4 Key Findings in the Annual Gartner CMO Spend Survey 2019-2020

The CMO mandate to drive growth shows no sign of letting up, with good reason. No one role has the combination of customer insight, tech savvy and creativity needed to innovate on the customer experience.

This rise in status does not always bring an equal increase in resources, however. The current picture from the annual Gartner CMO Spend Survey 2019-2020, which surveyed more than 340 marketing decision makers from North America and the U.K., shows a slight decline in top-line marketing spend to 10.5% of revenue, a level not seen since 2014.

The writing has been on the wall for some time, says Ewan McIntyre, VP Analyst, Gartner. “Throughout the past two Gartner CMO Spend Surveys, budgets in North America and the U.K. have been hovering at just over 11% of company revenue. In fact, when you look back across the previous five CMO Spend Surveys, the mean average budget is anchored at 11%.”

Paid media is up around 10% from the previous year to 25% of the total marketing budget, with digital media as the clear spending driver. Along with search advertising, digital ad spend comprises around 16% of the total marketing budget.

Social media platforms dominate digital ad spend, followed by display advertising and video. Amazon made a dramatic entrance and rose fast to capture more than 17% of the 2019 digital ad budget.

Marketing leaders show no signs of slowing digital ad spending. Seventy-eight per cent say they are likely to increase digital advertising next year. Should the current swirl of economic uncertainty coalesce into a true downturn, however, only half as many would commit to increase digital ad spend. Digital will fare better than offline ad spending, however. Offline advertising, currently 7% of the budget, is expected to increase for only 16% of marketers in the event of a downturn.

Marketing leaders highlight a number of critical priorities in their budgets. The following capabilities rose to the top: Market research and competitive insights (named as top-three priority by 32% of respondents); marketing analytics (32%); digital commerce (31%); and marketing operations (30%).

Insights and analytics have appeared on the CMO priority list for years, with good reason — 76% of marketing leaders say they use data and analytics to drive key decisions. Yet marketing organisations also struggle to evolve their data capabilities. Continued investment in technology and data talent is not optional for those with ambitions for their data.

One of the data challenges many marketers must overcome is a bias for volume metrics over value metrics. Volume metrics track performance or efficiency. Value metrics, in contrast, assess the quality of an interaction or its impact on the customer relationship and on profitability. Only together do they give marketers necessary insight into customer engagement and loyalty. Analytics investments should take that into account and move toward a more balanced mix of performance data.

The rise of marketing operations in this year’s survey is also noteworthy. A range of strategic capabilities are increasingly collected under the control of a discrete operations function. No longer is ops limited to finance and budgeting. Increasingly, it is overseeing digital project management and talent development. This ascent up the marketer’s priority list signals a strategic focus on improving the business management at marketing’s core.

How CMOs spend their budgets sends a clear signal about where they are placing future bets. Marketing’s continued financial commitment to digital channels and to data and analytics makes clear its intention to maintain its reign at the centre of business transformation toward technology-enabled, digitally capable models. 

Learn more about how and where CMOs are investing in the complimentary Annual CMO Spend Survey 2019-2020 research by Ewan McIntyre and Anna Maria Virzi.