MARKETING BUDGETS

Annual CMO survey reveals marketing budgets continue to decrease

By our African Marketing Confederation News Team | 2024

In the four years preceding the pandemic, average marketing budgets were 11% of overall revenue. Now they’re an anaemic 8.2%.

The annual ‘CMO Spend Survey’ conducted by research and consulting firm Gartner reveals that average marketing budgets have fallen to 7.7% of overall company revenue, down from 9.1% in 2023.

Gartner’s survey results are based on input from 395 CMOs and marketing leaders in North America and Europe across 10 different industries, company sizes and revenues.

“CMOs are living in an ‘era of less’,” commented Ewan McIntyre, a senior executive with the company, when speaking at a recent marketing symposium in London.

“In the four years preceding the pandemic, average marketing budgets were 11% of overall revenue. In the four years since, they’ve dropped to an anaemic 8.2%.

“Despite financial challenges, the majority of CMOs believe AI may save the day,” said McIntyre. “Sixty-four percent of CMOs say they lack the budget to execute their 2024 strategy, but GenAI offers the opportunity to grow the marketing function’s impact far beyond its budgetary constraints.”

Photo by Mikhail Nilov from Pexels

While paid media investments grew to 27.9% of marketing budgets in 2024, spending fell across marketing technology (martech), staffing, and payments to agencies. Technology investments continued their downward trend, reaching the lowest level for a decade.

Tightened budgets and higher growth aspirations

“We’ve seen a major shift in investment strategies, reflecting tightened budgets and higher growth aspirations,” noted McIntyre.

“The drop in martech investment doesn’t signal a dulled appetite for technology, rather it reflects CMOs’ diminishing influence over martech as other enterprise leaders, such as IT, take more control.

“Meanwhile, CMOs are clearly prioritising media spend as they seek to drive revenue growth.”

Digital dominates a growing share of paid media spend, taking 57.1% of budgets in 2024, up from 54.9% in 2023.

Top channels include search (13.6%), social advertising (12.2%) and digital display advertising (10.7%). Among offline channels, event marketing (17.1%), sponsorship (16.4%) and TV (16%) were the top channels for investment.

“In these tough times, CMOs are prioritising investments that have demonstrable impact,” McIntyre stated.

“However, there’s a mismatch between the channels CMOs are investing in, and their perceived impact. For example, CMOs ranked digital video/streaming as the most impactful digital channel, despite it only coming in fourth when it comes to spend.”

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