The Gartner CMO Spend Survey shows that marketing budgets dropped from 11% of revenue in 2020 to 6.4% in 2021, causing a cascading ripple in how chief marketing officers (CMOs) are prioritizing spend across the organization. Faced with a reduction in resources, CMOs have reprioritized marketing channel spend for 2021. Now, pure-play digital channels dominate, making up 72.2% of the total marketing budget.
The State of Marketing Budgets in 2021: Insights From Gartner’s Annual CMO Spend Survey revealed seven key shifts in marketing channel spend:
- CMOs across industry segments have shifted focus to performance marketing channels, increasing spend on social marketing, digital advertising (such as video and display) and SEO.
- Awareness-based channels such as offline advertising and mobile and event marketing have taken the largest hit when it comes to marketing channel spend.
- B2B marketing leaders have shifted focus to social, mobile and SEO, with 53% increasing investments in social marketing. Meanwhile, 40% have decreased investments in event marketing, and 36% have decreased spend on digital advertising.
- The percentage of B2B marketing budget allocated to digital advertising dropped 2.8 percentage points from 2021, while the portion going to paid search increased 2 percentage points.
- B2C marketing leaders, on the other hand, have increased spend on digital advertising (48%) as well as SEO (47%), but have decreased investments in offline advertising (43%) and mobile (35%).
- B2C CMOs slashed event marketing spend by nearly a full percentage point, reflecting the residual impact of travel limits during the pandemic and a hesitancy to go back to in-person events in 2021. On the other hand, they increased investments in email marketing from 8.8% in 2020 to 10.1% in 2021.
- At B2B/B2C hybrid companies — those with both business and consumer sales — the percentage of marketing budget allocated to digital advertising dropped 4.3 percentage points in 2020 while spend on social rose 2.2 percentage points.