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Marketing budgets aren’t what they used to be.
As a percentage of company revenue, they’re down 15% from 2023 to 2024 on average, according to Gartner’s CMO Survey, which was conducted from February through March among 395 marketing decision-makers in Europe and the US.
Though marketing budgets have yet to return to pre-pandemic levels, CMOs are feeling optimistic on at least one front: everyone’s favorite two-letter initialism: AI.
Tightening purse strings? Marketing budgets represent an average of 7.7% of total company revenue this year, down from an average of 9.1% last year, according to the survey. In 2023, that number fell just slightly from 9.5% in 2022, when it rebounded from 6.4% in 2021, a pandemic-era low. The decline represents a new “era of less” for marketing, per Gartner:
- In the four years before the pandemic, average marketing budgets sat at 11% of total revenue.
- In the four years following Covid’s peak, though, the average is down to about 8%.
And just a quarter of CMOs said they have sufficient funds to execute their strategies for 2024, Gartner found.
However, Deloitte, Duke University’s Fuqua School of Business, and the American Marketing Association’s most recent CMO Survey found something different, reporting that marketing budgets as a percentage of company revenues increased slightly from fall 2023 to spring 2024, from 9% to 10%.
AI heart eyes: If marketing budgets are shrinking, most CEOs see growth as a top strategic priority for 2024 and 2025, according to Gartner’s 2024 CEO and Senior Business Executive Survey, and CMOs are often tasked with helping to achieve it.
“Typically, technology is the go-to solution for productivity challenges—eliminating costly drudge work, augmenting capabilities, and tapping new opportunities,” the report’s authors wrote. “In 2024, no technology holds more promise than GenAI.”
Only 5% of CMOs said that AI isn’t an investment priority this year, and more than three-quarters expect it will have a positive impact on marketing, per the report.
Re-prioritize: Overall, investment in marketing technology as a mean percentage of marketing budgets has been on the decline, down from about 29% in 2018 to about 24% in 2024. Paid media spend moved in the opposite direction, up from about 23% of marketing budgets in 2018 to about 28% this year.
Paid media accounted for the largest mean percentage of marketing budget based on allocations across major resources, followed by martech, labor, and agencies—the same order as in last year’s report.
Change the channel: Search advertising represented the largest mean percentage of digital channel budgets, followed by social, digital display, SEO, and email marketing. In terms of offline channel budgets, event marketing had the highest mean percentage, followed by sponsorships and linear TV.