Gartner research shows drop in marketing budgets, martech investment

US and UK research highlights marketing budgets dipping as a percentage of company revenue to 11 per cent for the first time in five years

New UK and US research from Gartner is showing a dip in marketing budgets, the first time numbers have dropped under 11 per cent since 2014.

The analyst firm’s latest Gartner CMO Spend Survey 2019-2020 found marketing budgets to be shifting downwards, reducing from 11.2 per cent of overall company revenue in 2018 to 10.5 per this year. The largest figures were in B2C indirect sales companies (10.9 per cent) and those with an even mix of B2B and B2C (10.9 per cent).

The highest percentage recorded by Gartner over the five years of its research was in 2016, when marketing budgets accounted for 12.1 per cent of company revenue. This year’s report is based on a survey of 340 North American and UK marketing leaders.

Across the survey, Gartner said CMOs remain confident about economic and budget outlooks, with nearly two-thirds (61 per cent) expecting budgets to rebound in 2020. However, Gartner VP, Marketing practice, Ewan McIntyre, noted the same percentage of marketing executives had expected budgets would increase this year, indicating more optimism than reality behind responses.

“While we’re not yet witnessing a precipitous drop in budgets, this year’s downtick presents a counterintuitive scenario,” he commented. “You could call this confidence in the face of adversity. Or you could call it hubris.”

It’s worth noting that across the board, CMOs also believed the global economic outlook will have a positive impact on their businesses in the next 18-24 months.

Gartner’s report also shines a light on several broader marketing trends. For example, two-thirds of marketers said they’ve moved some aspects of delivery from third-party agencies to in-house teams. Despite this, 22 per cent of total marketing budgets are still being spent on marketing agencies.

The research also indicated martech investments dropped 3 percentage points year-on-year, falling to 26 per cent of marketing budgets this year. The analyst firm noted that while martech commands a major slice of the marketing budget, it has proved to be a more volatile investment area.

In CMO’s own 2019 State of the CMO findings across Australian marketing leaders, 30 per cent of the more than 100 respondents expected martech spend to increase in the next year, while 66 per cent predict the level of spend would remain the same. Only 4 per cent predicted a decrease.

Spend on paid media, meanwhile, increased from 23 per cent in 2018 to 26 per cent in 2019, the Gartner report found. Digital channels accounted for 16 per cent of overall marketing budgets, and 78 per cent of respondents expected investments in digital ads to increase in 2020.

Elsewhere, offline advertising and TV spend represented 7 per cent of total marketing budgets each.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Launch marketing council Episode 5: Retailer and supplier

In our fifth and final episode, we delve into the relationship between retailer and supplier and how it drives and influences launch marketing strategies and success. To do that, we’re joined by Campbell Davies, group general manager of Associated Retailers Limited, and Kristin Viccars, marketing director A/NZ, Apex Tool Group. Also featured are Five by Five Global managing director, Matt Lawton, and CMO’s Nadia Cameron.

More Videos

The best part: optimizing your site for SEO enables you to generate high traffic, and hence free B2B lead generation. This is done throug...

Sergiu Alexei

The top 6 content challenges facing B2B firms

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Check out tiny twig for comfy and soft organic baby clothes.

Morgan mendoza

Binge and The Iconic launch Inactivewear clothing line

Read more

NetSuite started out as a cloud-based provider of Enterprise Resource Planning software or as NetSuite solution provider, which companies...

talalyousaf

NetSuite to acquire Bronto's digital marketing platform for US$200m

Read more

Thanks for sharing this post, its really good information I get through this blog.CDPO Online Exam Training

Infosectrain01

3 ways Booking.com is improving its B2B marketing game

Read more

Blog Posts

Getting privacy right in a first-party data world

With continued advances in marketing technology, data privacy continues to play catchup in terms of regulation, safety and use. The laws that do exist are open to interpretation and potential misuse and that has led to consumer mistrust and increasing calls for a stronger regulatory framework to protect personal information.

Furqan Wasif

Head of biddable media, Tug

​Beyond greenwashing: Why brands need to get their house in order first

Environmental, Social and (Corporate) Governance is a hot topic for brands right now. But before you start thinking about doing good, Craig Flanders says you best sort out the basics.

Craig Flanders

CEO, Spinach

​The value of collaboration: how to keep it together

Through the ages, from the fields to the factories to the office towers and now to our kitchen tables, collaboration has played a pivotal role in how we live and work. Together. We find partners, live as families, socialise in groups and work as teams. Ultimately, we rely on these collaborative structures to survive and thrive.

Rich Curtis

CEO, FutureBrand A/NZ

Sign in