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Gartner has released its latest annual CMO Spend Survey, based on a survey of 353 marketing executives in North America and the UK working at companies with more than $250 million in annual revenues. Here are 5 key takeaways from the report, along with supporting data from other research.

1. Marketing Budgets Dip to 11.3% of Company Revenue

Marketing budgets last year reached a peak of 12.1% of company revenues, per Gartner. This year, though, budgets have taken a small hit, declining to 11.3% of company revenues.

For context, the latest installment of The CMO Survey [pdf] finds that in the US, CMOs across company sizes estimate allocating 11.4% of their firm budgets and just 6.9% of their company revenues on marketing. B2C product companies tend to dedicate the largest share of their firm budgets and revenues to marketing, with B2B product companies on the lower end.

The majority (53%) of respondents to Gartner’s report are using more mature budgeting methods, with activity-based budgeting (37%) the single-most popular method.

2. CMOs Spend 37% of Their Budgets on Customer Acquisition

While some pieces of research in the past have suggested that marketers are concentrating on acquisition at the expense of retention, that doesn’t seem to be the case for the CMOs surveyed by Gartner.

In fact, these marketers’ spending on customer growth and retention outpaces budgets for customer acquisition by an almost 2:1 ratio (63% and 37% share of budgets, respectively). Still, much of that is spent on “customer growth”, with acquisition getting a larger piece of the pie than retention.

The CMO Survey has in the past shown that US CMOs have been finding more success with customer acquisition than retention. That remains the case in the latest installment, where CMOs reported a 3.1% year-over-year increase in customer acquisition performance versus a 1.9% increase in customer retention performance.

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3. Analytics Grows to 9.2% of Marketing Budgets

Gartner’s survey asked CMOs to estimate how their fiscal 2017 marketing budgets were being spread across 13 marketing areas (see the chart above).

Interestingly, respondents estimated allocating the single largest share of their budgets to marketing analytics (9.2%). Last year, analytics was the fourth-largest expense out of 14 measured.

The CMO Survey, for its part, finds that in the US CMOs estimate spending 5.5% of their marketing budget on analytics, with that figure expected to rise to 18.1% over the next 3 years.

Beyond analytics, CMOs responding to Gartner’s study estimate allocating the next-largest proportions of their budgets to:

  • Web (8.8%);
  • Digital Ads (8.6%);
  • Offline Ads (8.4%);
  • Social (8.3%); and
  • Digital Commerce (8.1%).

Content isn’t far behind, occupying 7.4% of budgets on average, on par with the amount spent on events.

Mobile, meanwhile, gets 6.3% of company budgets, which this time is on par with the CMO Survey estimates (6%).

4. Two-Thirds of CMOs Will Increase Digital Ad Spending in 2018

Looking ahead to 2018 and two-thirds of CMOs expect to increase their spending on digital advertising over 2017 levels, per the report.

In fact, spending increases are forecast for several digital channels. Some 64% expect to increase their spending on social media marketing, with a majority also forecasting increased investments in websites (61%) and mobile (59%).

Meanwhile, the same can’t be said about offline advertising and marketing channels. A majority of CMOs expect their budgets for event marketing and partner/channel marketing to either remain the same or decline.

Overall, close to two-thirds (63%) predict that their investments in offline advertising will either remain flat or decrease.

Digital marketing spending increases have long outpaced traditional advertising spending growth in The CMO Survey, too. In the latest edition, CMOs expected to increase their digital marketing spend by 13% on average in the coming year, while cutting their spending on offline advertising by 2%.

Meanwhile, in a new report [download page] from the Sagefrog Marketing Group, B2B marketers are most likely to say that website development, along with tradeshows and events, are top areas of marketing spend, with fewer saying the same about direct marketing and print advertising.

5. Martech Share of Budgets Dips to 22%, Below Paid Media

Gartner’s survey reveals some interesting shifts when comparing the share of budgets allocated to labor, paid media, services and marketing technology.

Of those 4, marketing technology occupies the smallest share of budgets this year, at 22%. That’s down from 27% last year, when it was one of the larger areas of expense.

While labor (27% share) gets the largest proportion of budgets of these 4 areas again this year, it’s paid media (25%, up from 22%) and services (25%, up from 22%) that are seeing the biggest upward shifts.

Recent survey data from Warc [pdf] found that brands in the UK and US are spending an estimated 16% of their budgets on marketing technology this year. Some 38% of US businesses expect to increase their spending on marketing technology in the coming year, against just 7% planning a decrease.

The overall size of the marketing technology industry in the US and UK was estimated to be $34.3 billion.

About the Data: The Gartner data is based on a research conducted using a mixed methodology (online/CATI) from June through August 2017 among 353 respondents in the United States (61%), Canada (12%) and the United Kingdom (27%). Respondents were required to have involvement in decisions pertaining to their company’s strategy, activities and/or spending on marketing and/or digital marketing. Some 73% of the respondents came from organizations with $1 billion or more in annual revenue. Respondents hailed from a variety of industries, with financial services, high tech, manufacturing, consumer products, media, retail and healthcare providers among the most highly represented.

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