Average marketing budgets have fallen to 7.7% of overall company revenue, down from 9.1% in 2023, according to a Gartner survey of 395 CMOs and marketing leaders.
This is according to the annual Gartner 2024 CMO Spend Survey, which was conducted from February to March 2024. Survey respondents were CMOs and marketing leaders in North America and Northern and Western Europe across 10 different industries, company sizes and revenue, with the vast majority of respondents reporting median annual revenue of over $5.3 billion. Gartner experts revealed the findings today during the Gartner Marketing Symposium/Xpo, which is taking place in London.
“CMOs are living in an ‘era of less’,” said Ewan McIntyre, VP analyst and the chief of research for the Gartner Marketing Practice. “In the four years preceding the pandemic, average marketing budgets were 11% of overall revenue. In the four years since, they’ve dropped to an anemic 8.2%.
“Despite financial challenges, the majority of CMOs believe AI may save the day. 64% of CMOs say they lack the budget to execute their 2024 strategy, but GenAI offers the opportunity to grow the marketing function’s impact far beyond its budgetary constraints.”
Figure 1. 2024 Marketing Budget as a Percent of Total Revenue (2019-2024)
Source: Gartner (May 2024)
CMOs Curtail Spending on Tech, Labor and Agencies, but Protect Paid Media Investments
While paid media investments grew to 27.9% of budget in 2024, spending fell across martech, labor and agencies. Technology investments continue their downward trend, reaching the lowest level for a decade (see Figure 2).
Figure 2. Marketing Budget Allocation Across Martech, Labor, Paid Media and Agencies
Source: Gartner (May 2024)
“We’ve seen a major shift in investment strategies, reflecting tightened budgets and higher growth aspirations,” said McIntyre. “The drop in martech investment doesn’t signal a dulled appetite for technology, rather it reflects CMOs’ diminishing influence over martech as other enterprise leaders, such as IT, take more control. Meanwhile, CMOs are clearly prioritizing media spend as they seek to drive revenue growth.”
Digital dominates a growing share of paid media spend, taking 57.1% of budgets in 2024, up from 54.9% in 2023. Top channels include search (13.6%), social advertising (12.2%) and digital display advertising (10.7%). Among offline channels, event marketing (17.1%), sponsorship (16.4%) and TV (16%) were the top channels for investment.
“In these tough times, CMOs are prioritizing investments that have demonstrable impact,” said McIntyre. “However, there’s a mismatch between the channels CMOs are investing in and their perceived impact. For example, CMOs ranked digital video/streaming as the most impactful digital channel, despite it only coming in 4th when it comes to spend.”
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