An improved economic environment has led most chief marketing officers to double down on investment and optimization strategies, according to Dentsu’s Fall 2023 CMO Navigator. This is in line with RSM’s business services industry outlook, which focuses on companies’ ability to keep up with emerging technologies to ensure success.
Priorities and opportunities
No surprises came from the CMO Navigator, a biannual survey produced by Dentsu, one of the largest global marketing and advertising networks in the world.
According to the survey, CMOs are more optimistic about the direction of the economy over the next six to 12 months, with 46% saying they think there is a recession, down from the 67% who said this in the spring.
Source: Dentsu; RSM US LLP
In addition, 75% of CMOs reported revenue growth in the second half of 2023, compared to 64% who reported this in the spring. These statistics align with the most recent RSM US Middle Market Business Index, in which 60% of participants said they expect improvement in the economy over the next six months, and 70% expect revenue to rise over the same period.
The improved outlook lends itself to opportunities for CMOs, as 79% expect marketing budget increases, compared to 66% who anticipated this in the spring. This is allowing companies to develop new initiatives to stimulate, capture and respond to customer demand. Companies are also undertaking business transformations, which entail initiatives that drive new business models, go-to-market strategies and organizational processes and structures.
Business and professional service firms
If this sounds familiar, it should. We stated nearly a year ago that lowering operating costs requires a sound plan.
This continues to be crucial for business and professional services firms that want to transform their business as labor costs rise, and labor productivity decreases, in such a labor-intensive industry.
Challenges and areas of investment
CMOs report they are most concerned about data transformation, which entails obtaining the right data to make timely and appropriate decisions, and understanding whether changes in consumer sentiment are temporary or permanent. This aligns to the sentiment among business and professional service firms in the middle market, which are often going through their own digital transformations at the same time as their client base.
To learn more about digital transformation, download a copy of the 2023 RSM US MMBI Digital Transformation Special Report.
Large companies in the industry are undertaking digital transformations, and technology companies are offering sophisticated solutions to all industries. It is imperative that middle market firms invest in emerging technologies, including artificial intelligence, to expedite their digital transformations.
The takeaway
Business and professional services firms should embrace digital transformation by investing in technologies that not only transform their business, but also make their employees more efficient. While the initial investment may be substantial, the potential cost savings and revenue growth will make it worthwhile for those that implement it successfully.
