Gartner’s CMO Spend Survey Shows Marketing Budgets on the Rise in 2017

Sarah Steimer
Current average rating    
Key Takeaways

What? The 2016 CMO Spend Survey from Gartner shows a third consecutive year of budget increases for marketing.

So what? The top three categories in 2016 spend were web, digital commerce and digital advertising, with most marketing leaders planning to increase digital ad spend.

Now what? Gartner suggests the marketing function should be funded based on benchmarks so as to compete with peers and avoid frivolous waste.

​Dec. 2, 2016

Marketing budgets have risen for the third year in a row, increasing to 12% of company revenue from 11% last year, according to Gartner’s CMO Spend Survey for 2016-2017.


The findings are based on Gartner’s survey of 377 marketers in North America and the U.K. at companies with more than $250 million in annual revenue. Those surveyed at companies with more than $5 billion in annual revenue tend to spend 13% of their revenue on marketing, versus 10% at smaller companies that have $250 million to $500 million in annual revenue.

Budget expectations for the coming year have changed notably, with 14% of marketing leaders saying they anticipate a decrease, the highest percentage reported in the survey’s five-year history. In 2013, only 3% of respondents said they anticipated a budget decrease. The survey also found there’s greater pressure on marketers at smaller companies to decrease spending than larger ones. Despite the uptick in expected budget decreases, 57% of marketing leaders expect their budget will increase in 2017.

Gartner previously predicted that, by 2017, CMOs would spend more on technology than chief information officers. Data from this year show marketing leaders allocated 27% of their expense budget to technology, equating to 3.24% of overall revenue, compared with CIOs’ technology spend at 3.4% of revenue. The finding suggests, according to Gartner, that companies should consider appointing a chief marketing technologist or equivalent role. Gartner says this also means marketing has a responsibility to collaborate with enterprise IT for a more coordinated and efficient technology spend on behalf of the business.

Despite the increase in marketing budgets, the report suggests that marketing leaders are still stretched to do more with their resources. The survey showed the top three categories in 2016 marketing spend were web, digital commerce and digital advertising. Sixty-five percent of marketing leaders said they plan to increase their spending on digital advertising, with 23% expecting a significant increase and 42% anticipating a slight increase.

Gartner found at least some aspects of sales, IT and customer experience report into the CMO in more than 30% of organizations. Sixty-two percent of companies say digital commerce reports into the CMO. More than half of companies with customer experience functions are reporting to the CMO, while 44% of companies cited sales and 31% cited IT as now reporting into the CMO.

Source: Gartner (October 2016)

Gartner included recommendations in its report for marketing leaders. These include:

  • Confirm that the team’s priorities align up the ladder of leadership. Misalignment in the planning hierarchy can cause distributed marketing teams to get out of sync with what matters most for the business.

  • Measure the marketing budget against benchmarks to be sure there is no underfunding or overfunding the marketing operation, relative to competitors or peers.

  • Rebalance the in-house/outsource talent mix. Look for outsourced capabilities that can be brought in-house to reduce costs and increase internal competencies. Determine whether there are any in-house activities that could be delivered more efficiently through outsourcing.


Recommended For You:

CMO Survey Shows Organizational Gap in Digital Marketing Gain a Global Perspective at AMA Events 2016 Marketer's Confidence Index: IoT and Virtual Reality Cited as Growth Markets

CMO Survey Shows Organizational Gap in Digital Marketing

Gain a Global Perspective at AMA Events

2016 Marketer's Confidence Index: IoT and Virtual Reality Cited as Growth Markets


 

 Sign Up for Marketing News Weekly

 
Get the best marketing thought leadership delivered directly to your inbox!



Author Bio:

 
Sarah Steimer
Sarah Steimer is a staff writer for the AMA's magazines and e-newsletters. She may be reached at ssteimer@ama.org or on Twitter at @sarah_steimer.
Add A Comment :
 

Become a Member
Access our innovative members-only resources and tools to further your marketing practice.