DENVER--(BUSINESS WIRE)--May 22, 2023--
Seventy-one percent of CMOs said they lack the budget to fully execute their strategy in 2023, according to a Gartner, Inc. survey of 410 CMOs and marketing leaders.
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Figure 1: 2023 Marketing Budget as a Percent of Total Revenue (2019-2023)
The annual Gartner 2023 CMO Spend and Strategy Survey was conducted in March and April 2023. Survey respondents were CMOs and marketing leaders in North America and Northern and Western Europe across different industries, company sizes and revenue, with the vast majority of respondents reporting annual revenue of over $1 billion. Gartner experts presented the findings today during the Gartner Marketing Symposium/Xpo, which is taking place here through Wednesday.
The survey revealed that marketing budgets compose 9.1% of total company revenue in 2023, remaining relatively flat but still dipping slightly from the 9.5% reported in 2022 (see Figure 1).
“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.”
Seventy-five percent of CMOs are facing increased pressure to “do more with less” to deliver profitable growth in 2023. Because of this, 86% of marketers said they must make significant changes to how the marketing function works to achieve sustainable results.
“In 2023, CMOs need to become a new type of enterprise leader. This goes beyond serving at the helm of the brand but also assuming a more business-focused role that pivots into a period of investing for profitability versus growth. Those that carry on status-quo will face significant challenges in the near-term,” said McIntyre.
Majority of Marketers Under Pressure to Cut Technology Spend
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)
Digital Channel | Increasing Investment | Decreasing Investment |
Social advertising | 53% | 14% |
Digital video advertising | 51% | 16% |
Influencer marketing | 49% | 12% |
Digital display advertising | 46% | 18% |
SEO | 46% | 20% |
Retail media networks | 43% | 17% |
Content and messaging | 41% | 17% |
Digital audio advertising | 41% | 21% |
Email marketing | 41% | 19% |
Search advertising | 40% | 26% |
Digital Out of Home | 37% | 21% |
SMS / push notifications | 33% | 16% |
Source: Gartner (May 2023)
CMOs Require More Than Wishful Thinking in a Disruptive Environment
McIntyre said growth, yield and return must be foremost in CMOs’ minds as they go beyond standard prioritization. CMOs should double-down on scenario planning and balance efficient near-term execution with investments that enable them to build future-forward capabilities.
Gartner clients can read more in the report: " The State of Marketing Budget and Strategy in 2023 — Insights From the CMO Spend and Strategy Survey."
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. Follow news and updates coming out of the conference on the Gartner Newsroom on Twitter and LinkedIn using #GartnerMKTG.
About Gartner for Marketers
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.
About Gartner
Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit gartner.com.
View source version on businesswire.com:https://www.businesswire.com/news/home/20230522005585/en/
CONTACT: Matt LoDolce
Gartner
matt.lodolce@gartner.comKatie Costello
Gartner
katie.costello@gartner.com
KEYWORD: COLORADO UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: TECHNOLOGY PROFESSIONAL SERVICES BUSINESS COMMUNICATIONS SOCIAL MEDIA SEARCH ENGINE OPTIMIZATION SEARCH ENGINE MARKETING DIGITAL MARKETING SOFTWARE NETWORKS CONTENT MARKETING
SOURCE: Gartner, Inc.
Copyright Business Wire 2023.
PUB: 05/22/2023 01:30 PM/DISC: 05/22/2023 01:30 PM
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