Gartner CMO Spend Survey: Martech and agency spending down, in-house resources rise
Survey indicates a reversal in marketing budget growth, but CMOs remain confident on future marketing efforts.
In recent years, marketing technology has increasingly been eating up more of the CMO’s budget. This year, however, Gartner’s annual CMO survey paints a slightly different picture. When it comes to how marketing teams are allocating their budgets, martech spending is down nearly 10 percent. Agency spending is also down for the fourth consecutive year.
Shrinking martech investment may not be so bad. Budget allocations across the four major spending buckets indicate areas of growth — and reduction. The survey looks at how marketing departments are spending their budgets, what their investments are comprised of, and how they will change over the next year.
Martech allocations may be down in 2019, but according to Gartner, marketing leaders continue to see martech as a tool for driving customer engagement and growth. According to last year’s survey, marketers indicated they only use 61% of the functionality available in their martech portfolio. A reported lack of resources was identified as a common organizational challenge.
In-house hiring is gaining steam. This lack of resources could be why this year, agency allocation has continued to decrease — but internal labor spend has grown. While the change is small, it points to marketing teams looking to develop strategic capabilities rather than depending on agencies to manage commoditized activities. Marketing departments that pivot to bring these talents in-house should be looking to further maximize their existing martech investments by developing the skills internally rather than relying on agency partners.
CMOs remain positive despite economic uncertainties. Overall, the marketing decision-makers surveyed have an optimistic outlook for marketing growth despite facing environmental uncertainties in 2020. When asked about the impact of economic and business climates over the next 18-24 months, a surprising 88% of CMOs stated that they believe the future impacts will be positive. Over half (53%) answered that the impacts will be strong.
Why we should care. Last year’s CMO Spend Survey stated that martech investing would continue to rise throughout 2019, but the data from this year and the outlook for 2020 indicate differently. The slow down in investing should create opportunities for those using the martech they already have and further develop their skills and understanding of each technology in order to truly maximize its use. By limiting agency spending and hiring in-house talent, organizations can shift their focus to developing internal marketing operations.
Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.
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