Gartner recently published The State of Marketing Budgets 2021, which reveals that budgets were almost cut in half, falling from 11 per cent in 2020 to 6.4 per cent in 2021. More predictably, CMOs reported shifting offline spend to digital channels, pure-play digital accounting for over 72 per cent of the total budget. Twenty –nine per cent of work outsourced to agencies has been brought in-house.
While the squeeze was felt across all industries, Gartner notes the possibility that, with the increasing importance of digital engagement, budget might have been moved from the CMO to the Chief Digital Officer, for example, rather than simply cut.
One year ago, based on its “CMO Spend Survey 2020-2021,” Gartner predicted that marketing technology would see increased spend even as other functions were cut back. In fact marketing technology held steady as a percentage of overall budget (an increase of 0.4 per cent hardly indicates strong growth).
Scott Brinker of Chief Martec had a fairly positive take on the news. He said that it showed CMOs voting with their wallets and affirming the importance of marketing technology and operations. “It’s worth noting that as a percentage of that budget, ‘martech’ (in the broadest sense of the word) remains the largest category at 26.6 per cent, followed closely by paid media (25.1 per cent) and labour (25 per cent). Nonetheless, given the amount by which overall marketing budgets shrunk, money for martech was certainly squeezed this year too.”
Surprisingly, analytics found itself in fourth place in budget allocation across marketing programs and operations. With exceptional downward pressure on their overall budget, CMOs still have to spend adequately on the digital channels which have become all-important and the marketing technology that powers them. That has meant the re-allocation of dwindling resources: bad news for external agencies and publishers offering offline ad inventory.