Marketing budgets have climbed to 9.5% of total company revenue in 2022, up from 6.4% in 2021, according to a new global survey of Chief Marketing Officers from research firm Gartner. While marketing budgets are increasing this year, they still lag pre-pandemic spending levels.
“In the face of telling macroeconomic considerations, CMOs hold on to a belief that their own economic outlook is strong,” said Ewan McIntyre, Chief of Research and VP Analyst in the Gartner for Marketing Leaders practice. “Despite inflation, the Russian invasion of Ukraine, supply chain issues exacerbated by China’s lockdown measures and unprecedented talent competition, CMOs appear sanguine. For example, the majority of CMOs surveyed thought inflationary pressures hitting their business and their customers will have a positive impact on their strategy and investment in the year ahead.”
Seventy percent of respondents reported their budgets had increased this year. However, with marketing budgets increasing to 9.5% of total company revenue, it is still down from the average budget between 2018 and 2020 of 10.9%.
Digital Gets 56% of Spend, But Offline Channels Rebound
After several years of exponential digital growth, Gartner says CMOs have made the shift from digital-first to hybrid multichannel strategies. When asked to report the proportion of their 2022 budget allocated to online and offline channels, online channels take the largest share (56%). However, offline channels account for almost half the total available budget (44%) for a more equitable split than in recent years. Looking at the average spend across industries, social advertising tops the list, closely followed by paid search and digital display.
“There has been a lot of discussion around COVID-19 shifting consumers to a digital first mindset. However, as Western Europe and North America relax pandemic protocols, customer journeys have recalibrated,” said McIntyre. “Post-lockdown, CMOs need to listen carefully to their customers and pay attention to the channels they are using, as this more closely resembles a hybrid reality.”
Nearly All Industries Up Marketing Spend
Average marketing spending has increased across almost all of the industries surveyed, Gartner says, with some significant variances. Financial services companies recorded the highest budget, at 10.4% of company revenue, up from 7.4% in 2021. While eight out of the nine industries surveyed reported budget increases, spending for CMOs in consumer goods firms has stagnated, moving from 8.3% in 2021 to 8% in 2022.
Brand was one of the lowest ranked capability gaps in the survey, showing that CMOs are confident in their capabilities to manage brands. In fact, when asked to report their budget allocations across marketing's program and operational areas, brand strategy and activation are near the top of the list, accounting for nearly 10% of the budget. However, other strategic capabilities gaps still persist: Marketing data and analytics was identified by 26% of CMOs as a top capability gap, followed by customer understanding and experience management (23%), and marketing technology (22%).
These specific instances illustrate a larger resource challenge for CMOs, Gartner says, with the majority (58%) of CMOs reporting that their teams lack the capabilities required to deliver their strategy.
The annual Gartner 2022 CMO Spend and Strategy Survey was conducted between February through March 2022 among 405 CMOs and other marketing leaders in North America and Northern and Western Europe. The survey reflects different industries, company sizes and revenue, with the majority of respondents reporting annual revenue of more than $1 billion.