UK marketers falling behind on innovation

UK CMOs are almost half as likely to see innovation as a primary role of the marketing function as their US counterparts, leading to questions over whether they focused enough on disruption and consumer trends.

marketing innovation

UK CMOs are falling behind their international counterparts when it comes to their role in creating disruptive innovation, raising concerns over the health and future growth for brands.

According to research by Dentsu Aegis, just 25% of UK marketers identify “leading disruptive innovation” as a core functional priority. This is well behind the international average of 35% and puts it bottom of the list in the survey of 1,000 chief marketing officers and senior-level marketers across 10 countries.

It also means the UK is significantly adrift of CMOs in the US, where 46% see innovation as key to their roles. Even in Spain, which came second bottom of the list, 30% of marketers see innovation as a key functional role of marketing.

marketing innovation

This is not the first time concerns have been raised about a lack of innovation at UK companies. BrandZ research by Millward Brown last year found that just 22% of the top 50 UK brands are considered to be ‘healthy’, compared to 50% globally. Health is measured according to five metrics – purpose, innovation, communications, brand experience and love.

READ MORE: The UK’s 50 most valuable brands and why they must innovate to survive globally

That research found that it is the ‘innovation’ aspect in particular where UK brands fall down, in part because they have been affected by widespread adoption of global tech brands including Amazon, Apple and Google.

Yet it is increasingly clear the focus US brands put on innovation. Just last week, AB InBev brought together its marketing and innovation functions under a new global lead as it looks to up the pace of innovation. Pepsi, meanwhile, has setup an innovation hub in the US with the aim of scaling new products more quickly.

Brands that don’t innovate risk disruption

Rather than innovation, UK CMOs are more likely to be focused on “developing the overall customer experience”, with 64% picking this option as one of their top three priorities. This is just ahead of “delivering business growth” on 63% and “ensuring effective brand management” on 52%.

By contrast, internationally “delivering business growth” comes top on 64%, followed by “ensuring effective brand management” and “developing the overall customer experience”. Leading disruptive innovation is bottom both in the UK and internationally.

That marketers don’t see innovation as a key priority is a concern given the way brands are being disrupted. Dentsu suggests brands need to start thinking about marketing as a way “not just to grow the business, but to change the business”.

It points to disruptors such as Dollar Shave Club and Uber, which have disrupted established business models and built emotional affinity with their customers through marketing.

“Ten years ago, nobody would have imagined that a technology company could make taxis cool. These brands demonstrate what marketing can achieve when it thinks disruptively,” says the report.

Of course, this varies by sector. The survey shows that marketers in the telco, energy and technology sectors are more focused on driving innovation than those in transport, media or automotive.

This points to the high levels of disruption already being seen in the first three industries. But other sectors will need to follow suit or risk being disrupted in the future.

Ten years ago, nobody would have imagined that a technology company could make taxis cool. These brands demonstrate what marketing can achieve when it thinks disruptively.

“The marketers who think and act disruptively will be critical to keeping pace with the consumers of tomorrow. Companies which don’t reorient themselves around the consumer will be overtaken by those which do,” says Dentsu.

However, for innovation to be successful marketers need the budget to experiment. Yet almost half (48%) of marketers believe securing long-term investment is the biggest challenge facing CMOs in delivering their strategy.

Nevertheless, marketers do expect their marketing budgets to go up in the short-term. The survey shows that six in 10 marketers expect spend to go up over the next 12 months, with 43% planning for increases of 5% or more and just 5% expecting to see budgets fall.

In the UK, marketers are a little more cautious. While nearly three-quarter (73%) expect budgets to rise, 56% say that increase will be up to 5% and only 17% that it will be more than 5%. Some 18% expect budgets to be flat and 9% that they will decline.

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Comments
  • Julian Pratt 2 Aug 2018 at 8:55 am

    Disruption is lovely and all – epochs are measured by revolutions.

    But “disruptors such as Dollar Shave Club and Uber” aren’t building their sustainable business models on annual revolutions.

    Its great to shake things up a bit, but unless you are orienting your business at what the customer wants, you won’t survive.

    FMCG can ride the fads from gin and tonic to bourbon and cola and back all they like, but in services, you need to put the customer at the heart of what you do.

    But that is the US you.
    Brave new worlds, trash it and move on, always a new burial ground to build on. 😉

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