Marketing budgets can tell us a lot about the state of the sector today and give us insights into how marketing might evolve. A recent report by Gartner surveyed 342 marketing executives in North America and the UK, from companies with $500 million to $5 billion or more annual revenue. The report details how much companies spend on marketing, how their budgets are built, and how they might evolve in 2020. It also dives into what CMO budgets reveal about digital channels and technology in marketing today.
Here’s a summary of what CMO budgets say about the priorities of marketing departments today, and how things are likely to evolve in the future.
There is a proliferation of technology solutions available to today’s marketers. This year’s Gartner report showed a small decrease in MarTech spend, and past years have shown fluctuation in MarTech budgets. When compared to agencies, for example, technology has proven to be a less stable investment. Some of the reduction of spend here is related to a lack of resources, and some of it is simply marketers spending less to focus more on the type of MarTech they are adding to their portfolios.
When it comes to paid media, digital is king
In the report, paid media budget is up 3 percentage points from last year to make up 25% of total marketing budgets. Within those investments, the spend on digital continued to increase, as it has in previous years. As a whole, digital ad investment represents an average of 16% of total marketing budgets. The digital spending trend is set to continue: 78% of CMOs were confident that they would increase digital investments in 2020. And even in the case of economic uncertainty, 37% of CMOs expect to increase digital ads investments.
Analytics play a big part in strategy
CMOs are investing most heavily in competitive analysis and analytics to plan their strategies for the 18 months to come. This points to a strong commitment to data-driven marketing. In fact, another Gartner report on marketing data and analytics in 2018 found that 76% of those surveyed relied on data to make marketing decisions.
Agencies remain an important pillar for large corporations
Gartner’s survey found that 63% of respondents moved some aspect of the work they had attributed to agencies to in-house teams. However, that movement didn’t correspond to a big shift in budget, meaning it didn’t significantly impact the amount CMOs were willing to invest in agencies.
Although in-housing tends to be frequently pointed to as a major challenge for agencies, these findings indicate that it isn’t necessarily a threat. Instead, the survey points to a shift in the kinds of agency services CMOs are investing in: fewer commoditized services, but more long-term services like strategy and digital transformation. Marketers value agencies’ ability to improve operational efficiency, produce high-quality work, and offer expertise, so agencies are still playing a key role in marketing.
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Kat is the Content Marketing Manager here at Paragone. She keeps her finger on the pulse to bring our readers the latest news about our platform’s solutions and online ad tech.