Chief marketing officers (CMOs) see innovation as the path to growth, with marketing innovation now making up more than 20% of overall marketing budgets, according to Gartner.
The annual Gartner CMO Spend Survey 2021 showed that 72% of CMOs have increased investments in marketing innovation over the last year.
Gartner surveyed 400 CMO and marketing leaders in North America, the UK, France and Germany from March 2021 through May 2021, tracking the critical areas marketers are investing in and where cuts are being made from people, programs and technologies.
While CMOs have increased investment into marketing innovation, 91% of respondents struggle to measure the impact of innovation, and 83% say that innovation has not delivered to management’s expectations. This is because many marketing organisations lack a clear definition and shared understanding of what marketing innovation means.
“Like ‘agility,’ the term ‘innovation’ has become ubiquitous in the language of modern business. However, there’s significant disagreement about what innovation actually means,” says Ewan McIntyre, co-chief of research and vice president analyst in the Gartner Marketing practice.
“This isn’t just arguing semantics – definitions matter when it comes to delivering on business objectives related to innovation. Misunderstanding what innovation means to your organisation has consequences that impact the scope, intent and outcome of activities.”
With 95% of CMOs reporting they have dedicated headcount for innovation initiatives, and another 93% agreeing that their organisation will fund high-risk initiatives, there is a high price on getting innovation wrong.
Gartner defines innovation as “the execution of new ideas that create value” – this requires three key elements: novelty, execution and a useful outcome.
To ensure marketing innovation investments do not fall victim to risk associated with resources, strategy or credibility, CMOs should consider the following:
* Build a clear definition and shared understanding of marketing innovation. This will rid innovation programs of ambiguity, minimizing the risk of innovation-in-name-only.
* Clarify the enterprise’s appetite for “new” by being clear about the difference between ideas that are “new” to the world, “new” to the industry and “new” to the organisation.
* Educate the marketing team and stakeholders on the dual modes of innovation – transformation and optimisation – by being clear about the difference in potential risk and return.