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How Marketers Spend Their Money

Korcomptenz - Total Transformation Blog - How Marketers Spend Their Money

Posted on March 15, 2019

A new survey from Gartner provides insight into today’s marketing budgets

Technology spending, customer experience, innovation and personalization are key trends when it comes to where marketing leaders are concentrating their attention – and their dollars – according to the Gartner CMO Spend Survey released in November. This survey polled over 600 marketing leaders across industries in North America and the U.K. in an effort to help companies better understand marketing priorities and budget allocations.

“Marketing leaders must demonstrate the business value of their efforts amid uncertain times,” says Ewan McIntyre, senior director, analyst, Gartner for Marketers, and lead author on the CMO Spend Survey, which brought out these eight key findings:

  1. Marketing is a priority investment area, with 57% of CEOs expecting to increase their investment in marketing in the coming year. Though marketing budgets in 2018-19 are 11.2% of company revenue, nearly unchanged from last year, 63% of CMOs expect their budget to increase in 2019.
  2. Nearly one third of CMO budgets are allocated to marketing technology (martech), up from 22% in 2017. This makes martech the largest area of investment when it comes to marketing resources and programs, with email marketing platforms, web content management, and digital marketing analytics platforms topping the CMOs’ priority list.
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  1. Advertising dominates the CMO’s multichannel budget. According to the 2018 survey, CMOs reported they spend over 21% of their marketing budgets on advertising, with more being spent on digital than offline advertising, and two-thirds of their advertising budgets invested in paid digital channels, including search advertising. Despite some reservations about digital advertising, CMOs are generally still willing to invest significant dollars in paid digital media as a means to increase brand awareness and drive new business.
  2. Digital workhorses such as paid search, organic search, websites, and email still account for 25% of marketing investments because – quite frankly – they work. Also, many companies are already set up to source these elements, whereas marketers face challenges proving the value of newer techniques.
  1. CMOs allocate 16% of their budgets to innovation, and though they generally rate themselves low in innovation maturity, nearly two-thirds expect their budgets to grow in 2019. Sixty-three percent of CMOs expect their innovation budgets to increase in 2019, with almost 10% saying marketing innovation will be vital to the delivery of their company’s marketing strategy over the next 18 months. Innovation spending will continue to increase as marketers adapt to changes in consumer behaviors, technologies and environmental conditions, but their innovation capabilities will need to improve to make change a reality.
  2. CMOs continue to focus on customer experience (CX) and customer analytics while overlooking the importance of acquisition and retention, the study found. The long-term output of any CX program is to create business value, which is gained through acquiring, retaining, and growing profitable customers, and according to McIntyre, CX strategies must connect CX investments with customer value to yield positive results.
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  1. CMOs value awareness more than ROI and market share, connecting it to revenue, profitability and market share. Yet the survey indicates many CMOs still gravitate toward metrics that have little meaning outside the marketing organization.
  2. Personalization has emerged as a strategically important marketing capability, given the increased focus on customer experience and the fight for customer attention. Overall, CMOs spend an average of 14.2% of their budget on personalization efforts, but marketers are urged to proceed in this area with caution, as personalization requires a wealth of customer data, which isn’t always easy to come by given the larger cultural conversations and trends around privacy and trust.

Korcomptenz can help you decide where to invest your marketing dollars most effectively, achieving a healthy balance of technology, advertising, and innovation spending. We can help your team understand the complexity of today’s markets and consumers; how to balance the importance of customer experience and customer analytics with that of acquisition and retention; and how to personalize the CX without infringing on their right to privacy and other related issues.

We are leaders and innovators in customer journeys and marketing automation with experience across major customer relationship management and web content management platforms. Our work has been recognized by leading organizations like DigiMarcon, Mautic, and Kentico. Contact us today for a consultation on how we can solve your marketing business challenges and gain competitive advantage for your organization.

Christian Twiste

Chief Operating Officer

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