Four in ten marketers say they expect to increase their investment in digital audio despite marketing budgets remaining flat. That is according to the annual Gartner 2023 CMO Spend and Strategy Survey. It shows 41% of CMOs at some of the biggest companies in the world think more should be spent on digital audio. That is twice as many as those who want to cut back on audio spending in a tight economy.
The Gartner data also sheds light into where CMOs are putting digital audio relative to other digital media. While the number that plans to spend more on digital audio is ten percent less than those who want to spend more on digital video, more marketers said they plan to increase their audio spending than those who said they plan to upsize their spending on search advertising. In fact search was identified by the most respondents to receive decreased investment in 2023, with a quarter (26%) planning to scale back.
Gartner’s survey offers insights into the thinking of the biggest national brands. It was conducted in March and April among CMOs and marketing leaders in North America and Northern and Western Europe, with the vast majority of respondents reporting annual revenue of over $1 billion. The survey revealed that marketing budgets compose 9.1% of total company revenue in 2023, remaining relatively flat but still dipping slightly from the 9.5% reported in 2022. Because budgets are not growing, three in four CMOs said they are facing increased pressure to “do more with less” to deliver profitable growth this year. Because of this, 86% of marketers said they must make significant changes to how the marketing function works to achieve sustainable results. And 71% said they lack sufficient budget to fully execute their strategy.
“Suppressed budgets, increasing costs and lower productivity are squeezing CMOs’ spending power,” said Ewan McIntyre, Chief of Research and VP Analyst in the Gartner Marketing practice. “As volatility becomes the new normal, many CMOs are pricing disruption into their 2023 plans.”
Even as audio companies focus on ramping up audio tech spending, CMOs say three-quarters of CMOs report being under pressure to cut martech spend this year to deliver better ROI. The biggest decrease in spending will come in labor, however.
“Like gamblers looking to write-off their losses with the next bet, CMOs are attracted to the allure of newer technologies, no doubt amplified by the chatter around generative AI,” McIntyre said. “They are hungry to see its potential to transform marketing campaigns and content creation. While this hunger to invest is understandable, it illustrates the sunk-cost fallacy that more tech is always better.”
The findings were presented at the recent Gartner Marketing Symposium/Xpo in Denver.