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Marketers Allocate 9% of Their Budget for Innovation

By Laura McLellan | April 28, 2014 | 0 Comments

Gartner’s 2014 digital marketing spending survey validated a figure  that’s been postulated – marketers set aside 10% of their budget for activities that lead to future growth.  Of the 276 managers who responded to the question “Does your organization allocate a portion of its total marketing expense budget to innovation?”, 83% said yes.  Asking those who said yes “What percentage of your organization’s total marketing expense budget is set aside for innovation?”, the average response was 9.4%.  To obtain a copy of key findings from the survey or a replay of the summary webinar, go to .

No Surprise That Marketing’s Involved in Innovation

Innovation can mean many things.  Marketing has always been associated with creativity.  Marketing is deeply involved with – and measured on – growth.  Many  marketers have responsibility for all or the initial stages of product development, given their intimate knowledge of customers and markets.  Our research found that 42% of marketers “have a significant role in strategic planning.”  Digital marketing is known for operating in a “fail often, fail fast” mode, especially with new techniques and technologies.

A wide variety of marketing jobs include innovation in the title. Here are examples – they fall into four main categories:

General Digital Product Development Strategy
-VP, Marketing & Innovation -Director, Digital Marketing & Innovation -SVP, Global Product Management & Innovation -VP, Marketing, Innovations and Strategy
-SVP, Innovation & Growth Marketing -VP, Digital Brand Marketing & Innovation -VP, Product Brand Marketing & Innovation -VP, Marketing Strategy & Innovation
-Director of Marketing & Innovation -VP, Content Marketing &  Innovation -VP, Marketing, Innovation and RD -Chief Transformation, Innovation &  Marketing Officer
-Chief Marketing, Insights & Innovation Officer -VP, Social Marketing Innovation -SVP, Technology & Innovation Marketing -SVP, Strategy & Consumer Marketing Innovation

 The Innovation Role Crosses Functions

Of course many other functions in a company support innovation as well as marketing.  Some companies have a Chief Innovation Officer (CINO) – the majority of them position innovation as a joint responsibility with another role, such as growth, strategy, marketing, or R&D.  A Gartner conversation with recruiting firms Heidrick & Struggles and Russell Reynolds indicates most CINOs report to the CEO, with a fair share reporting to marketing, engineering or R&D. 

The chief marketing technologist (CMT), a hybrid CIO-CTO dedicated to marketing, also plays a role in innovation.  81% of companies now have the equivalent of a CMT, up from 70% a year earlier.  They help marketers scan, test and evaluate potential new technologies which can provide competitive differentiation, improve efficiency or customer experiences.  For more information, see the ChiefMarTech blog.

Google & Coca Cola’s 70-20-10 Investment Model at Work in Digital Marketing

This approach to innovation can be summarized by “now”, “new” and “next”.  The CEO of Google, Eric Schmidt, described Google’s 70-20-10 approach here, where 10% represents “truly new”.  As part of Coca Cola’s 2020 vision, in its famous marketing video on content/conversation, 10% is “high risk brand new ideas” (starts at 10:31).  Think about marketing’s ability to innovate in these three areas:

  • digital products, digital channels, digital communities and digital business strategies
  • digital capabilities to create new markets or cross industry boundaries
  • digital contributions from across the ecosystem, including customers, partners, and other stakeholders

Marketing – Masters of the Valuable

Philip Kotler, Professor of  International Marketing at the Northwestern University Kellogg Graduate School of Management, put it this way ““R&D people are the Masters of the possible; Marketing personnel are the Masters of the valuable.” Put together digital marketing’s role to “use a set of techniques, enabled by technology, which enables marketing to improve its processes to engage in a dynamic conversation with people who are influencers and buyers, and ultimately target, acquire and retain customers” with marketing’s remit to drive growth and you see why marketing has a significant budget for innovation.

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