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Marketing budgets are different than they used to be.
According to Gartner's CMO study, their share of company revenue will decline by an average of 15% from 2023 to 2024. Gartner's CMO survey was conducted between February and March among 395 marketing decision makers in Europe and the United States.
Although marketing budgets have not yet returned to pre-pandemic levels, CMOs are optimistic on at least one front. It's everyone's favorite two-letter acronym: AI.
Are you tightening your purse strings? According to the survey, marketing budgets averaged 7.7% of total company revenue this year, down from last year's average of 9.1%. In 2023, this number fell slightly from 9.5% in 2022, but rebounded from a pandemic-era low of 6.4% in 2021. According to Gartner, this decline represents the arrival of a new “less era” in marketing.
- In the four years before the pandemic, the average marketing budget was only 11% of total revenue.
- However, in the four years since the peak of COVID-19 infections, the average has fallen to about 8%.
Gartner found that only a quarter of CMOs said they had enough capital to execute on their 2024 strategies.
But the latest CMO study from Deloitte, Duke University's Fuqua School of Management, and the American Marketing Association finds a different story, with marketing budgets as a percentage of company revenue slightly increasing from 9% to 10% from fall 2023 to spring 2024. reported to have increased.
AI Heart Eye: Gartner's 2024 CEO and Senior Business Executive Survey found that with marketing budgets shrinking, most CEOs believe growth will be a top strategic priority in 2024 and 2025, and CMOs believe that many If so, we are tasked with helping you achieve that.
“Technology is typically the go-to solution for solving productivity challenges, eliminating costly drudgery, enhancing functionality, and unlocking new opportunities,” the report said. the authors write. “In 2024, there is no technology more promising than GenAI.”
According to the report, only 5% of CMOs say AI is not an investment priority this year, and more than three-quarters expect AI to have a positive impact on marketing.
Reset priorities: Overall, the average investment in marketing technology as a percentage of marketing budgets is on the decline, from about 29% in 2018 to about 24% in 2024. Paid media spend moved in the opposite direction, increasing from about 23% of marketing budgets. In 2018, it was about 28%, and this year it was about 28%.
Based on allocation to key resources, paid media received the largest average share of marketing budget, followed by martech, workforce, and agencies, in the same order as last year's report.
Change channel. Search advertising had the highest average percentage of digital channel budget, followed by social, digital display, SEO, and email marketing. Event marketing had the highest average share of offline channel budgets, followed by sponsorship and linear TV.
