71% of CMOs Believe They Lack Sufficient Budget to Fully Execute Their Strategy
“Suppressed budgets, increasing costs and lower productivity are squeezing CMOs’ spending power,” said Ewan McIntyre, Chief of Research and VP Analyst in the Gartner Marketing practice. “As volatility becomes the new normal, many CMOs are pricing disruption into their 2023 plans.”
Figure 1. 2023 Marketing Budget as a Percent of Total Revenue (2019-2023)
Source: Gartner (May 2023)
CMOs have seen technology investments tumble into new lows of unproductivity, with utilization rates falling from 58% in 2020 to 42% in 2022, according to Gartner research. For this reason, 75% of marketers report being under pressure to cut martech spend this year to deliver better ROI. However, the highest reported investment increase across all major marketing resources by CMOs this year goes toward marketing technology, while the largest decrease to labor.
“Like gamblers looking to write-off their losses with the next bet, CMOs are attracted to the allure of newer technologies, no doubt amplified by the chatter around generative AI,” said McIntyre. “They are hungry to see its potential to transform marketing campaigns and content creation. While this hunger to invest is understandable, it illustrates the sunk-cost fallacy that more tech is always better.”
“The willingness to let the majority of their martech stack sit idle signifies a fundamental resource disconnect for CMOs. It’s difficult to imagine them leaving the same millions of dollars on the table for agencies or in-house resources. This trade-off of technology over people will not help marketing leaders accelerate out of the challenges a recession will bring.”
CMOs Expected to Increase Social Advertising Spend and Decrease Search
Paid media leads in budget allocation across major marketing resources (25.6% of overall 2023 budget), followed by marketing technology (25.4%), labor (24.6%) and agencies (23.3%).
Social advertising, which currently takes up the most paid media budget, was identified as the top digital channel to receive increased investment this year, followed by digital video advertising and influencer marketing. Search advertising was identified by the most respondents to receive decreased investment in 2023 (see Figure 2).
Figure 2. Change in Investments for Digital Channels in 2023 (Percentage of Respondents)
Source: Gartner (May 2023)
About the Gartner Marketing Symposium/Xpo
The Gartner Marketing Symposium/Xpo is taking place May 22-24, 2023 in Denver, CO, providing marketing leaders with actionable advice about the trends, tools and emerging technologies they need to deliver business results.
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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. Members of the media can find additional information and insights in the Gartner Marketing Newsroom.
