Gartner CMO Spend Survey Reveals Budgets
Have Fallen to Their Lowest Level in Recent History
Marketing budgets have fallen to their lowest recorded level,
dropping to 6.4% of company revenue in 2021 from 11% in 2020,
according to Gartner, Inc. In the annual Gartner CMO Spend Survey,
Gartner surveyed 400 CMO and marketing leaders in North America,
the UK, France and Germany from March 2021 through May 2021,
tracking the critical areas marketers are investing in and where
cuts are being made from people, programs and technologies.
“Despite facing in-year budget cuts in 2020 due to the pandemic,
most CMOs expected budgets to bounce back in 2021. This budgetary
optimism was misplaced, as marketing budgets have fallen to their
lowest level in the history of Gartner’s CMO Spend Survey (see
Table 1),” said Ewan McIntyre, co-chief of research and vice
president analyst in the Gartner for Marketers practice. “However,
these cuts have been a slow burn over the course of the last year,
where many marketing budgets have not recovered what was originally
lost.”
Table 1 2021 Marketing Budget of % of Total
Revenue
2021
2020
2019
2018
2017
2016
2015
2014
Marketing Budget (% of Total
Revenue)
6.4
11.0
10.5
11.2
11.3
12.1
11.4
10.2
N=400 marketing leaders (2021); 342 (2020); 342 (2019); 618
(2018); 350 (2017); 375 (2016); 424 (2015); 363 (2014); excluding
“Don’t know”. Q. What percentage of your revenue is allocated to
marketing expense budget for the current fiscal year? Source:
Gartner (July 2021)
The annual Gartner CMO Spend Survey, 2021 revealed that no one –
regardless of company size or industry – has escaped swinging cuts
in marketing budgets. In fact, no industry achieved a double-digit
budget in 2021 (see Table 2). Travel & hospitality,
manufacturing and tech product companies have experienced the
greatest cuts in 2021.
Meanwhile, consumer products and goods (CPG) companies reported
the strongest 2021 marketing budgets at 8.3% of company revenue.
Large enterprises got hit the hardest – companies with revenue of
more than $2 billion reported the lowest average marketing budget
of just 5.7%. On the other hand, companies with revenue of under
$500 million reported the highest allocation to marketing with an
average budget of 8.6% of revenue.
Table 2 Percentage of Revenue Allocated to Marketing
by Industry, 2021 vs 2020 Mean Percentage of Budget
Shown
Industry
2021
2020
Consumer Products
8.3%
10.8%
Financial Services
7.4%
10.7%
Healthcare
7.2%
9.9%
Retail
6.3%
10.5%
Travel and Hospitality
5.4%
10.2%
Media
5.8%
12.0%
Manufacturing
5.8%
12.7%
IT & Business Services
5.9%
9.6%
Tech Product
5.0%
11.4%
Total
6.4%
11.0%
N=400 marketing leaders (2021); 342 (2020); 342 (2019); 618
(2018); 350 (2017); 375 (2016); 424 (2015); 363 (2014); excluding
“Don’t know”. Q. What percentage of your revenue is allocated to
marketing expense budget for the current fiscal year? Source:
Gartner (July 2021)
CMOs Reprioritize Spend Amid Deep Budget Cuts
Gartner research shows CMOs have shifted spending commitments
across their channels and programs, with pure-play digital channels
– owned, paid and earned – dominating those priorities and
accounting for 72.2% of the total marketing budget.
When looking at the largest resource allocation – agencies,
media, labor and paid media – agency spend continues to decline.
“Albeit a small dip from 23.7% in 2020 to 23% in 2021, this
continual change indicates significant in-housing activity, as CMOs
reimagine the capabilities that can be supported by their internal
teams, “added McIntyre.
CMOs report that 29% of work previously carried out by agencies
has moved in-house in just the last 12-months alone. The focus of
in-housing is changing as well – with brand strategy, innovation
and technology, and marketing strategy development making up the
top three capabilities areas CMOs are moving to internal teams.
Meanwhile, marketing technology (martech) continues to dominate,
taking up 26.6% of the total budget.
Digital Commerce Tops Program Spend
2020 and 2021 have seen drastic changes to customer buying
journeys – both B2C and B2B alike, forcing even digital late-comers
to accept the inevitable shift to online channels. When looking at
budget allocation by programs and operational areas, CMOs report
digital commerce makes up 12.3% of the total budget. Likewise,
marketing operations and brand strategy make up 11.9% and 11.3% of
the total budget.
However, while marketing analytics still commands 11% of the
total budget, it has continuously dropped in prioritization – now
in the fourth position in 2021. “CMOs continue to invest in
marketing data and analytics, however, for many, the results have
failed to live-up to expectations,” said McIntyre. “Given recent
and upcoming regulations, and changes in data collection, we expect
this investment area to continue to be a strategically important
capability, but also to continue to fluctuate until uncertainties
subside.”
For more details, tune in to the webinar Gartner CMO Spend
Survey 2021: Reprioritize Spending to Fuel Postpandemic Growth on
14 July, 2021 at 10:00AM ET. Gartner for Marketers clients can
learn more in the report “The State of Marketing Budgets in 2021:
Insights from Gartner’s Annual CMO Spend Survey.”
About the Gartner Marketing Symposium/Xpo
Gartner analysts will discuss the key issues facing CMOs during
the Gartner Marketing Symposium/Xpo, taking place virtually August
31 – September 2. This conference provides marketing leaders
actionable advice about the trends, tools and emerging technologies
they need to deliver business results. Gartner analysts address the
biggest opportunities, challenges and priorities marketers face
today, including data and analytics, customer experience, content
marketing, customer insight, marketing technology (martech) and
multichannel marketing. Follow news and updates for the event on
Twitter at #GartnerMKTG.
About Gartner for Marketers
Gartner for Marketers provides the objective, expert advice, and
proven tools that CMOs and other marketing leaders need to seize
the right opportunities with clarity and confidence, and to stay
ahead of the trends that matter. With in-depth research and
analysis, Gartner for Marketers helps you focus on the
opportunities with the greatest potential to deliver results. More
information on Gartner for Marketers is available online at
www.gartner.com/marketing. Follow news and updates from the Gartner
Marketing practice on Twitter and LinkedIn using #GartnerMKTG.
About Gartner
Gartner, Inc. (NYSE: IT) is the world’s leading research and
advisory company and a member of the S&P 500. We equip business
leaders with indispensable insights, advice, and tools to achieve
their mission-critical priorities today and build the successful
organizations of tomorrow.
Our unmatched combination of expert-led, practitioner-sourced
and data-driven research steers clients toward the right decisions
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fuel the future of business, visit gartner.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210714005113/en/
Kelly Blum Gartner +1 571 303 5754 kelly.blum@gartner.com Gloria
Omale Gartner + 44 (0) 1784 268 792 gloria.omale@gartner.com
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