Gartner: Marketing Budgets Plummet to 6.4% of Overall Company Revenue in 2021

Published On: July 26, 2021Categories: Buzz, Uncategorized

Marketing budgets have fallen to their lowest recorded level, dropping to 6.4% of company revenue in 2021 from 11% in 2020, according to Gartner’s CMO Spend Survey, which surveyed 400 CMO and marketing leaders in North America, the UK, France and Germany from March 2021 through May 2021. The survey tracks the critical areas marketers are investing in and where cuts are being made from people, programs and technologies.

“Despite facing in-year budget cuts in 2020 due to the pandemic, most CMOs expected budgets to bounce back in 2021,” said Ewan McIntyre, co-chief of research and vice president analyst in the Gartner for Marketers practice. “This budgetary optimism was misplaced, as marketing budgets have fallen to their lowest level in the history of Gartner’s CMO Spend Survey. 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.”

Consumer products and goods (CPG) 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.

The research shows CMOs have shifted spending commitments across their channels and programs, with pure-play digital channels – owned, paid and earned – dominating those 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.

CMOs report that 29% of work previously carried out by agencies has moved in-house in just the last 12-months alone. The focus of in-housing is changing as well – with brand strategy, innovation and technology, and marketing strategy development making up the top three capabilities areas CMOs are moving to internal teams. Meanwhile, marketing technology (martech) continues to dominate, taking up 26.6% of the total budget.

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