CMOs: Budgets, Resources Are Constrained, Digital Investments Most Popular

CMOs: Budgets, Resources Are Constrained, Digital Investments Most Popular

by  @lauriesullivan, July 14, 2021

CMOs: Budgets, Resources Are Constrained, Digital Investments Most Popular | DeviceDaily.com

Marketing budgets as a percentage of revenue fell to their lowest level in recent history, as CMOs continue to reprioritize channels, programs and resources, according to data released Wednesday.

Data from Gartner’s annual CMO Spend Survey captures a snapshot of marketing’s budget, spending and strategic priorities. This year’s survey finds CMO’s budgets and resources are constrained, as marketers struggle to demonstrate how it can support the enterprise’s growth and transformation ambitions.

CMOs found that a swift return to pre-pandemic levels couldn’t be found. Marketing budgets as a proportion of company revenue fell from 11% in 2020 to 6.4% in 2021, their lowest point in the history of Gartner’s CMO Spend Survey.

The impact of the COVID-19 CMOs to cut budgets, but most anticipated a swift recovery and expected budgets to bounce back in 2021. In CMO Strategic Priorities Survey 2020-2021: Ambitions Threatened by Capacity, Capital and Capability, Gartner reported that 56% of CMOs expected budget growth of more than 5% in 2021, with respondents positive even if COVID-19 had negatively impacted their business’s performance.

It’s not a secret that marketing budgets have always been the first of the enterprise budgets to be cut, and the last to be restored. In the past year, CMOs proved they could do more with less, curbing spending on events, agencies and ad budgets in the face of a crisis.

Another effect of COVID-19, the data shows pure-play digital channels account for 72.2% of the total marketing budget, with CMOs indicating they’re shifting offline budgets into digital spend.

Some 29% of work that was previously carried out by external agencies has been moved to in-house teams during the last 12 months. CMOs have focused in-house efforts on high-value, strategic capabilities, such as brand strategy, innovation and technology.

While digital commerce tops the program spend, the amount spent on analytics fails to make the top three social distancing rules that transformed the buyer’s journey for B2B and B2C customers throughout 2020.

These journeys continued into 2021— the majority of customers who used a digital channel for the first time in the first wave of COVID-19 said they would continue to use them when the crisis passes.

CMOs have prioritized investment in the programs and capabilities that fuel digital commerce success. When we asked CMOs how they divide their budgets by programs and operational areas, digital commerce investments were the most popular, accounting for 12.3% of the total budget.

Marketing operations followed with 1.9%, brand strategy at 11.3%, marketing analytics at 11%, sponsorships at 9.6%, customer insights at 9.5%, content creation at 9.3%, promotions at 8.7%, loyalty programs at 8.3%, and demand generation at 8%.

 

 

MediaPost.com: Search & Performance Marketing Daily

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