- Nearly two-thirds (61%) of surveyed CMOs believe their budgets will increase in 2020, according to new Gartner research shared with Marketing Dive. The firm surveyed more than 340 marketers across North America and the U.K.
- Positive projections for marketing budgets arrive despite "perplexing external and internal environmental signals," according to Ewan McIntyre, VP analyst of Gartner's marketing practice. Those include political uncertainties like Brexit, the impact of trade disputes and tariffs and low consumer confidence in the economy.
- Marketers surveyed by Gartner in 2018 also said that they believed they would score more investments, but have not. Budgets for the department declined to 10.5% of overall company revenue this year from 11.5% in 2018, marking the first time that the figure has dropped below 11% since 2014, according to Gartner.
Often among the first hit during corporate purse tightening, marketers remain optimistic even as the economy faces gloomy prospects, including the looming threat of a recession, and amid highly contentious political times. Ad spending tends to tick up for major election cycles, and with the 2020 U.S. presidential race fast approaching, it's possible that positive momentum will spread across the sector.
Still, marketers appearing so sure of their financial prospects during a period of great uncertainty is curious. Gartner's report nodded to the potential impact of "groupthink" among executives. The firm found many CEOs are also not preparing for a recession, for example. McIntyre noted that the same number of CMOs last year thought their situation would improve in 2019, suggesting a misplaced optimism lingers among the department leaders.
"While we're not yet witnessing a precipitous drop in budgets, this year's downtick presents a counterintuitive scenario," McIntyre said in a statement. "You could call this confidence in the face of adversity. Or you could call it hubris."
Skepticism toward the high expectations marketers have placed on their budgetary outlook for 2020 is supported by other recent research. Chief marketers are increasingly grappling with "short-termism," where they need to provide results on a shorter timeline than in the past, Dentsu Aegis Network found in its most recent global CMO survey. Monetary issues were cited as a significant factor contributing to those pressures.
Half of Dentsu's respondents ranked the inability to secure long-term investments as one of the top three barriers affecting their performance. Forty-one percent of the 1,000 chief and senior-level marketers surveyed also said they foresee their budgets remaining flat or shrinking over the next 12 months, in some cases despite overall revenue growth for their business.
The need to master emerging marketing technology is one of the ways marketers are pitching leadership on scoring more investment. However, investments in marketing technology have slipped 3 percentage points year-over-year, per Gartner, comprising only a little over a quarter (26%) of marketers' total budgets in 2019.
Data and analytics similarly continue to command high interest as the need for better marketing personalization grows. Major agency deals of late, like Publicis buying the data marketing firm Epsilon for a whopping $4 billion this summer, demonstrate the high premium put on this area.
But CMOs are projected to make major cuts in the space moving forward. Earlier this year, Gartner forecast that 60% of CMOs will slash their marketing analytics divisions in half by 2023 due to a "failure to realize promised improvements." Changing customer habits, proliferating regulatory considerations and disruption brought on by automation will also contribute to the trend.
"Failure to deliver against inflated expectations in data and analytics may come at the expense of future funding commitments," McIntyre said around Gartner's more recent batch of findings.