Average marketing budgets have fallen by 15%, data suggests
As CMOs come under pressure to do more with less, marketing budgets as a percent of company revenue have dropped to 7.7%.
By Molly Innes
Marketing budgets have dropped to 7.7% of overall company revenue in 2024, according to research from Gartner’s Annual CMO spend survey.
This figure represents a 15% drop from last year’s figures when spend was 9.1% of total revenue, and a further drop on 2022’s 9.5%.
Spend as a percentage of revenue is still higher than in the immediate period post-Covid-19, when it was 6.4%. But it is well below the 11% recorded in 2020 and 10.5% recorded before the pandemic in 2019.
The global survey of 395 CMOs and marketing leaders may signify cause for concern among marketers who have struggled with having to do more with less in recent years.
However, some marketers are trying to put a positive spin on their stretched budgets.
“When you get asked to do the same or more with less that means you cannot operate the way you operated before. By definition, that is an opportunity. And if you’ve got people who are receptive to discussing that opportunity, it can turn into something positive,” Simon Michaelides, former UKTV CMO-turned-consultant told Marketing Week last month.
‘Change the narrative’: How to deliver the most when you’re asked to do more with less
Despite challenges, it seems CMOs are optimistic about AI’s impact on the marketing function in these stretched times. Almost two-thirds (64%) of CMOs say that while they lack the adequate budgets to execute their 2024 strategies, generative AI represents a silver lining.
“GenAI offers the opportunity to grow the marketing function’s impact far beyond its budgetary constraints,” says Ewan McIntyre, vice-president analyst and Gartner Marketing Practice’s chief of research.
Elsewhere, investment in paid media has grown to 27.9% of overall budgets in 2024, while investment in marketing tech, labour and agencies declined. Again, this is to be expected as brands shift their investment strategies.
In terms of where paid media is being allocated, more than half (57.1%) is going to digital channels, up from 54.9% in 2023. Other channels include search (13.6%), social media (12.2%) and digital display (10.7%). Event marketing (17.1%) has a higher share of spend in 2024 than sponsorship (16.4%) and TV (16%).
“In these tough times, CMOs are prioritising investments that have demonstrable impact,” says McIntyre.
