Agency spending down, martech spending up: study

According to Gartner, CMOs are spending less of their budget on personnel, agency fees and paid media and more on tech.
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Last year, CMOs reported that 22% of their budget went to martech – less than agencies, paid media and personnel.

Today, it represents 29% of the average budget and is the biggest area of spend. All other areas have gone down; paid media and agencies now take 23% of the budget each (both down from 25%). Labour costs take 24% (down from 27%).

That’s according to annual survey of more than 600 senior marketers across Canada and the U.S. conducted by Gartner earlier this fall.

Despite martech costs going up, budgets all around are going down, according to the study. Marketing expense budgets now represent 11.2% of company revenue, down from 12.1% two years ago.

One-quarter of the average marketing budget is invested in a combination of paid search, organic search, websites and email marketing (what Gartner refers to as “digital workhorses”). Gartner credits the easy sourcing of in-house talent for these matters (another recent study by Ipsos found that Canadian marketers tended to “in-house” activities such as website building and email marketing more than those in other countries), as well as clearer measurement from those activities. On the other hand marketers surveyed reported that they face challenges proving the value of newer marketing techniques, such as influencers. Measurability was cited as the top reason for selection among media.

Out of every $6 spent in marketing, $1 is spent on areas identified by CMOs as “innovation,” and 63% of CMOs expect that budget to increase in 2019. However, most CMOs aren’t confident in their own innovation abilities, and scored themselves an average of 2.2 out of 5 for their innovation maturity. They have a desire to achieve a 4.3 maturity rating, and are thus spending to fill that gap.

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