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For Marketers, Budget-Related Stress Remains Low Despite Inflation Hitting a High

By Ewan McIntyre | May 23, 2022 | 0 Comments

Marketing

Gartner’s annual CMO Spend and Strategy Survey is just about to hit the streets. In 2022 the findings, as they often do, show CMOs holding a confident outlook despite growing geopolitical uncertainty and macroeconomic headwinds.

The 2022 CMO Spend and Strategy Survey was fielded between February through March 2022. As with previous years, the survey captures the budget and spending priorities of the senior-most marketers in large enterprises. This year we surveyed 405 CMOs and other marketing leaders in North America, as well as Northern and Western Europe. The survey spanned nine major industries, including consumer products, financial services and manufacturing. And, while revenue of respondents varied, almost three quarters reported annual revenue of more than $1 billion.

Below is a taster (or perhaps an amuse-bouche) of the feast of survey findings that I will be presenting on Monday May 23 during the Gartner Marketing Symposium/Xpo that’s taking place virtually through Wednesday May 25. If you would like to get your teeth into the main findings of the survey, there’s still time to register.

Budgets Build Back, But Lag Pre-COVID-19 Levels

Average marketing budgets have climbed to 9.5% of total company revenue in 2022, an increase from 6.4% in 2021. While marketing budgets are increasing this year, they still lag pre-pandemic spending levels – the average marketing budget between 2018 and 2020 was 10.9%.

As ever, the topline average masks industry variances, with respondents from financial service brands reporting the highest budget as a proportion of company revenue. Meanwhile, CMOs in consumer products brands have seen their budgets stall in 2022, as cost pressures squeeze the spending power of consumers.

Despite Warning Signs, CMOs Shrug-off Inflation

So, does the impact of inflation on consumer product brands act as a warning to other industries? Seemingly not. While inflation is at the forefront of almost every consumer’s mind, most of the CMOs we surveyed appear unphased by current and upcoming fiscal challenges . For example, the majority of CMOs surveyed thought inflationary pressures hitting their business and their customers will have a positive impact on their strategy and investment in the year ahead.

Generally a spirit of positivity pervades, despite the slew of negative news stories about the Russian invasion of Ukraine, the impact of China’s continuing lockdowns on already-stretched supply chains and unprecedented talent costs and competition. But CMOs must take care – stalling growth and increasing costs make for a difficult fiscal landscape. You may be feeling good about those budgetary gains you secured in early 2022, but they may not last the year.

Digital-first Gives Way to Hybrid Multichannel Marketing

Offline channels are staging a fightback following a couple of strong years of digital channel investment. While digital spend still accounts for the majority of marketing’s channel budget, the split between online and offline spending is more finely balanced than in previous years – on average 56% going to online channels and 44% allocated to offline.

In North America and Europe, customer journeys have recalibrated post-lockdown. Offline channels that were heavily impacted by cuts in 2020 and 2021 are bouncing back, as CMOs are switching away from a digital-first mindset into a hybrid, multichannel approach. Why so? Well because the golden rule of marketing is to meet the customer where they are, not where you wish them to be. Understanding exactly where your customers are, and orchestrating your channel plans around their journeys should be a strategic imperative in 2022.

Want to Know More?

Are you interested in taking a deeper look at these findings? Would you like a more detailed view of marketing channel allocations? Do you want to know about marketing’s strategically important capabilities, and understand its resourcing challenges? Join me on the virtual stage at Gartner Marketing Symposium/Xpo here. And look out as we publish the findings from this year’s survey in the coming days.

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