Marketers tasked to do more with less as budgets dip

By April Berthene

June 17, 2024
Marketing budget

Marketers across industries have less budget to work with in 2024 compared with 2023, according to a newly released survey of 395 global chief marketing officers by research firm Gartner.

Marketers report their 2024 budgets dropped to 7.7% of the company’s revenue, compared with 9.1% in 2023, and 9.5% in 2022. Gartner surveyed marketing decision makers across industries, including retail, in March 2024. Over half of respondents were from North America, and 74% of them were from organizations with annual revenue over $1 billion.

The COVID-19 pandemic may be the culprit of the decreasing budgets, according to the report. Marketing budgets were 8.2% of a company’s revenue on average in the four years after pandemic, compared with 11.0% of a company’s revenue on average for the four years before the pandemic. For a company with annual revenue of $500 million, this equates to a marketing budget decrease of about $14 million, according to the report.

Only a quarter (24%) of chief marketing officers say they have sufficient budget to execute their strategy, and they say they’ve been tasked to “do more with less,” according to the report.

The impact of artificial intelligence on marketers

The vast majority of chief marketing officers are investing in artificial intelligence, with only 5% indicating it’s not an investment priority in 2024. Improved time efficiency (at 35%) and improved cost efficiency (34%) were the top responses for how generative artificial intelligence is delivering the most return on investment.

While many marketers are using artificial intelligence, it is not yet saving marketers money, according to the survey. Only 14% of marketers ranked “reduced media spend” in the top three of their return on investment in generative artificial intelligence and only 11% said headcount reductions.

Where marketers are spending their budgets

By channel, chief marketers allocated 57.1% of their budgets to digital channels and 42.9% to offline marketing channels in 2024.

Digital increased its share of investment, up from 54.9% in 2023. Within digital, here is the investment breakdown by channel:

  • Search advertising – 13.6%
  • Social advertising – 12.2%
  • Digital display advertising – 10.7%
  • SEO – 10.4%
  • Video streaming- 10.4%
  • Audio/podcast – 7.8%
  • Email marketing – 7.1%
  • Sponsored content – 6.1%
  • Influencer marketing -6.0%
  • Retail media networks – 5.7%
  • Digital out of home – 5.3%
  • SMS/push notifications – 4.6%

“Search is still regarded as a trusted channel that delivers results CMOs’ peers can easily comprehend,” said Ewan McIntyre, vice president, analyst and chief of research for Gartner for marketers.

Of offline channel investments for marketers, the mean percentage of budget allocation is:

  • Event marketing – 17.1%
  • Sponsorship – 16.4%
  • Linear TV – 16.0%
  • Partner/co-op – 14.0%
  • Direct mail – 13.5%
  • Out of home – 12.3%
  • Radio – 10.0%
  • Other 0.6%

“CMOs across all industries and business models regard events as an impactful channel, especially effective in supporting conversion and customer loyalty,” McIntyre said. “Events attract the largest proportion of offline channel spend and is second only to search advertising in multichannel spending commitments.”

Marketers also named personalization, multichannel marketing and customer journey orchestration as the top three areas where they have a capability gap to meet their existing marketing goals.

“More with less is about leaning in to your investments, ensuring they deliver the highest possible yield,” McIntyre said.