Chief marketing officers say they need bigger budgets. They aren’t likely to get it—not in this economy.
Marketing budgets as a share of company revenue are expected to remain flat in 2025 at a rate of 7.7%, according to a new study from research firm Gartner. This figure is down from an average of 11.3% during 2015 through 2019.
“While marketing budgets have stabilized, marketing spending has stalled at a level that falls short for many CMOs,” Ewan McIntyre, a vp analyst and chief of research for Gartner’s marketing practice, said in a statement.
McIntyre added that this year top marketers are also confronting possible budget cuts given current economic uncertainties.
Overall, just 30% of top marketers believe they have the funding needed to execute their strategy. Nearly 4 in 5 say marketing departments face pressure to “do more with less.”
To arrive at these findings, Gartner surveyed more than 400 marketing leaders in North America and Europe between January and March. The majority of respondents work at companies that generate $1 billion or more in annual revenue.
In terms of how marketing dollars get spent, 31% now goes toward paid media, up from 23% in 2018.
Due to higher prices to secure ad inventory, however, increases in spend aren’t necessarily resulting in similar boosts for brand awareness or purchase consideration.
“CMOs are getting less for each media dollar they spend as the cost of advertising increases,” McIntyre told ADWEEK. “Meanwhile, return on ad spend and ROI concerns persist, with 55% of marketing leaders frequently reporting that their campaigns failed to drive desired sales to fully justify their investment.”
All other major categories of expenses—labor, agencies, and martech—have seen their share of marketing budgets decline in recent years.
To get more out of their limited budgets, 39% of marketing leaders intend to reduce investments in staff and agencies in 2025. The plan to cut ties with agency partners will only put more downward pressure on employment in an already stagnant U.S. ad industry.
