Marketing Innovation Is The Way Forward, But CMOs Must First Understand What That Means
Marketing leaders are pegging innovation as the path to growth. Research and advisory firm Gartner notes that marketing innovation—here defined as the execution of new ideas that create value—now makes up more than 20 percent of overall marketing budgets, and its annual Gartner CMO Spend Survey 2021 showed that 72 percent of chief marketing officers (CMOs) have increased investments in marketing innovation over the last year.
While CMOs have increased investment into marketing innovation, 91 percent of survey respondents struggle to measure the impact of innovation, and 83 percent say that innovation has not delivered to management’s expectations. Gartner suggests that this is because many marketing organizations 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 organization has consequences that impact the scope, intent and outcome of activities.”
Gartner’s research found that 95 percent of CMOs report having dedicated headcount for innovation initiatives, and another 93 percent agree that their organization will fund high-risk initiatives. However, it points out that subsequently, there is a high price on getting innovation wrong. Gartner says innovation 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, it recommends CMOs keep certain things in mind:
- 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 organization.
- Educate the marketing team and stakeholders on the dual modes of innovation—transformation and optimization—by being clear about the difference in potential risk and return.