Firms focus on innovation

17 April 2012

STAMFORD: Advertisers expect difficult economic conditions in 2012 but are maintaining their spending on innovation, Gartner has indicated.

new poll conducted by the research firm found that a large majority (85%) of CEOs believe their company's sales will be affected by adverse economic conditions this year. Region by region, executive pessimism was found to be highest in Europe and Africa.

But the report also noted that advertisers are still adopting a "growth posture" and are investing in boosting revenues.

Innovation budgets are set to be largely protected in 2012, with around 50% of the CEOs polled saying they will increase their investments in this area.

But Gartner warned that many of these expenditures may be wasted due to innovation specialists not having enough of a say in corporate strategy.

According to the survey, one in three CEOs see themselves as the innovation leaders in their companies. By contrast, specialist Chief Innovation Officers (CIOs) were "rarely" cited as playing this role.

More broadly, the CIO was seen by respondents as an "itinerant specialist", with the CFO far more likely to be seen as a "close strategy adviser".

Jorge Lopez, a vice president at Gartner, said: "Any CEO who believes that he or she is the innovation leader of the firm must retain a close direct working relationship with the CIO in this age of rapid business digitization, or risk being blindsided."

Respondents were also twice as likely to say they are planning to invest more in tech services, rather than cutting spend. In this area, the favoured destination for investment was in CRM, with mobile and cloud-based services and apps also attracting extra dollars.

The Gartner survey, which covered 25 markets, polled 220 CEOs of companies with annual revenues of $500m or more.

Data sourced from Gartner; additional content by Warc staff