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Gartner: Marketing budgets slashed in 2021
Marketing budgets as a percentage of revenue fell in 20201 to “their lowest level in recent history,” analyst firm Gartner reported in The State of Marketing Budgets 2021. Budgets were almost cut in half, falling from 11% in 2020 to 6.4% in 2021. More predictably, CMOs reported shifting offline spend to digital channels, pure-play digital accounting for over 72% of the total budget. 29% of work outsourced to agencies has been brought in-house. While the squeeze was felt across all industries, Gartner notes the possibility that, with the increasing importance of digital engagement, budget might have been moved from the CMO to the Chief Digital Officer, for example, rather than simply cut. One year ago, based on its “CMO Spend Survey 2020-2021,” Gartner predicted that marketing technology would see increased spend even as other functions were cut back. In fact marketing technology held steady as a percentage of overall budget (an increase of 0.4% hardly indicates strong growth). Scott Brinker of Chief Martec had a fairly positive take on the news. He said that it showed CMOs voting with their wallets and affirming the importance of marketing technology and operations. “It’s worth noting that as a percentage of that budget, ‘martech’ (in the broadest sense of the word) remains the largest category at 26.6%, followed closely by paid media (25.1%) and labor (25%). Nonetheless, given the amount by which overall marketing budgets shrunk, money for martech was certainly squeezed this year too. Probably good to tighten up discipline there.” See Brinker at this fall’s MarTech Conference Surprisingly, analytics found itself in fourth place in budget allocation across marketing programs and operations. 400 respondents in North America and Europe were surveyed. Why we care. CMOs are having to square the circle this year. With exceptional downward pressure on their overall budget, they still have to spend adequately on the digital channels which have become all-important and the marketing technology that powers them. That has meant the re-allocation of dwindling resources: bad news for external agencies and publishers offering offline ad inventory. Of course, CMOs showing they can do more with less are making CFOs happy. They’re prepared to cut marketing as well as travel and real estate. Read next: MarTech Replacement Survey finds marketing transformation is accelerating New on MarTech
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MarTech Replacement Survey finds marketing transformation is accelerating
Ever since we coined the phrase “MarTech is marketing” in 2019, it has only become clearer to us that the art of building brand, prospects and customers today cannot be separated from the tools we use to power those activities. But it’s also clear that the pace of transformation is leading marketers to continually evaluate their tech stacks as platforms add features and new tools emerge that enable marketers to create, integrate and orchestrate better than before. The first MarTech Replacement Survey in 2019 showed just how frequently marketing organizations replaced technology. The survey found homegrown platforms were often displaced by commercial, out-of-the-box applications. This had a direct effect on hiring, as most respondents said they had recruited new teams to run the platforms they were installing. Since then, the COVID-19 pandemic has gripped the world, forcing us more closely to embrace digital operations. We know that many digital-first businesses thrived during the pandemic, but questions remained about how the disruption of the past year-and-a-half affected marketing technology decisions. This year’s report, the result of a survey fielded through April and May of 2021, answers several of those questions. Of the 374 marketers who answered our survey, 252 told us they replaced a marketing technology application in the past year, representing 67% of respondents. For the most part, organizations were upgrading from one commercial solution to another — and the upgraded solutions were exactly the kinds of technologies you’d expect given how digital transformation picked up during the pandemic. This year’s MarTech Replacement Survey found that marketers and their organizations: Replaced a wide range of marketing toolsSought technology with better features and lower costsLooked to improve their data management capabilitiesSaw replacement decisions championed by senior and executive leadershipRetained and retrained talent to manage these new tools In the past 18 months, marketers also invested in exactly those tools which support digital engagement with prospects and customers. And when asked if the replacements were driven by pandemic-related considerations, the response was divided. The data highlighted in this report show that the pace of technology-driven transformation was not slowed by the pandemic. If anything, it picked up speed. New on MarTech
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