketers today is the lack of a unified view of performance. This Paid social 79% is no surprise — customers have more access to content than ever Programmatic advertising 78% before, meaning marketing strategies have become increasingly (display, mobile, video) complex and performance more difficult to understand. Website(s) 72% Email 69% Marketers now almost exclusively take a cross-channel approach to Print 62% campaigns. For example, more than two-thirds of marketers cited Traditional/linear TV 60% using display advertising, paid search, paid social, programmatic, website, and email as top channels. From online to offline, mobile OTT TV 56% web to app, marketers are connecting with customers and prospects Mobile app(s) 55% across a wide span of channels. From the marketer’s perspective, this SEO 49% affects everything from personalization to targeting, measurement, Out of home billboards or optimization, and outcomes. displays (OOH) 48% Direct mail 48% Radio 46% Organic social 44% CRM 44% Influencer marketing 43% Ad server 39% Affiliate marketing 34% Content syndication 32% Ad verification 31% Mobile push or SMS 30% Surveys 24% salesforce.com 11

DETAILED FINDINGS: 02 | The State of Marketing Analytics To manage their cross-channel marketing efforts and resulting data, Marketers interviewed consistently spoke of a desire to align data marketers are using an average of 13 different marketing platforms. from these platforms for a complete cross-channel view of marketing However, each platform is a bit different. Each consists of data sources activity and investment. that differ in format, outputs, delivery mechanisms, and other aspects that make them unable to interact with each other. As these sources are often not speaking the same language, they cannot be easily integrated for a holistic view. 87% of marketers agree that having a complete view of cross-channel marketing is very important/ important. Number of Marketing/Advertising Platforms Used per Marketing Team This cross-channel view is key for a majority of marketers but is generally deemed more important by senior management (58% view it as "very important," compared to 41% of mid/junior sta昀昀 who say the same). Average Number of Platforms 39% 13 34% 20% 7% 1% 1–5 6–15 16–30 31–50 50+ salesforce.com 12

DETAILED FINDINGS: 03 | Data Integration and Management Data Integration and Management With the influx of data stemming from cross-channel marketing, Marketers’ Assessment of Their Current Data Integration marketers face the challenge of gaining a holistic understanding & Management State of it all. Their efforts focus largely around data integration and management — combining accurate, accessible, reliable, and timely Not applicable data to create a single, unified system of record. Poor 1% 13% Excellent Most marketers are optimistic about their organization's state of data 33% integration and management, with 54% describing their current state as “good.” However, only one-third consider their capabilities “excellent.” There is still work to be done around data integration and management. Good We aren’t there yet. We’re not 100% efficient. But 54% every time we accomplish a step, things are easier. We have more bandwidth. Things become better “ and more clear. — Director, Marketing + Strategy, Media + Entertainment salesforce.com 13

DETAILED FINDINGS: 03 | Data Integration and Management The top challenge cited with data integration and management is the Extent to Which Marketers’ Cross-Channel Data ability to connect and unify data from multiple sources. Integration Is Automated Fully manual Fully automated Ranking of Marketers' Data Integration & 5% 5% Management Challenges More manual More automated 1 Ability to connect and unify data from multiple sources than automated than manual 42% 30% 2 Data accessibility 3 Time spent on data cleansing/data prep 4 Creating consistent KPIs and taxonomy across data sources 5 Employee resources and skill set An even mix of the two Total Ranking Based on Top 3 Choices For Respondents 19% In order to better understand the challenges associated with Only about one-third are more automated than manual, with a mere data integration and management, it’s critical to understand how 5% fully automated. Marketers using automated methods have the marketers are approaching these processes. With so many platforms, advantage of being able to dedicate more resources to activities that how do marketers integrate their cross-channel data? For the majority, directly drive growth. manual techniques are still used. salesforce.com 14

DETAILED FINDINGS: 03 | Data Integration and Management Time is a critical resource for marketers because successful marketing Instead of analyzing their data, 57% of marketers are spending must move at the pace of customers. Fifty-six percent of customers a week or more each month solely on harmonizing data. This expect to find whatever they need from a company in three clicks or is valuable time that could be spent on insight generation and less, and 71% of customers expect companies to communicate with campaign optimization. * Marketers need to make decisions on the fly, and them in real-time. significant time can be lost with manual data integrations. Despite marketers spending a week or more each month on data harmonization, this has not led to resounding confidence in data accuracy. Time Spent Harmonizing Data for Reporting/Analysis A mere 16% of marketers are very confident in the accuracy of their data. 38% This is perhaps due to the default manual processes being prone to 32% errors. Without accurate data, marketers are handcuffed in their ability to achieve success, regardless of their goals. 14% While accurate and timely understanding of both their customers and 11% their data is essential, the next step is to activate this data across the 5% customer journey with the right analytics and optimization strategy. 1 day each A few days 1 week More than a Continuously month each month each month week each every week month each month * "State of Connected Customer Report," June 2019 salesforce.com 15

DETAILED FINDINGS: 04 | Data Analytics and Optimization Data Analytics and Optimization Analyzing and optimizing data is essential in order to meaningfully However, when we shift from self-identified states of analysis and engage with customers and prospects. Additionally, performance optimization to specific challenges, it’s evident that marketers face measurement is key to understanding the success of each marketing plenty of roadblocks. activity and investment. It is also critical for reporting growth metrics to internal and external stakeholders. And similar to their data The biggest challenge is their inability to connect marketing management grading, marketers are generally positive about their data investments to outcomes, in other words, to prove ROI. While analysis and optimization capabilities. Most give their organizations marketers generally find their capabilities competent, the most high marks, with only 13% rating such capabilities “poor.” critical capability — proving ROI — is their biggest challenge. Marketers’ Self-Assessment of Their Data Analysis & Ranking of Marketers' Data Analysis & Optimization Capabilities Optimization Challenges Poor 13% Excellent 1 Connecting marketing investments/activities to business outcomes 33% 2 Custom report generation 3 Ability to share and collaborate on data analysis across key internal/external stakeholders 4 Lack of speed in reporting and insights due to manual data prep 5 Using insights to target highly relevant audiences Good Total Ranking Based on Top 3 Choices For Respondents 54% salesforce.com 16

DETAILED FINDINGS: 04 | Data Analytics and Optimization To understand why marketers face data analysis and optimization In addition, a majority of marketers rely on manual labor over challenges, we need to look deeper into their processes. automated processes to generate their cross-channel reports and insights. Forty-two percent of marketers are operating in silos, measuring performance independently within each tool or platform, while 10% rely on spreadsheets. How Marketers Measure Extent to Which Marketers’ Cross-Channel & Optimize Performance Reporting Is Automated Other Fully manual Fully automated Use spreadsheets 6% Use BI/marketing 7% 8% 10% intelligence platform 42% More automated than manual 33% More manual than Within each tool automated independently 40% An even mix 42% of the two 13% salesforce.com 17

DETAILED FINDINGS: 04 | Data Analytics and Optimization Eighty percent of marketers don’t have access to daily or real-time Between sporadic reporting cadences and the inability to connect reports. Rather, they typically generate or receive reports on a monthly marketing investments to business outcomes, 76% of marketers or weekly basis. They are only able to analyze results in retrospect, and do not feel that internal and external stakeholders are very aligned can’t pause or double down on ad spend in real time. in their understanding of marketing data and analytics. Without alignment across stakeholders, marketers face an uphill battle in driving growth for their businesses. Frequency of Full View Cross-Channel Performance Alignment of Key Internal & External Stakeholders on Reporting Understanding Marketing Data & Analytics Not aligned Very aligned 7% 24% 38% 28% 14% 6% 8% 6% Somewhat aligned Real Time Daily Weekly Monthly Quarterly We don’t 69% currently do this salesforce.com 18

LOOKING AHEAD TO MARKETING SUCCESS: The Data-Driven Revolution It’s clear that marketers, while largely aligned on their purpose, Extent to Which Marketers Consider the Following to Be have immense opportunities for creating growth and data-driven Important for Their Success marketing practices for 2020 and beyond. Marketers are in agreement that data is the cornerstone of marketing Very Important Important Not Important success. Accurate, validated data, data accessibility, connected Accurate, validated data 64% 33% 3% marketing and sales data, and real-time insights are among the most Optimizing the marketing 59% 35% 6% important factors to marketing success. However, these are the same budget things that marketers are most challenged by (see pages 11 and 14). Data accessibility 52% 43% 5% Connecting marketing and 52% 44% 4% So how well are marketers doing when it comes to achieving success? sales data Real-time insights 44% 44% 11% Consistent measurement 39% 54% 7% and/or taxonomy Providing visibility to 38% 55% 7% leadership On average, only 34% of marketers say Centralizing data across all 35% 58% 7% they’re performing “very well” against a given channels/sources Technical skills/expertise 35% 60% 5% marketing goal and 57% are doing a “fair” job. Interactive views of all your 31% 59% 9% data across channels Analyzing the competition 29% 59% 12% Report automation 28% 62% 10% salesforce.com 19

LOOKING AHEAD TO MARKETING SUCCESS: THE DATA-DRIVEN REVOLUTION Regardless of how well they’re doing at achieving their goals, the top Marketers Who Seek to Improve the Following area marketers want to improve in 2020 is growth. Over the Next Year Marketers are already making progress in transforming their Driving revenue growth and campaign KPI 58% organizational cultures to drive growth. This progress is due in part performance Deeper insights into audiences, content, 54% from senior-level support, as well as investments in marketing and offers analytics technology and alignment on what KPIs matter most. A Creating a strategic view of our overall 52% marketing performance successful growth marketing strategy is not the outcome of the right Optimizing marketing spend (repurposed and 52% people, processes, or technologies independently, but instead an reallocated) Better ability to understand and engage 49% alignment of all three. With an understanding of key growth priorities customers and challenges, combined with leadership support, investment, and Efficiency of data management and 44% preparation an aligned measurement strategy, marketers are poised to see big Access to real-time data for faster 38% gains in growth marketing success in 2020 and beyond. decision-making Marketers Claiming Excellent Progress in the Following There's a huge push [to create] a data and Elements of Data-Driven Organizational Culture analytics culture, and it feels like the future. It's certainly being driven from the top. 49% “ Support from executive leadership — Global Director, Strategy + Innovation, Agency Investment in marketing analytics platform/ technology 44% Alignment on KPI, metrics, and taxonomy 42% across teams, regions, and partners Tracking ROI across each marketing investment 41% Cross-team/business unit collaboration in understanding 39% analytics reporting and using it to support decision-making Democratization of marketing analytics (employees are able 33% to understand and ask questions about data across roles) Excellent is de昀椀ned as self-assessments of 8, 9, or 10 on a ten-point scale salesforce.com 20

Methodology Salesforce partnered with Advertiser Perceptions to survey over 150 U.S. marketers. The research was conducted in two concurrent phases, with results from both presented in “Marketing Intelligence Report: Data, Growth, and the New Marketing Mandate.” Phase 1A: Online Surveys Survey Methodology and Respondent Profile Methodology Market Sectors Respondent Profile Online Survey of 153 Marketing Decision • Financial Products/Services 33% Company Type Makers • Consumer Packaged Goods 20% • Sample: Marketer and agency contacts from • Retail 19% Agencies 31% the Advertiser Perceptions Media Decision • Automotive 16% Maker Database. Marketers 69% • Technology/Business Solutions 15% Qualifications: • Media and Entertainment 14% Job Title • Involved in advertising and/or marketing • Pharmaceuticals & Remedies 12% decision-making • Telecommunications 12% Senior Level 39% • Use/drive marketing analytics/conduct • Health and Life Sciences 11% cross-channel analytics Mid Level 44% • Company or main client spends $1 million • Travel 11% annual on total media advertising • Apparel/Fashion 10% Junior Level 17% Fieldwork: • Restaurants 9% Annual Digital Ad Spend • October 8–October 14, 2019 • Consumer Electronics 8% • Cosmetics & Toiletries 7% Under $30 million 52% • Liquor, Beer, and Wine 5% • Manufacturing 4% $30 million or more 48% salesforce.com 21

METHODOLOGY Phase 1B: In-Depth Interviews In-Depth Interview Methodology and Respondent Profile Methodology Market Sectors 30-minute, one-on-one in-depth phone interviews • 3 Agency Executives with 5 U.S.-based marketing decision makers • Automotive • Sample: Marketer contacts sourced from the • Beauty Advertiser Perceptions Media Decision Maker • CPG Database. • Financial Services Qualifications: • Luxury • Media + Entertainment • Involved in advertising and/or marketing • Technology decision-making • Use/drive marketing analytics/conduct cross- • 2 Marketing Executives channel analytics • Company or main client spends $1 million • Financial Services annual on total media advertising • Media + Entertainment Fieldwork: • October 8–October 10, 2019 salesforce.com 22

About Datorama Datorama, a Salesforce Company, provides the leading cloud- The Datorama community leads the way when it comes to the growth based, AI-powered marketing intelligence and analytics platform for mandate. Compared to survey respondents using other solutions, enterprises, agencies, and publishers. Marketers use Datorama to bring those who use Datorama were: together all of their data and take action on insights to optimize every marketing investment and activity. Datorama enables more than 3,000 • 2.6x more likely to say they have shifted their priorities to growth leading global agencies and brands — including PepsiCo, Ticketmaster, • 2.9x more likely to say they are exceeding their growth goals trivago, Unilever, Pernod Ricard, and Foursquare — to automate • 2.2x more likely to describe their overall analytics capabilities as reporting and make data-driven decisions faster. Datorama integrates advanced the myriad of technologies used in today’s marketing and consumer engagement ecosystem, enabling brands, agencies, and publishers to • 6.0x more likely to have access to reporting in real time deliver exceptional, intelligent experiences across the entire customer • 3.0x more likely to be very confident in their data accuracy lifecycle. Learn more: datorama.com Through people, process, and technology, Datorama customers are paving the way to a future with marketing at the center of business growth. salesforce.com 23