Chief marketing officers plan to increase budgets in 2019, prioritizing innovation over new hires and focusing on the link between technology and ROI. According to Gartner’s latest CMO Spend Survey, marketers are growing more confident in technology investments, but with new ventures comes additional pressure to demonstrate business value.
Gartner surveyed 621 North American and UK marketing executives in July and August of 2018. The analyst firm released its initial findings to members on Thursday and will host a webinar with additional data on November 18.
Marketing budgets remain steady, accounting for 11.2 percent of company revenue, compared to 11.3 percent in 2017. Over a quarter of that budget has been allocated to marketing technology in 2018, Gartner observed, a decline from 2016 but increase from last year.
Ewan McIntire, research director for Gartner, observed that one-in-six dollars will be spent on marketing innovation. In fact, 63 percent of CMOs expect marketing budgets to increase in 2019. Despite a growing confidence in new technology, however, CMOs must make sure those funds are spent in the right places.
“Simply putting one-sixth of your budget toward innovation is not enough, said McIntire. “You need to drive a strategically powered innovation program.”
With new technology comes new challenges, as CMOs will undoubtedly feel pressure to demonstrate a business value for such investments. Gartner found that just seven percent of marketers considered ROI to be the most important metric they measure, compared to 12 who said “brand awareness.”
“While ROI is still difficult to measure accurately for many, CMOs must not underplay its strategic importance,” warned Gartner. “Today, brands must commit to delivering robust customer experiences, as well as growth and value to the business, and therefore must elevate the specific metrics that track these efforts.”
Innovation budgets may be up, but labor budgets took a slight hit in the last year. The CMO Spend Survey found that 24 percent of marketing budgets were allocated to the acquisition of talent in 2018, compared to 28 percent last year.
One’s first thought might be to assume that employees are being made obsolete by automation, but Gartner says this may not be the case. Rather, the analysis suggests this shift in marketing spend is the result of “organizations dealing with capabilities, resources and talent in an increasingly complex way.”