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Marketing Spending Recedes As CMOs Are Challenged To Deliver Results

By Ewan McIntyre | October 19, 2017 | 0 Comments


Throughout the year Gartner for Marketing Leaders publishes a range of primary research, looking at marketing’s strategy, how it’s organized and resourced, the channels favored by marketers, and the scope and effectiveness of customer experience efforts (to name but a few – subscription required). Perhaps one of the most hotly anticipated pieces of research is the annual CMO Spend Survey, and rightly so. Understanding the spending priorities for CMOs and marketing leaders provides essential environmental context for all marketers.

Gartner’s 2017 / 2018 CMO Spend Survey

A year ago we blogged about the 2016 CMO Spend Survey, stating “this year’s survey is generally a feel-good story for marketing leaders”.  Things are less sunny this year . 2017 / 2018 CMO spend survey data shows that marketing budgets have receded, following three consecutive years of growth. Budgets have dropped to 11.3% of company revenue, falling from the 2016 / 17 peak of 12.1% of company revenue.

budget 2017

It’s important to note that the descent from 2016’s peak is not steep (yet), so now is not the time to panic. But it is the time to take stock – to think hard about how marketing’s strategy and spend commitments deliver demonstrable value to the business. Gartner’s CMO Strategy Survey (the sister of the CMO Spend Survey) identified marketing leaders’ challenges across core areas within marketing’s purview, including:

  • Marketing’s skills regarding martech acquisition and management
  • The focus of marketing analytics programs
  • Challenging relationships with key stakeholders, such as CFOs

And these challenges are reflected in the findings of this year’s CMO Spend Survey:

  • CMOs have pulled-back on the proportion of budget allocated to martech, falling from 27% of the marketing budget in 2016 to 22% in 2017.
  • Marketing analytics investments represent the single biggest area of investment, taking 9.2% of budget in 2017, but questions abound regarding how well aligned analytics efforts are to delivering strategic measures to CMOs.
  • CMO’s relationships with CFOs are uneasy, not surprising when half CMOs still use basic techniques to build their budgets, rather than modelling the returns that their budget will deliver.

The growth of marketing’s budgets and accountability go hand-in-glove with a growth in expectations on marketing’s performance. The deal is simple – the more you get, the more you’re expected to deliver. CMOs and marketing leaders must accept the budget / performance quid pro quo, or face further cuts in future years.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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