CMO Survey 2018 Market data cut

Contents Sample breakdown Market highlights CMO Survey 2018 Contents Sample breakdown Market highlights Detailed findings by market

Sample breakdown CMO Survey 2018 Market distribution Annual revenue distribution Market No. respondents Australia 100 China France Germany Italy Japan Russia Spain United Kingdom United States TOTAL 1000 Countries are making the transition to a digital economy rapidly across the three key dimensions of dynamism, inclusion and trust. But, the continued pace of this transition relies not only on technological infrastructure; it relies on the people who will use that technology. How engaged people are in the digital economy—how optimistic they are that it will benefit their own lives as well as society more broadly—is a critical component of the successful transition to a digital economy. In this, the first year of the Digital Society Index, we find that digital engagement stands at 45%. We define this score as the proportion of people believing that the future impact of digital technology will be positive overall, as well as in terms of its ability to create jobs and address societal challenges Overall, more mature economies appear to be suffering from lower levels of digital engagement. For example, China and Russia have the highest levels of engagement at 73% and 50% respectively, while Germany (38%) and Japan (32%) have the lowest. DENTSU AEGIS NETWORK

Contents Sample breakdown Market highlights CMO Survey 2018 Contents Sample breakdown Market highlights Detailed findings by market

CMO Survey 2018 Australia With 51% of CMOs in Australia expecting their budget to increase over the next 12 months, this is the second lowest response across the markets we analysed. CMOs in Australia see engaging consumers as the hardest phase of the consumer lifecycle today and in the future, the highest response for both timeframes. Although 71% of CMOs in Australia believe that targeting real people not proxies is important to increasing the value of consumer engagement, this is the lowest response across all markets. CMOs in Australia cite insufficient control over digital investments or programmes across the company as the biggest obstacle to delivering their marketing strategy—the only market that identifies this as the top response.

CMO Survey 2018 China CMOs in China are the most likely to see a data breach as the #1 strategic risk they’re facing. Lack of integration across all elements of the customer experience is the biggest obstacle China CMOs face in the delivery of their marketing strategy. CMOs in China are the most likely to identify securing long-term customer relationships as the way that the marketing function supports business growth. 90% of CMOs in China identify using data to target real people, not proxies, as the most important way of maximising the value of consumer relationships—the highest response across all markets.

CMO Survey 2018 France Delivering business transformation is main role of the marketing function, according to CMOs in France—the only market that identifies this as the top response. 77% of CMOs in France see integrating brand engagement and commerce/conversion as the most important way of maximising the value of consumer engagement over the next 2-3 years—the top response across all markets. CMOs in France are the most likely to see meeting short-term budgets as the way that the marketing function supports business growth.

CMO Survey 2018 Germany 64% of CMOs in Germany see developing high-quality content as the most important way of maximising the value of consumer engagement over the next 2-3 years—the lowest response across all markets. 59% of CMOs in Germany see creating engaging, tech-enabled user experiences as the most important way of maximising the value of consumer engagement over the next 2-3 years, the second lowest response. 73% of CMOs in Germany identify activating consumers are the hardest phase of the consumer lifecycle to deliver against today—the second highest response (behind China). 67% of CMOs in Germany believe that data protection regulation (such as GDPR) will make it harder to build a direct relationship with consumers—the highest response across all markets.

CMO Survey 2018 Italy Italy is the only market in which ensuring effective brand management is the top response for the primary role of the marketing function (joint top with delivering business growth) Italy is the only market that identifies driving revenue growth as the top response for how marketing supports business growth (joint top with securing long-term relationships) Retaining consumers is the key challenge for CMOs in Italy—nearly half identify it as the most challenging phase of the consumer lifecycle, both today and in 2-3 years At 84%, CMOs in Italy are most likely to say that developing high-quality content is important to maximising the value of consumer engagement over the next 2-3 years CMOs in Italy are also the most likely so say that connecting brand proposition to positive societal impact is the key to maximising consumer engagement, with 85% believing this to be important

CMO Survey 2018 Japan CMOs in Japan are the most pessimistic about future marketing budgets—just 35% expect their budget to increase, the lowest rate across all markets. Increasing levels of competition is the #1 risk for CMOs in Japan—the only market in which this is the case. 64% of CMOs in Japan see enhancing margin growth as the way they support business growth—the only market for which this is the top response. Only 38% of CMOs in Japan believe they have a clear data strategy that will drive better consumer engagement, the lowest response across all markets. 57% of CMOs in Japan say they have sufficient impact on the direction and delivery of their data strategy—the lowest response across all markets.

CMO Survey 2018 Russia 76% of CMOs in Russia see delivering business growth as the primary role of the marketing function—the highest response across all markets. 80% of CMOs in Russia believe that creating engaging, tech-enabled user experiences is important to maximise the value of consumer engagement over the next 2-3 years—the top response across all markets. 44% of CMOs in Russia say that there is now more consumer data available, but it's harder to extract insight from it. This is the lowest response to this question across all markets.

CMO Survey 2018 Spain 66% of CMOs in Spain think that data protection legislation (e.g. GDPR) will make it harder to build a direct relationship with their consumers, the second highest response behind Germany with 67%. 62% of CMOs in Spain plan to invest more in digital media platforms over the next 2-3 years—the second highest response behind China (66%). 65% of CMOs in Spain are focusing on making better use of existing consumer data in order to target them more effectively. 44% of CMOs in Spain believe that generating ideas that connect with people emotionally is ‘very important’ for their business to maximise the value of consumer engagement over the next 2-3 years, the highest response across markets.

CMO Survey 2018 United Kingdom 73% of CMOs in the UK expect their marketing budget to increase over the next 12 months, the second highest response. 64% of UK CMOs see developing the overall customer experience as the primary role of marketing—ahead of delivering business growth (63%). Just 25% of CMOs in the UK see leading disruptive innovation as the primary role of marketing, the lowest response across all markets. 74% of UK CMOs have sufficient impact on the direction and delivery of our data strategy, the second lowest response across all markets. 44% of UK CMOs say they will reduce the number of external agencies they work with—the highest proportion across all markets.

CMO Survey 2018 United States 39% of US CMOs see the ability to use data to reach real people, rather than proxies or customer segments, as the #1 strategic opportunity—the highest response (joint with Australia). 46% of CMOs in the US see leading disruptive innovation as the primary role of the marketing function—the highest response across markets. 55% of US CMOs see information overload as the main barrier they face when it comes to building better relationships with consumers over the next 2-3 years, the highest response across markets. 85% of US CMOs say they have a clear data strategy that will drive better consumer engagement (the top response). 70% of CMOs in the US believe that there is now more consumer data available, but it's harder to extract insight from it (the top response).

Contents Sample breakdown Market highlights CMO Survey 2018 Contents Sample breakdown Market highlights Detailed findings by market

Marketing budget outlook CMO Survey 2018 Marketing budget outlook How would you expect your marketing budget to change over the next 12 months?

Strategic opportunities CMO Survey 2018 Strategic opportunities In your role as a marketing leader, what are the biggest strategic opportunities you foresee over the next 2-3 years? (% ranking number 1; most popular response highlighted)   UK US China Germany France Japan Spain Australia Russia Italy The ability to use data to reach real people, rather than proxies or customer segments 31% 39% 10% 23% 27% 29% The potential of artificial intelligence, machine learning and blockchain to drive more efficient marketing spend 40% 30% 17% 18% 20% The potential for emerging digital technologies to deliver better consumer experiences 16% 19% 22% 9% 21% 14% Access to new geographic markets and consumer segments 11% 12% Direct relationships with the ad tech platforms 8% 1%

CMO Survey 2018 Strategic risks In your role as a marketing leader, what are the strategic risks that worry you most over the next 2-3 years? (% ranking first; most popular response highlighted)   UK US China Germany France Japan Spain Australia Russia Italy A data breach / misuse of consumer data 29% 21% 38% 37% 34% 14% 30% 27% 35% New consumer interfaces making it harder to ensure brand visibility 19% 22% 11% 15% 17% 24% The dominance of ad tech platforms 16% 26% 12% 7% Increasing levels of competition 13% 20% 31% 18% 25% Consumer intolerance for advertising 1% 9% Increasing trade protectionism in some markets 4% 5% 10% 8% 6%

CMO Survey 2018 Role of marketing What do you see as the primary role of the marketing function within your organisation? (% ranking within top three; most popular response highlighted)   UK US China Germany France Japan Spain Australia Russia Italy Delivering business growth 63% 58% 66% 65% 53% 56% 72% 67% 76% Leading disruptive innovation 25% 46% 35% 37% 31% 30% 32% 36% Delivering business transformation 44% 38% 55% 52% 17% Ensuring effective brand management 51% 49% 41% Developing the overall customer experience 64% 54% Understanding consumer/market trends 48%

Role of marketing: innovation CMO Survey 2018 Role of marketing: innovation What do you see as the primary role of the marketing function within your organisation? (% ranking ‘leading disruptive innovation’ within the top 3)

Key internal challenges CMO Survey 2018 Key internal challenges What are the key internal challenges you encounter to the delivery of your marketing strategy? (% ranking in top 3; most popular response highlighted)

Key internal challenges CMO Survey 2018 Key internal challenges What are the key internal challenges you encounter to the delivery of your marketing strategy? (% ranking in top 3)

Key internal challenges CMO Survey 2018 Key internal challenges What are the key internal challenges you encounter to the delivery of your marketing strategy? (% ranking in top 3)

Supporting business growth CMO Survey 2018 Supporting business growth How does the marketing function within your organisation support business growth? (% ranking in top 3; most popular response highlighted) UK US China Germany France Japan Spain Australia Russia Italy Driving revenue growth 64% 68% 61% 63% 55% 54% 66% 56% 72% Enhancing margin growth 57% 74% 58% 65% 62% 37% 52% Securing long-term customer relationships 70% 77% 83% 67% Meeting short-term budgets 40% 50% 24% 38% 22% 41% Driving cost reduction and efficiency 42% 35% 45% 47% 49% 44% 59% 34%

The consumer lifecycle CMO Survey 2018 The consumer lifecycle Which phase(s) of the consumer lifecycle do you think is the most challenging for your business to deliver against (a) today and (b) over the next 2-3 years? (% ranking in top 3) Engaging Activating

The consumer lifecycle CMO Survey 2018 The consumer lifecycle Which phase(s) of the consumer lifecycle do you think is the most challenging for your business to deliver against (a) today and (b) over the next 2-3 years? (% ranking in top 3) Converting Transacting

The consumer lifecycle CMO Survey 2018 The consumer lifecycle Which phase(s) of the consumer lifecycle do you think is the most challenging for your business to deliver against (a) today and (b) over the next 2-3 years? (% ranking in top 3) Retaining

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Effective use of data to target real people rather than proxies

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Generating ideas that connect with people emotionally

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Creating engaging, tech-enabled user experiences

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Developing high-quality content

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Integrating brand engagement and commerce/conversion

Maximising consumer engagement CMO Survey 2018 Maximising consumer engagement To what extent are the following approaches important for your business to maximise the value of consumer engagement over the next 2-3 years? (% ranking in top 3) Connecting our brand proposition to positive societal impact

Barriers to engagement CMO Survey 2018 Barriers to engagement What are the key barriers you face when it comes to building better relationships with consumers over the next 2-3 years? (% ranking in top 3) UK US China Germany France Japan Spain Australia Russia Italy Information overload 52% 55% 42% 45% 43% 31% 49% 41% Consumers' intolerance for advertising 44% 50% 38% 46% 36% 48% 53% Access to concrete consumer data 54% 39% 40% 34% Increasing levels of competition 67% 56% 58% 59% 64% 57% Fragmentation of the media supply chain 32% 33% 29% 27% 19% Data protection regulation (e.g. the EU General Data Protection Regulation) 25% 26% 37% Marketing agency capability 13% 24% 20% 21% 23% 10%

Data strategy & engagement CMO Survey 2018 Data strategy & engagement We have a clear data strategy that will drive better consumer engagement (% agreeing)

CMO Survey 2018 Data ≠ insight There is now more consumer data available, but it's harder to extract insight from it (% agreeing)

Data protection regulation CMO Survey 2018 Data protection regulation Data protection legislation (e.g. GDPR) will make it harder to build a direct relationship with our consumers (% agreeing)

Impact on data strategy CMO Survey 2018 Impact on data strategy As a marketing leader, I have sufficient impact on the direction and delivery of our data strategy (% agreeing)

Improving data capability CMO Survey 2018 Improving data capability What steps are you taking to increase your ability to utilise data in order to target consumers more effectively? (% selecting each option) UK US China Germany France Japan Spain Australia Russia Italy Acquisitions/mergers 25% 41% 16% 34% 17% 21% 30% 15% 23% Hiring specialist talent 42% 46% 74% 47% 54% 31% 85% 38% Joint ventures / partnerships 37% 52% 39% 35% 29% Purchasing consumer data 44% 24% 22% 45% Developing training programmes for existing employees 59% 49% 51% 57% Making better use of existing consumer data 64% 58% 55% 50% 65% 60% 56% Not applicable / we haven’t taken any such steps 5% 4% 2% 7% 3% 1%

CMO Survey 2018 Definition of media How do you define ‘media’ within your organisation? (% selecting each option) UK US China Germany France Japan Spain Australia Russia Italy Distribution channels 32% 43% 60% 39% 28% 30% 46% 35% 50% Content 41% 48% 65% 44% 42% 40% 47% 26% Technology 62% 56% 59% 51% 54% 55% Data 27% 67% 38% 31% All of the above 29% 17% 5% 15% 6% 10% 23% 14% 11%

CMO Survey 2018 Value from media How do you measure the value you derive from your investment in media? (% ranking in top 3) UK US China Germany France Japan Spain Australia Russia Italy Reach and frequency 48% 67% 61% 66% 44% 31% 54% 36% 34% Cost reduction/efficiency 52% 58% 42% 47% 51% 46% Sales growth 76% 75% 72% 73% 80% 68% 78% 82% 74% Brand enhancement 60% 56% 62% 63% Strategic planning 39% 41% 49%

CMO Survey 2018 Marketing ecosystem How will your partner/supplier approach change over the next 2-3 years? (% selecting each option) UK US China Germany France Japan Spain Australia Russia Italy We will bring more marketing capabilities in-house 45% 59% 70% 55% 49% 44% 42% 67% We will reduce the number of external agencies we work with 43% 22% 36% 33% 39% 30% We will increase the number of specialist marketing contractors we retain 61% 64% 50% 41% We will invest more into digital media platforms 54% 57% 66% 37% 62% 53% 56% We will work more with management consultancies 34% 18% 28% 29% 24% 27% 21%

Fully integrated solutions across all elements of the marketing mix CMO Survey 2018 Working with agencies As far as the marketing agencies you work with are concerned, how well do you think they demonstrate the following attributes? (% selecting each option) Fully integrated solutions across all elements of the marketing mix

Performance-based contracts linked to specific business outcomes CMO Survey 2018 Working with agencies As far as the marketing agencies you work with are concerned, how well do you think they demonstrate the following attributes? (% selecting each option) Performance-based contracts linked to specific business outcomes

Explicit focus on efficiency and cost reduction CMO Survey 2018 Working with agencies As far as the marketing agencies you work with are concerned, how well do you think they demonstrate the following attributes? (% selecting each option) Explicit focus on efficiency and cost reduction

Business partnering to drive execution over the long term CMO Survey 2018 Working with agencies As far as the marketing agencies you work with are concerned, how well do you think they demonstrate the following attributes? (% selecting each option) Business partnering to drive execution over the long term

145 Countries 45,000+ People 10 Network Brands About Dentsu Aegis Network Part of Dentsu Inc., Dentsu Aegis Network is made up of ten global network brands - Carat, Dentsu, dentsu X, iProspect, Isobar, mcgarrybowen, Merkle, MKTG, Posterscope and Vizeum and supported by its specialist/multi-market brands. Dentsu Aegis Network is Innovating the Way Brands Are Built for its clients through its best-in-class expertise and capabilities in media, digital and creative communications services. Offering a distinctive and innovative range of products and services, Dentsu Aegis Network is headquartered in London and operates in 145 countries worldwide with more than 45,000 dedicated specialists. 145 Countries 45,000+ People 10 Network Brands