Gartner’s annual CMO Spend Survey tracks shifts in budgets that reflect marketing’s growing complexity.
Our 2015-2016 research reveals that marketing budgets, on average, total about 11.4% of revenue at large companies with +$500 million in annual revenue today. For a company with $1 billion in revenue, that represents a marketing budget of $114 million.
Apply 25% or more of that that budget across nine categories of digital marketing technologies and techniques, and it soon becomes clear why even the most generous budgets feel stretched.
A look at survey results over the past four years show:
- Digital advertising accounts for the largest share of the digital marketing budget (12.4%), but the portion of budget dropped, albeit slightly, since the prior year. As more digital and mobile ad inventory become available, pricing is likely to further drop and contribute to a situation characterized by media agency Magna Global as “digital deflation.”
- The share of budget allocated to search marketing, including advertising, also peaked in 2014.
- Budget has shifted to another measurable category: digital commerce. Gartner Research Director Jennifer Polk’s report, “Digital Commerce Spending and Expectations Are on the Rise,” explains what this trend means for marketers and how they can capitalize from it. (Subscription required.)
- Mobile marketing has gone from 7.4% of the digital marketing budget in 2012 to 11% in 2015, an increase that permits marketers to get closer aligned to the way that consumers use digital media.
There are signs that 2016 is shaping up as yet another year of changes, challenges and opportunities for marketers.
To be sure, marketers will also need to be collaborative and agile to support innovation and creativity. “At a large company, innovation is akin to collaboration. If you can solve collaboration, you’ve actually solved innovation at scale,” said Scott Lake, Priceline.com’s director of product planning and strategy, at a Digiday event. We couldn’t agree more.
Or consider Proctor & Gamble CMO’s selection of a new partner to handle the bulk of its media planning and buying in North America. The partner “demonstrated superior and proven performance in the area of data analytics, planning and buying, innovation, talent and financial value,” P&G Global Brand Officer Marc Pritchard told the WSJ.com.
In the coming year, you can count on learning more from Gartner for Marketing Leaders about these traits, which are applicable to both in-house marketing teams and external partners in other organizations, in all facets of marketing in a digital world.
See “Digital Marketing Comes of Age in Gartner’s CMO Spend Survey 2015-2016,” for select survey highlights. Gartner for Marketing Leaders clients can read more in “CMO Spend Survey 2015-2016: Digital Marketing Comes of Age.