Gartner: Marketing budgets slashed in 2021

In 2021, marketing budget were dramatically cut, but spend on marketing tech held steady.

Chat with MarTechBot

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.

Dig deeper: MarTech Replacement Survey finds marketing transformation is accelerating


About the author

Kim Davis
Staff
Kim Davis is currently editor at large at MarTech. Born in London, but a New Yorker for almost three decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Shortly thereafter he joined Third Door Media as Editorial Director at MarTech.

Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.

Get the must-read newsletter for marketers.