Marketing Budgets Decline by 15%: Latest Data Insights

Marketing budgets have dropped to 7.7% of overall company revenue in 2024, according to research from Gartner’s Annual CMO spend survey.

The figure shows a decrease of 15% from last year's spending, which was 9.1% of total revenue, and a further decrease from 2022's 9.5%.

However, spending as a percentage of revenue is still higher than in the period immediately after Covid-19, when it was 6.4%. It is significantly lower than the 11% recorded in 2020 and the 10.5% recorded before the pandemic in 2019.

The global survey of 395 CMOs and marketing leaders may raise concerns for marketers who have had to do more with less in recent years.

Despite this, some marketers are choosing to see the silver lining in their tight budgets.

"When you are asked to do more with less, it means you need to change your approach. This can be seen as an opportunity. According to Simon Michaelides, a former UKTV CMO who now works as a consultant, discussing this opportunity with your team can lead to positive outcomes."

CMOs are facing challenges, but many are hopeful about the impact of AI on marketing during these difficult times. A survey found that 64% of CMOs believe that despite limited budgets, generative AI offers a glimmer of hope for achieving their strategies by 2024.

Ewan McIntyre, vice-president analyst and Gartner Marketing Practice’s chief of research, believes that GenAI provides a chance for the marketing function to have a greater impact, surpassing its budget constraints.

In 2024, the investment in paid media has increased to 27.9% of total budgets, while the investment in marketing technology, labor, and agencies has decreased. This shift in investment strategies by brands is a natural progression.

Over half (57.1%) of paid media is now being allocated to digital channels, showing an increase from 54.9% in 2023. Other channels receiving allocation include search (13.6%), social media (12.2%), and digital display (10.7%). Event marketing (17.1%) has seen a higher share of spend in 2024 compared to sponsorship (16.4%) and TV (16%).

McIntyre notes, "In these challenging times, CMOs are focusing on investments that can show measurable impact."

Editor's P/S:

The article highlights the challenges faced by marketers in the current economic climate, with marketing budgets decreasing to 7.7% of overall company revenue. Despite this, some marketers are finding opportunities in these tight budgets, using them to drive innovation and focus on strategies that deliver measurable impact. One glimmer of hope is the potential of generative AI, which 64% of CMOs believe can help them achieve their marketing goals despite limited budgets.

The article also discusses the shift in investment strategies by brands, with a greater focus on digital channels and paid media. This shift is in line with the increasing importance of digital marketing in today's landscape. It is encouraging to see that CMOs are prioritizing investments that can demonstrate a clear return on investment, even in challenging economic times.