Marketers are adopting a ‘stoic’ attitude to their marketing budgets post-Covid-19, but it is an opinion not widely shared by their C-suite colleagues.
That is the top line finding from the latest Gartner CMO Spend Survey, which found almost three quarters (73%) of CMOs expect the pandemic’s negative impact to be ‘short-lived.’ The after-effects, according to heads of marketing, are expected to turn positive within 18-24 months, with CMOs reporting increased investments across major channels in 2021.
The survey polled 432 marketing executives at large organisations in North America, the UK, France, and Germany. Optimism from CMOs is at odds with other executives, with Gartner citing a World Economic Forum survey reporting 60% of CEOs expect a U-shaped recession post-Covid. This outlook ‘should alarm CMOs’, the report notes, and ‘reinforce the need for a collaborative and agile approach to budgeting and planning that ensures marketing’s expectations do not fall out of step with business realities.’
For the here and now, almost half (44%) of CMOs said they were facing mid-year budget cuts of at least 5%. This has in turn forced marketing teams to become more creative with their activity. Overall, Gartner assessed more actions as positive; 61% of companies launched Covid-specific comms to customers, while two in five (40%) took the opportunity to promote eCommerce offerings. Almost half, meanwhile (44%), cancelled or postponed events, while 41% delayed campaigns and 37% reduced headcount.
Marketers are, not surprisingly, sticking rather than twisting when it comes to future budget. Four in five (79%) respondents said they would focus on existing markets for future growth – 45% introducing new products to an existing market, 34% doubling down on existing products – while only 6% are prepared to enter a new market with new products. Only a quarter of those polled said they were prepared to allocate a proportion of budget for new ways of working, being in what Gartner curiously calls a ‘basecamp of certainty.’
While the first part of the report explores the whys and hows of budget, part two digs deeper into the products themselves. Digital channels and martech are where the most confidence can be found; digital accounts for almost 80% of budgets in 2020 with almost two thirds (62%) of CMOs expecting total media spend to bounce back in 2021.
Martech has maintained just over a quarter of marketing spend amid the pandemic; yet there is a caveat. CMOs have grumbled over utilisation, with only 58% of a martech stack’s full capabilities being used. The report warned that a lack of improvement could see martech investments an ‘easy target’ for future cuts.
Looking specifically at B2B marketing budget outlooks by channel for 2021, digital advertising – with 69% of respondents indicating an increase – email marketing (67% increase) and mobile marketing (67%) were the most popular, with paid search, website and SEO (all 66% increase) not far behind. Event marketing (24% decrease) and offline advertising (25%) were naturally the stragglers here.
“CMOs should plan for future budgetary pressures now, rather than gamble on budgets bouncing back,” said Ewan McIntyre, VP analyst for Gartner for Marketers. “The brands that succeed in uncertain times are those that recognise the change around them and adjust to it, rather than wait for things to go back to normal.
“CMOs need to build a plan that sets out the costs that can be eliminated, the essential costs that must be shielded, and the costs where greater efficiency and ROI can be delivered,” added McIntyre.
An idea of what other C-suite members need to do can be evinced through another recent Gartner report which outlines six cost optimisation steps for CIOs to explore. The framework is similar to the CMO report, looking at potential financial benefit, business impact, time requirements, organisational and technical risk, as well as stakeholder investment.
You can access the Gartner report here, in part one and two (client access required).
Read more: Want to become a growth leader? Insist on CX data, says Gartner
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