71 percent of CMOs revealed that they lack the necessary budget to implement their strategies in 2023, according to a Gartner report based on a survey of CMOs and marketing leaders.
The survey, which included 410 CMOs and marketing leaders in North America and Northern and Western Europe, covered various industries, company sizes, and revenue brackets. The majority of respondents reported annual revenue of over $1 billion.
The survey findings indicated that marketing budgets in 2023 accounted for 9.1 percent of total company revenue, showing a slight decrease from the 9.5 percent reported in 2022 but remaining relatively stable.
Ewan McIntyre, Chief of Research and VP Analyst in the Gartner Marketing practice, stated that CMOs are experiencing restricted budgets, rising costs, and decreased productivity, leading to a reduction in their spending power. In response, many CMOs are factoring in disruptive changes while planning for 2023, as volatility becomes the norm.
The pressure to achieve profitable growth with limited resources is mounting for 75 percent of CMOs in 2023, prompting 86 percent of marketers to recognize the need for significant changes in their marketing approaches to attain sustainable results.
In the current landscape, CMOs must transform into a new breed of enterprise leaders. Their role extends beyond managing the brand to assuming a business-focused position that prioritizes investing for profitability rather than solely pursuing growth. Those who resist change and stick to the status quo will face significant challenges in the near future.
Gartner research also reveals a decline in the productivity of technology investments among CMOs, with utilization rates dropping from 58 percent in 2020 to 42 percent in 2022. Consequently, 75 percent of marketers are under pressure to reduce spending on marketing technology this year and improve return on investment (ROI). However, despite this pressure, the largest increase in investment reported by CMOs for major marketing resources is in marketing technology, while the biggest decrease is in labor.
Allocation of the overall 2023 budget indicates that paid media receives the largest share (25.6 percent), followed closely by marketing technology (25.4 percent), labor (24.6 percent), and agencies (23.3 percent). Social advertising, currently the leading channel in terms of paid media budget, is expected to receive increased investment this year, along with digital video advertising and influencer marketing. On the other hand, search advertising is anticipated to experience decreased investment in 2023, as indicated by the majority of respondents.