IT research agency Gartner says marketing budgets have remained steady at 11.2 percent of company revenue in 2018.
The report said 63 percent of chief marketing officers (CMOs) expect their budgets to increase in 2019.
The latest CMO Spend Survey by Gartner reveals CMOs are growing ever more confident in their investments in marketing technology, innovation and personalization.
The report is based on the Gartner’s survey of 621 marketing executives to understand their budget and spending commitments in North America and the U.K.
The 2018 Gartner CEO and Senior Business Executive Survey found that 57 percent of CEOs expect to increase investment in marketing, as more companies look to become customer-centered.
However, this confidence could be misplaced, as pressure to demonstrate business value rises and economic uncertainty mounts. CMOs are on the line to meet expectations for ROI to secure those future budgetary commitments — meaning they must clearly link marketing investments with business return.
“The internal organizational environment is looking very favorable for CMOs right now,” said Ewan McIntyre, senior research director at Gartner.
Marketing technology (martech) investments accounted for 29 percent of the total marketing budget in 2018, up from 22 percent in 2017. This makes martech the single largest area of investment for marketing resources and programs across the board.
Labor budgets took a dip from 28 percent of overall marketing budgets in 2017 to 24 percent in 2018.
Marketing leaders use 61 percent of their martech stack’s capabilities. This emphasizes the need for an adaptable marketing technology roadmap, to clearly define use cases and remain cognizant to the challenges of integrating solutions, people, processes, data and culture in the marketing organization.
One in every six marketing dollars is spent on innovation-related initiatives, and 63 percent of CMOs expect their innovation-related budget to increase in 2019.
Investments in personalization make up more than 14 percent of CMO marketing budgets.
More than half of CMOs have increased their personalization investment since 2017 as they have committed to delivering relevant messages to customers at scale.
While customers have grown cautious of how brands collect, store and use personal data, marketing leaders should proceed with caution when pursuing personalization efforts to help appease both consumers and regulators.
12 percent of CMOs report that brand awareness is the most important metric they measure — compared with 7 percent for ROI and only 1 percent for customer lifetime value. While ROI is still difficult to measure accurately for many, CMOs must not underplay its strategic importance.