Gartner report: Martech tops CMO expenditure
- 06 November, 2018 14:48
Marketing technology accounts for 30 per cent of the average modern marketing function’s budget, the largest single area of investment for CMOs, with a third going to services and support, according to fresh research from Gartner.
The analyst firm’s latest CMO Spend Survey 2018-2019 found martech spend was up 9 per cent year-on-year, making it the single biggest area of investment for marketers across resources and programs. It’s also coming at the expense of in-house labour, which fell 3 per cent year-on-year to 24 per cent in comparison. Agencies and paid media tied at 23 per cent each, also both down 2 per cent on 2017 figures.
In a complementary study, Gartner found email marketing, Web content management and digital marketing analytics are top of the tech purchase list. Nearly three in 10 marketers are also investing in social analytics or lead management platforms, and 28 per cent are deploying advanced analytics and data science tools.
What the report also revealed was more than one-third of this investment is going towards external services or IT cross charges.
“Though marketers are focusing investments on martech, the use of in-house labour and services provided by agencies and other marketing service providers accounts for almost half [47 per cent] of marketing budgets,” the report stated.
“The blurring of services and capabilities offered by different service providers results in resources being split across traditional agencies, consultants, in-house experts and a plethora of other players. This creates an organisational design headache and makes it difficult to determine how much is actually being invested in human capital, both within and outside the organisation.”
Not surprisingly, personalisation was a strategically important imperative for most of those surveyed, and CMOs are spending 14.2 per cent on average on their personalisation efforts today. Marketers are also spending 21 per cent of their marketing budgets on average on advertising, with two-thirds going to digital channels.
Another significant finding from the report was that 16 per cent of the marketing budget is being spent on innovation. Across respondents, 9 per cent of CMOs felt marketing innovation was going to be vital to delivering their company’s marketing strategy over the coming 12 months, and 63 per cent believe their innovation budgets will increase next 18 months.
This is despite doubts in the skills and capabilities available to support such programs, Gartner reported. For example, on a scale of 1 to 5 for marketing maturity, respondents came in at 2.2 for innovation maturity.
When it comes to skills, customer experience was nominated the top capability required in marketing teams this year, and marketers estimated 18 per cent of their overall marketing budgets are allocated to CX initiatives.
Another area still requiring improvement if marketing is to become more holistic is measurement. The 2018-2019 Spend Survey found ‘awareness’ was still the most important metric for respondents, beating ROI and measures of customer value and satisfaction.
Gartner’s report was based on a survey of 621 marketing executives at US and UK companies with at between US$500 million and $10 billion in annual revenue. Overall, marketing budgets came in at 11. 2 per cent of company revenue, on par with last year’s results.