Marketing Budgets Ebb In Gartner Survey As Brands Demand Results

After years of consistent growth, companies have flat-lined or decreased their investments in marketing.

Last year, the amount of overall revenue allocated to marketing hit a peak at 12.1% – but that, according to the Gartner CMO Spend Survey, is down to 11.3% in 2017.

Gartner’s research, released Tuesday, is based on 353 marketing executives at companies with $250 million or more in annual revenue.

The dip represents a natural recession of marketing budgets that “reflects the situation marketing leaders see themselves in within their organizations right now,” said Gartner research director Ewan McIntyre.

Brands in the retail and product manufacturing categories have been upping internal investments on marketing in reaction to their own marketing departments aggressively pitching themselves as innovation centers and growth drivers.

But “now we’re at a point where CMOs are being asked to prove accountability,” McIntyre said.

To get a little much-needed lift, brand marketers have been cutting away vendors like ballast from a hot air balloon, with the amount spent by marketing departments on mar tech tools dropping from 27% in 2016 to 22% this year.

But marketers are buying tools to demonstrate results. One of the biggest jumps in this year’s survey was “analytics,” which passed “website,” “digital commerce” and “digital advertising” to become the biggest line item on a CMO’s budget.

Despite the overall slowdown, however, digital advertising will continue to grow, said McIntyre, who noted that the decline in spending will be primarily consigned to offline media.

Two-thirds of marketers surveyed plan to increase digital ad spend in the next year, while 63% will pull back from traditional media channels.

“Putting together media-mix rates with the findings around analytics, these shifts are being made to data,” McIntyre said.

Other reasons also exist for tech companies and agencies to take heart from Gartner’s first downward CMO spending report.

For example, chief marketing execs are cutting back on internal hiring, which McIntyre said has helped secure the position of third-party technology providers despite marketers expressing a desire to in-house more capabilities.

“It’s not a moment to panic,” he said. “But when you start to see the line tapering down a bit, it’s a point where CMOs and marketing leaders need to think about what they really need to do their jobs effectively.”

 

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