Gartner Sees Marketing Budgets Slip Back

Marketing budgets in North America have fallen back to 2015 levels in 2017 after three years of growth, according to a survey by Gartner. The proportion of budget spent on marketing technology is also well down on last year.

The tech consultancy's 2017-18 CMO Spend Survey was conducted from June through August and took in responses from 353 marketing executives in North American and UK companies with more than $250 million in annual revenue. Overall, budgets fell from 12.1% of company revenue in 2016 to 11.3% in 2017, said the survey - if this and recent good UK figures from the IPA Bellwether are both correct, it's the US and Canadian budgets that are feeling the pinch.

Gartner says CMOs have 'modest' expectations in 2018, with only 15% predicting a significant increase in budget, 52% a slight increase, and the remaining third expecting budgets to be the same or lower. The company suggests that '2017 has been a year of significant macroenvironmental upheaval, in terms of both global politics and natural disasters - North Korea, Brexit (sic) and hurricanes Harvey, Irma and Maria, for example'. Research Director Ewan McIntyre comments: 'While the descent is not yet steep, it still poses difficult questions for chief marketing officers... The time has come for marketing to show its financial management credentials, proving it can deal with financial constraints, assume accountability for business performance, build budgets based on future returns rather than past assumptions, and grow the business while making hard choices'. McIntyre adds that retail and manufacturing have been hit hardest, and notes: 'Only 14% of respondents surveyed in last year's CMO Spend Survey anticipated cuts in 2017, meaning many CMOs will be ill-prepared for change'.

Interestingly, the company notes that spending on marketing technology has fallen by 15% in 2017, 'as CMOs pull back on previous high spending commitments amid concerns over marketing's capability to acquire and manage technology effectively' - just 22% of total budget was allotted to martech, down from 27% last year.

Gartner is headquartered in Stamford, CT, USA and online at www.gartner.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.