By Adam Fraser
The “Gartner CMO Spend Survey 2016-2017” surveyed 387 organisations about their actual marketing spend in 2016 and planned spend for 2017. The companies surveyed were at the enterprise level (>US$250m rev per year) across USA and UK.
The key findings were:
- Marketing budgets continued their steady increase in 2016, representing an average of 12% of company revenue from 11% in the prior period; note this is the third year in a row this ratio has increased
- CMO martech spending is on track to exceed the CIO technology spend in 2017 as marketing looks after a growing number of customer touch points.
- Twenty-four percent of marketing leaders expect their 2017 digital advertising budget to increase significantly
- Marketing leaders who own or share P&L responsibility get budgets that are 20% higher, on average, than those without plans for a P&L
The survey showed larger companies (those with revenue of $5bn or more) spend a higher proportion on marketing (13% of revenue) than their smaller contemporaries (10% of revenue for companies with revenue of $250-500m).
The prediction that CMOs would spend more on IT than CIOs by 2017 was originally made by Gartner a number of years ago. This incredible metric does seem on track to occur based on this survey, emphasising again how important technology and data analytics have become to the marketing profession. On average companies will spend 27% of their marketing budget on technology; aligning the objectives of the CMO and CIO has never been more important.
As with last year, Digital Commerce investments are a high priority with CMOs as a means to achieve growth objectives, particularly in FMCG sectors, with at least 8% of the marketing budget allocated to this area. The top three categories for share of budget were website, digital commerce and digital advertising.
The increase in spend on digital advertising is being driven by
- A continuing and consistent shift of offline media spending to digital channels.
- Decline of organic social in favor of paid social.
- The rising importance of video, which is more expensive than other digital techniques for both media and production
The changing nature of org structures is reflected in the survey, with Sales, IT and Customer Experience Functions now reporting into Marketing in 30% or more companies.
This is a worthwhile report to review, reflecting some important industry trends.
Leave a Reply