Smaller budgets are also contributing to the pressure. In 2023, marketing budgets represented 9.1% of company revenue, compared to 9.5% in 2022. As CMOs grapple with how to make the most out of their declining dollars, social advertising is one category that is still on the rise. More than half—or 53%—of CMOs said they are increasing spend on social media. At the other end of the spectrum, 26% said they are pulling back on search advertising investment.
“Suppressed budgets, increasing costs and lower productivity are squeezing CMOs’ spending power,” said Ewan McIntyre, chief of research and VP analyst at Gartner’s marketing practice, in a statement. “As volatility becomes the new normal, many CMOs are pricing disruption into their 2023 plans.”
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The Gartner 2023 CMO Spend and Strategy Survey report surveyed 410 North American and European CMOs and marketing leaders between March and April of this year.
By category, CMOs in financial services are dealing with the biggest budget declines. Last year, marketing was 10.4% of revenue for financial services—this year, it is just 7.5%, Gartner found. By comparison, consumer products’ marketing budget has grown to 10.9% of revenue this year from 8% last year, and retail’s marketing is flat at 9.1% in both years.
Marketers also said they are increasing investment in technology while trying to spend less on labor.