Abstract:
- Budget reduction. Marketing budgets decreased to 7.7% of company revenue in 2024, a decrease of 15%.
- Shift in strategy. CMOs are increasingly adopting data-driven approaches and cost-effective strategies to address budget cuts.
- Utilize AI. The majority of CMOs recognize artificial intelligence as a key tool to increase efficiency and drive growth despite financial constraints.
A recent study by Gartner revealed that marketing budgets will decrease by an average of 15% in 2024.
The survey was conducted between February and March of this year and included approximately 400 chief marketing officers and marketing leaders across 10 different industries, company sizes, and revenues.
The results of the CMO study were revealed at the Gartner Marketing Symposium/Xpo on May 13, where Ewan McIntyre, VP analyst and head of research for Gartner Marketing Practice, spoke about inflation, digital return on investment (ROI ), level of interest.
“CMOs are living in the age of response,” says McIntyre. “In his four years before the pandemic, his average marketing budget was 11% of his overall revenue. In the four years since then, anemic patients have decreased to his 8.2%.”
It's time to rethink your marketing strategy
CMSWire's State of the CMO 2024 report echoes Gartner's findings, with 31% of marketing leaders claiming that justifying budgets is their biggest challenge. Additionally, 40% said lack of budget is a major barrier to improving their organization's digital customer experience.
Will Yang, director of growth and marketing at Instrumentl, told CMSWire that his company has indeed seen a change in the allocation of its marketing budget. But rather than seeing this as a setback, they see it as an opportunity to rethink and rebuild their marketing strategy.
“We lean heavily towards a data-driven approach and focus on understanding the customer and their journey,” he said. “In this way, you can better allocate your funds and optimize your strategy to produce better results while reducing your budget.”
Yang added that the company is considering more cost-effective marketing strategies, such as content marketing and leveraging social media channels, to provide a broader reach and reduce costs.
“We are focused on building meaningful relationships with our clients and partners, thereby driving organic growth,” he explained. “With marketing budgets likely to decline, we will have to be more innovative and resourceful, and will be inspired to make smart decisions to not only survive the downturn, but thrive in it. ”
Related article: Is your brand marketing strategy outdated?
A roadmap to meaningful business outcomes
Tealium CMO Heidi Block said that as marketing budgets shrink, CMOs and VPs of marketing are increasingly expected to maximize efficiency. But instead of trying to do more with less, the focus should be on strategic initiatives that drive meaningful business outcomes, she added.
One area she pointed to is data and performance evaluation. “Continually evaluate the performance and returns of your marketing programs. There will always be some programs that aren't offering the best returns, so consider putting that money elsewhere.” she said.
Another strategic focus is refining strategies, she explained. Block, a CMSWire contributor, says, “Regularly review and adjust your positioning and messaging to ensure it resonates with current market needs and pain points, and to focus on specific use cases and verticals where your product excels.” There is a possibility that you will be able to guess.”
Bullock also recommended considering partnerships for greater impact, rather than keeping efforts in-house or leaving them to marketing departments.
“Work with partners on your marketing efforts to expand your reach, share your workload, and work together to scale your results,” she said. For example, she added, webinars and events can include collaborative messaging, in which case marketing can have more impact and split up the work.
Will AI marketing be a savior?
Gartner's McIntyre argues that despite these financial challenges, the majority of CMOs believe that artificial intelligence (AI) may be the answer.
“There's a light at the end of the tunnel, and that's AI,” he said. “CMOs can leverage AI to accelerate growth and offset declining resources. Revenue budgets look set to suffer, but AI has the potential to drive new efficiencies and productivity. there is.”
According to Gartner research, 64% of CMOs say they lack the budget to execute on their 2024 strategies. “However, GenAI provides an opportunity to extend the impact of marketing functions far beyond budget constraints,” McIntyre said.
Bullock added that her company uses AI to assist in areas such as landing pages, emails, selected design elements, and even SDR flows. “This isn't about replacing people, it's about helping them with their time and removing some repetitive tasks,” she said.
In the latest episode of CMSWire's CMO Circle, Karna Crawford, CMO at Marqeta, argued that AI has the potential to improve marketers' productivity and help scale personalization efforts.
“We have a strong focus on AI within our product and technology teams to help improve operational efficiency, productivity, and streamline the work of both our developers and customer developers,” she said in an interview. I did.
Crawford added that he spends a lot of time helping teams think about AI in marketing as a scaler, with technology acting as an enabler that brings humanity to what they do.
Related article: AI in Marketing: 10 Skills Essential for Success
Biggest Marketing Changes in the Next 5 Years
Looking to the future, marketers may see AI as a savior, but there is much work to be done. McIntyre said CMOs are excited about implementing generative AI, but many feel uncertain about how to structure their AI strategy.
Beyond artificial intelligence, CMOs also feel that further digitalization is inevitable, according to a CMSWire report. Marketing teams need to understand which aspects of digital transformation are best for their organization and which of the temporary policies they put in place during the early stages of the pandemic should be made permanent.
“Everything is going to become more digital, so we have to adapt to that kind of marketing,” said one state CMO survey respondent. “CMOs must take advantage of ever-evolving technology to devise innovative ways to deliver desirable customer experiences and integrate ROI measurement to drive greater business outcomes.”
