Gartner’s 2024 CMO Spend Survey reveals a challenging landscape for marketers, with budgets dropping to 7.7% of company revenue, down from 9.1% in 2023. This “era of less” is prompting CMOs to reassess their strategies, prioritizing media investments and digital channels while grappling with reduced technology budgets. Despite constraints, marketers are turning to AI for efficiency gains and exploring high-impact, low-spend channels like email and retail media networks to maximize their limited resources.

Decline in Marketing Budgets 

Marketing Average Budgets Fall to Post-Pandemic according to Gartner

The marketing landscape in 2024 is characterized by tightening budgets and increased pressure to deliver results. Gartner’s annual CMO Spend Survey reveals a significant drop in marketing budgets from 9.1% of company revenue in 2023 to 7.7% in 2024, marking a post-pandemic low. This “era of less” is particularly pronounced in B2C sectors, with consumer products marketers facing the toughest challenges, operating with only 6.7% of company revenue allocated to marketing. Key hurdles impacting marketing budgets include:

  • Inflation and interest rates
  • Challenges in demonstrating ROI from digital investments
  • Internal perceptions of marketing as a cost center rather than a profit driver

Despite these constraints, CEOs are hungrier for growth than ever before, with 62% placing growth as their top business priority. This paradoxical situation is forcing CMOs to rethink their strategies and find innovative ways to deliver more with less.

Top Budget Trends for CMOs – Ewan McIntyre, VP Analyst and Chief of Research for the Gartner Marketing Practice

Shifts in Resource Allocation

Reprioritization of the marketing resource mix according to 2024 Gartner Research

The 2024 Gartner CMO Spend Survey reveals significant shifts in how marketers are allocating their resources in response to budget constraints. Key findings include:

  • Media investment has increased to 27.9% of marketing budgets in 2024, up from 25.6% in 2023. This reflects a strategic focus on channels perceived to drive growth most directly.
  • Digital channels now account for 57.1% of media spend, compared to 42.9% for offline channels. This continues the trend of digital dominance in marketing strategies.
  • Search advertising has emerged as the top digital channel, displacing social advertising. This shift likely reflects a focus on conversion-oriented tactics in a budget-constrained environment.
  • Despite increased overall media investment, real-term spending on media has actually declined when measured against enterprise revenue. This highlights the challenge of maintaining a share of voice with reduced budgets.
  • Marketing technology (martech) budgets have declined from 25.4% to 23.8% of total marketing spend. This doesn’t necessarily indicate a reduced appetite for technology but rather reflects CMOs’ diminishing influence over martech decisions as IT departments take more control.
  • Investments in agencies and labor have also seen reductions as part of this “radical reprioritization of the resource mix”.

The survey also revealed interesting disparities between channel investment and perceived value:

  • Video and streaming are perceived as highly impactful, despite receiving only 10% of the total media budget.
  • Linear TV, while receiving significant investment, is perceived as less impactful than digital video alternatives.
  • Email and retail media networks are seen as high-value, low-spend channels, suggesting potential areas for increased investment.

These shifts reflect CMOs’ attempts to maximize impact with limited resources. The focus on media, particularly digital and search, suggests a prioritization of measurable, performance-driven marketing activities. However, the discrepancies between spend and perceived value in some channels indicate potential opportunities for optimization.CMOs are advised to:

  1. Critically evaluate channel performance against investment levels.
  2. Explore opportunities to increase investment in high-impact, low-spend channels.
  3. Reassess the balance between digital and traditional media based on target audience behaviors and campaign objectives.
  4. Collaborate closely with IT on martech decisions to ensure marketing needs are met despite reduced direct control over technology budgets.

As marketers navigate this “era of less,” strategic resource allocation becomes increasingly critical. The ability to identify and capitalize on high-value opportunities while optimizing existing investments will be key to driving growth and demonstrating marketing’s value to the organization.

The Role of AI in Marketing

AI in marketing use cases courtesy of pireplex

Artificial Intelligence (AI) is emerging as a critical tool for marketers in 2024, offering potential solutions to budget constraints and efficiency challenges. According to Gartner’s 2024 CMO Spend Survey, AI is playing an increasingly significant role in marketing strategies and operations:

Productivity Enhancement
Despite reduced budgets, 73% of marketers are currently piloting or using generative AI. This widespread adoption reflects the technology’s potential to boost productivity and efficiency. AI is enabling marketing teams to do more with less, a crucial capability in what Gartner terms the “era of less”.

Cost and Time Efficiencies
33% of CMOs identified time and cost efficiencies as one of the top three benefits when considering the ROI of AI investments. This indicates that AI is not just a theoretical solution but is already delivering tangible benefits to marketing operations.

Offsetting Budget Constraints
With 64% of CMOs reporting that they lack the budget to execute their 2024 strategy, many are turning to AI as a potential solution. Ewan McIntyre, VP Analyst and Chief of Research for the Gartner Marketing Practice, suggests that “gen AI offers the opportunity to grow the marketing function’s impact far beyond its budgetary constraints”.

Positive Outlook
Despite budget cuts, CMOs remain optimistic about AI’s potential. More than three-quarters of CMOs responded positively about the impact of AI (both generative and other types) on marketing’s budget and strategy in 2024.

Transforming Marketing Technology
While overall marketing technology budgets are declining, AI is reshaping the martech landscape. The survey indicates that AI is empowering IT functions to take a more central role in developing enterprise-wide AI strategies, potentially eroding marketing-owned technology budgets.

Impact Across Marketing Functions
AI is not limited to a single area of marketing. Its applications span across various functions, from content creation and personalization to data analysis and customer insights. This broad applicability makes AI a versatile tool for addressing multiple marketing challenges simultaneously.

Future Cost Reduction Potential
While the immediate impact of AI is more evident in efficiency gains, there’s an expectation that it will lead to cost reductions in the future. As AI technologies mature and become more integrated into marketing processes, they may help offset some of the budget pressures currently faced by CMOs.

However, it’s important to note that AI is not a panacea for all marketing challenges. Its effective implementation requires strategic planning, appropriate infrastructure, and skilled personnel. Moreover, as AI becomes more prevalent, it may shift from being a competitive advantage to a necessary component of marketing operations.

In conclusion, AI is playing a crucial role in helping marketers navigate budget constraints and efficiency demands in 2024. Its ability to enhance productivity, drive efficiencies, and potentially reduce costs in the future makes it a key focus area for CMOs looking to maximize their impact in an era of reduced resources.

Strategic Recommendations for CMOs 

Based on the insights from Gartner’s 2024 CMO Spend Survey, here are key strategic recommendations for CMOs navigating the “era of less”:

Prioritize Growth-Centric Value Stories
With CEOs placing growth as their top business priority, CMOs must align their budget requests with this objective. Marketing initiatives should be framed in terms of their potential to drive revenue growth and profitability. This approach can help counter the perception of marketing as a cost center, which nearly 50% of respondents reported as a barrier to securing larger budgets.

Optimize Resource Allocation
CMOs should critically evaluate their resource mix across agencies, people, technology, and media. The survey shows a significant shift towards media investments, with 27.9% of marketing budgets now allocated to this area. However, this reallocation should be strategic, focusing on channels that deliver the highest perceived value relative to investment.

Focus on High-Impact, Low-Spend Channels
The survey revealed that certain channels, such as email and retail media networks, deliver high perceived value despite relatively low investment. CMOs should identify and prioritize these efficient channels within their marketing mix to maximize impact with limited resources.

Reevaluate Digital Channel Strategy
With 57.1% of media budgets now allocated to digital channels, CMOs need to ensure they’re investing in the most effective digital platforms. The survey highlighted search advertising as the dominant digital channel in 2024, surpassing social advertising. This shift suggests a need to reassess digital channel priorities based on their ability to drive conversions and demonstrate clear ROI.

Leverage AI for Efficiency and Innovation
Despite budget constraints, 73% of marketers are piloting or using generative AI. CMOs should explore AI applications that can enhance productivity, drive efficiencies, and potentially reduce costs in the long term. However, it’s crucial to approach AI implementation strategically, ensuring it aligns with overall marketing objectives and delivers measurable benefits.

Enhance Measurement and Analytics Capabilities
With 64% of CMOs reporting insufficient budgets to execute their 2024 strategies, demonstrating marketing’s impact is critical. Invest in robust measurement tools and analytics capabilities to accurately track and report on marketing’s contribution to business growth and profitability.

Collaborate Across the Enterprise
As control over marketing technology shifts towards IT and other enterprise leaders, CMOs should foster strong cross-functional collaborations. This is particularly important for AI initiatives, where enterprise-wide strategies are becoming more common. By aligning with other departments, CMOs can ensure marketing’s needs are represented in broader technological investments.

Reacquaint with Target Audiences
The survey revealed significant changes in channel effectiveness and audience behavior. CMOs should prioritize refreshing their understanding of target audiences, their journeys, and the channels that most effectively reach and engage them.

Focus on Productivity and Efficiency
With 73% of CMOs being asked to do more with less, productivity should be a key focus. This involves not only leveraging technology but also optimizing processes, upskilling teams, and potentially restructuring marketing operations to be more agile and efficient.

By implementing these strategies, CMOs can navigate the challenges of reduced budgets while still driving growth and demonstrating marketing’s value to the organization. The focus should be on maximizing efficiency, leveraging high-impact channels and technologies, and aligning closely with overall business growth objectives.

Seize the Opportunities

As marketers navigate the challenges of reduced budgets in 2024, it’s crucial to adapt strategies and leverage new technologies to maximize impact. The shift towards digital channels, particularly search advertising, reflects a focus on measurable outcomes and direct revenue impact. To thrive in this “era of less,” CMOs should prioritize high-efficiency investments and explore AI applications to enhance productivity and drive efficiencies.

Looking ahead to September 2024, marketers should take decisive action to optimize their strategies:

  • Reevaluate your digital channel mix, focusing on those that deliver the highest ROI.
  • Invest in AI technologies to streamline operations and boost productivity.
  • Most importantly, align your marketing initiatives closely with overall business growth objectives to demonstrate value and secure future budget allocations. 

Don’t let budget constraints hold you back – act now to transform challenges into opportunities for innovation and growth.

Additional Resources

Ready to transform your marketing strategy? Contact us for expert guidance on navigating budget constraints and leveraging emerging technologies to drive growth. Let’s work together to turn challenges into opportunities and ensure your marketing efforts deliver maximum impact.

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Published by Emmanuel Obadia

With over 30 years of experience in software, I’ve had the opportunity to work as an entrepreneur and international executive for some of the biggest names in tech, including Lotus, IBM, Peoplesoft, Sun Microsystems, Sage, Salesforce, and Oracle. As a former EMEA Vice President of Marketing and Global Chief Product Officer, I gained invaluable insights into the rapidly changing tech industry. Today, I’m an Optimist Sr. Advisor, Executive Coach & Mentor, and public speaker. I’m thrilled to help teams of any size thrive in complexity, speed, and change, and to inspire transformation and innovation for impact. I’m passionate about empowering individuals and organizations to make a lasting mark on the world. If you want to learn more about my journey, please check out my bio and About for additional details My motto: “Authentic leadership: unlocking the potential to achieve the impossible.”

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