Marketers across the globe expect to see their budgets for traditional channels such as out-of-home, traditional TV and print either stay the same or decrease in the coming year. And, although these channels still account for a healthy portion of marketing budgets, a report [download page] from Gartner shows that enterprise companies are devoting a larger share to digital channels.
Websites account for the largest portion (11.7% share) of enterprise (at least $500 million in annual revenues) companies’ marketing budgets in North America and the UK, followed by digital commerce (10.9%), mobile marketing (10.2%) and social marketing (10.1%). In the meantime, traditional channels such as offline advertising and TV advertising account for 7.4% and 7.0% share, respectively, of marketing budgets.
Digital advertising currently accounts for 8.9% share of marketing budgets, with nearly 4 in 5 (78%) of the CMOs surveyed saying they are confident that their investment in digital ads will increase in 2020.
The largest slice of digital media spend is allocated to social (23.7%), with display (20.0%) and video (19.6%) close behind. Per data from the IAB and PwC, digital video advertising in the US has increased in the past year and now accounts for more than $9 billion in revenues — the majority of which came from mobile video.
Smaller Share of Resource Budgets Allocated to Martech
CMOs are allocating 26% of their marketing resource budgets in 2019 towards media, up from 23% share in 2018. This puts media on par with the proportion of marketing budgets allocated to martech in 2019.
Martech’s 26% share of marketing spend represents a decrease in resource spend share from 2018, when martech accounted for 29% share of resource budgets. Recent data from WARC and BDO indicates that martech occupies 30% share of budgets in North America and 22% in the UK.
While media and martech account for a good share of resource budgets, the amount of budget allocated to agencies has decreased between 2017 and 2019, from 25% share to 22% share. This is possibly due to the continuing trend of companies bringing agency business in-house, often as a way to save money and cut back on wasteful spending.
Marketing Analytics Is an Investment Priority
In a previous look at this Gartner study, one highlight was that CMOs had identified marketing analytics as one of the top 3 capabilities they consider most vital in supporting the delivery of their marketing strategy in the next 18 months. In response, CMOs have allocated 16% share of marketing expense budgets towards marketing analytics this year, making it the largest area of investment for marketing programs and operational areas.
Businesses are also allocating their marketing expense budgets to content/campaign creation and management (13.4%), marketing research and competitive insights (13.2%), marketing operations (12.6%), user research (12.5%)., brand strategy and building (11.9%), sales enablement (11.6%) and loyalty program management (8.8%).
To read more, the full report can be downloaded here.
About the Data: Findings are based on a survey of 393 marketing decision-makers from the US, Canada and the UK. All respondents were from companies with $500 million or more in annual revenue.