Is marketing climate change a thing? New results from Gartner’s 2023 CMO Spend and Strategy Survey hint at the evolution.
CMI’s chief strategy advisor Robert Rose shares his thoughts in this week’s CMI News video. Watch it below, or keep reading for the highlights:
Marketers reduce reliance on search advertising
Gartner’s survey announcement reveals some intriguing data on advertising priorities and budget expectations. (The full report is only available to Gartner clients.)
Chief marketing officers increased their investment in social advertising, digital video advertising, and influencers. Most survey respondents also decreased their investment in search-based advertising.
Those investment choices mirror what’s happening in the consumer world. Internet searches have become less and less useful with the growth of vertical search and generative AI.More CMOs dropped their search ad budgets and increased their investment in social ads, digital video ads, and influencers via @Gartner_inc #research via @Robert_Rose @CMIContent. Click To Tweet
The rise of push content (a la TikTok) also means relevant, targeted, and personalized content now finds the user rather than the user finding the content (a la search). Robert wonders if those results hint at marketing climate change, where marketers find more success reaching audiences through influencers and social content than through search.
CMOs lament budgets don’t allow strategy success
But that shift in consumer behavior wasn’t the headline of the Gartner CMO survey results. Instead, it focused on the 71% of CMOs who believe they lack sufficient budget to fully execute their 2023 strategy even though marketing budgets are in line with last year – experiencing a slight drop to just over 9% of revenue.71% of CMOs say they lack sufficient budget to execute their 2023 strategy fully, according to @Gartner_inc #research via @Robert_Rose @CMIContent. Click To Tweet
“Budgets do not seem to be returning to pre-pandemic levels,” Robert says. So he created a chart using Gartner’s annual survey budget numbers. It reveals the trend line for CMO budgets steadily dropping since 2016, aside from the pandemic course correction in 2022.
Do seven years make a genuine trend in marketing budgets? Could budgets as a percentage of revenue decline even more? Does that even matter?
Instead, Robert says, marketers should ask if measuring marketing’s impact as a percentage of the company’s total revenue really assesses its effectiveness.Does measuring #marketing’s impact as a percentage of total revenue really assess its effectiveness, asks @Robert_Rose via @CMIContent. Click To Tweet
Does a reduction in the marketing budget lead to a drop in its revenue share? Or is marketing more efficient and driving more revenue per dollar spent? Or has the democratization of media driven down costs, so the same amount of marketing is less expensive today? Or is it something else?
Gartner seems to believe marketing costs are increasing while productivity is decreasing – that those two things are “squeezing CMOs’ spending power.” The research notes 75% of CMOs said they face increased pressure to do more with less to deliver profitable growth in 2023. Eighty-six percent of marketers said they must change how marketing functions to achieve sustainable results.
Of course, no marketer has ever said, “My marketing team has too much time and money.” So those Gartner results don’t surprise us.
Ironically, marketers also spend more time acquiring and implementing new tech to boost productivity and reduce costs than creating things of value. (Not surprisingly, tech received the biggest budget line item increase this year.) These attempts often slow the process.
All that budget data led Robert to rethink his five Cs of strategic marketing – coordination, collaboration, content before containers, and channels. “Make sure your siloed teams coordinate with one source of the truth when it comes to content and how it’s managed,” he says. “Ensure they collaborate, plan consistent ideas, and develop content that can be reused across multiple containers. Use only the channels where you can demonstrate value.”
Even Gartner agrees. It recommends CMOs should double down on scenario planning and balance near-term execution with the investments that enable them to build future capabilities.
What do you think? How are your marketing teams balancing the need for more technology and increased productivity with the challenge of marketing budgets? Let us know in the comments.
HANDPICKED RELATED CONTENT:
Cover image by Joseph Kalinowski/Content Marketing Institute