Here’s the Latest on How Marketing Budgets Are Being Divvied Up

August 18, 2021

Gartner Enterprise CMO Budget Allocation Major Resources Aug2021Amid a historic decrease in the proportion of company revenue being allocated to marketing budgets this year, the portion of marketing budgets being allocated to various resources is remaining relatively steady this year. Gartner’s annual CMO Spend Survey [download page] shows that the share of budget going towards agencies is the only resource that will see a decrease in 2021, making way for small increases in share for paid media, labor, and martech.

The survey of more than 350 global marketing leaders reveals that martech will once again benefit from the largest share of marketing budgets allocated to resources, at 26.6%. This share is about on par with the 26.2% allocated to martech in 2020, but significantly higher than the 22% it was allocated back in 2017.

Similarly, paid media and labor will also see only slight bumps in the share of marketing budgets, to 25.1% and 25%, respectively.

Moving In-House

While other resources are seeing tiny lifts in budget allocation, the share of resource budget going to agencies has dipped slightly this year — down to 23% from 23.7% in 2020.

It appears as though marketing leaders are continuing the trend that started several years ago of bringing more marketing in-house. And, although a recent survey of agency executives found that marketing strategy was one of the top marketing areas clients were asking about, Gartner’s survey reveals that brand strategy and marketing strategy development were two of the top 3 external agency capabilities CMOs were moving in-house this year.

Digital Commerce a Budget Priority

The explosion in online buying during the pandemic has put digital commerce at the forefront of marketing investment this year. Some 12.3% of marketing expense budgets allocated to marketing programs and operational areas will go towards digital commerce.

After digital commerce, marketing operations is being allocated 11.9% of marketing budgets, while an 11.3% share will go towards brand strategy.

Marketing analytics has noticeably slipped down the list of marketing priorities this year. After being the top area of investment for program and operation areas in 2019, as well as being named one of the top 3 most vital marketing capabilities in last year’s survey, marketing analytics has fallen out of the top 3 for marketing budget investment — with 11% share being allocated towards this area in 2021.

On the other end of the spectrum, marketing areas such as promotions (8.7%), loyalty programs (8.3%) and demand generation (8%) are being allocated a smaller portion of marketing budgets this year.

The full report can be found here.

About the Data: Findings are based on a survey of 380 marketing leaders across the US, Canada, France, Germany and the UK, 81% of whom work at organizations with at least $1 billion in revenue.


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