Marketing budgets are on the rise, said a Gartner’s 2022 CMO Spend and Strategy Survey, which found that consumer products is the only category suffering slightly amid inflation, supply chain woes and Russia’s invasion of Ukraine.
The survey’s findings reveal a reasonably positive outlook from chief marketing officers in light of current economic headwinds.
“The majority of CMOs surveyed thought inflationary pressures hitting their business and their customers will have a positive impact on their strategy and investment in the year ahead,” stated Ewan McIntyre, chief of research and vice president analyst in the Gartner for Marketing Leaders practice.
Maintaining investment in marketing during tough times has long been a problem for marketing leaders.
“Cutting marketing budgets has historically been the knee-jerk reaction from companies in times of trouble,” Kirsten Allegri Williams, CMO at Optimizely told SmartBrief in a recent article.
“This is undeniably a mistake, as marketing isn’t a nice-to-have function in today’s digital economy — it’s driving digital experiences consumers want to see and meeting their high expectations,” Allegri Williams added.
It’s a sentiment shared by Al Moffatt, who runs advertising consultancy Moffatt Advisory, and advises companies to invest in marketing during turbulent times to maintain brand positioning. “If you have a strong brand, you’re able to charge more for it, regardless of the sector,” Moffatt told The Wall Street Journal.
It would appear from Gartner’s survey that chief marketing officers aren’t yet facing significant internal budgetary pressures.
Marketing budgets on the up
The average marketing budget has increased to 9.5% of total company revenue this year, up from 6.4% in 2021.
Gartner conducted the annual survey between February and March 2022, polling 405 chief marketing officers and marketing leaders from nine industries across North America and Western and Northern Europe.
Average budgets are still behind pre-pandemic levels, which averaged 10.9% from 2018 to 2020.
Budgets by industry
Some 70% of respondents reported increased budgets in 2022 but some industries are faring better than others.
The highest budgets were reported by marketing leaders of financial service brands at 10.4% of total company revenue. Media and tech brands came second at 10.1%, followed by manufacturing at 9.8% and health care at 9.7%.
The only category to experience a slight fall was consumer products, from 8.3% in 2021 to 8% this year.
Where are marketers spending?
Marketers are investing 56% of their 2022 budgets in digital channels, with the remaining 44% in traditional media. This represents a more even split than in recent years where digital channels have taken a higher proportion of spend.
The recalibration is due to the easing of pandemic restrictions, and Gartner’s McIntyre says, “CMOs need to listen carefully to their customers and pay attention to the channels they are using, as this more closely resembles a hybrid reality.”
The top channel for spend across industries is social media, followed by paid search and online display.
The marketing capability gap
Some 58% of chief marketing officers say their teams don’t have the right capabilities needed to deliver their marketing strategy.
The top capability gap is marketing data and analytics, followed by customer experience management and understanding, and marketing tech.
Respondents had the most confidence in their team’s capabilities to manage the brand.
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