Marketing budgets hitting new low
Marketing budgets have fallen to their lowest recorded level, dropping to 6.4% of company revenue in 2021 from 11% in the pandemic 2020, according to marketing and research firm Gartner that makes an annual survey comprising marketing leaders in North America, the UK, France and Germany from March 2021 through May 2021.
“Despite facing in-year budget cuts in 2020 due to the pandemic, most CMOs expected budgets to bounce back in 2021. This budgetary optimism was misplaced, as marketing budgets have fallen to their lowest level in the history of Gartner’s CMO Spend Survey”. said Ewan McIntyre, vice president at Gartner. “However, these cuts have been a slow burn over the course of the last year, where many marketing budgets have not recovered what was originally lost.”
The survey says no one – regardless of company size or industry – has escaped cuts in marketing budgets. “In fact, no industry achieved a double-digit budget in 2021. Travel & hospitality, manufacturing and tech product companies have experienced the greatest cuts in 2021.”
Consumer products and goods companies reported the strongest 2021 marketing budgets at 8.3% of company revenue.
“Large enterprises got hit the hardest – companies with revenue of more than $2 billion reported the lowest average marketing budget of just 5.7%. On the other hand, companies with revenue of under $500 million reported the highest allocation to marketing with an average budget of 8.6% of revenue.”
Pure-play digital channels are dominating priorities and accounting for 72.2% of the total marketing budget.
“When looking at the largest resource allocation – agencies, media, labor and paid media – agency spend continues to decline. Albeit a small dip from 23.7% in 2020 to 23% in 2021, this continual change indicates significant in-housing activity, as CMOs reimagine the capabilities that can be supported by their internal teams,“ McIntyre said.
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