Marketing Budgets Drop to 7.7% of Overall Company Revenue in 2024

In 2024, average marketing budgets have decreased to 7.7% of overall company revenue, down from 9.1% in 2023. This reduction underscores the broader financial challenges faced by companies globally. Leveraging insights from digital marketing agencies like Netpeak US can help businesses optimize their reduced marketing budgets effectively.

Key Findings from Gartner’s 2024 CMO Spend Survey

The data comes from Gartner’s annual 2024 CMO Spend Survey, conducted from February to March 2024. The survey involved 395 CMOs and marketing leaders from North America and Northern and Western Europe across various industries, company sizes, and revenue levels, with most respondents reporting median annual revenues exceeding $5.3 billion. Gartner experts revealed these findings during the Gartner Marketing Symposium/Xpo in London.

Historical Context and Current Challenges:

• Pre-Pandemic Era: In the four years preceding the pandemic, average marketing budgets were 11% of overall revenue.
• Post-Pandemic Shift: In the four years since the pandemic, budgets have dropped to an average of 8.2%, with a significant dip to 7.7% in 2024.

“CMOs are living in an ‘era of less’,” said Ewan McIntyre, VP analyst and chief of research for Gartner Marketing Practice. Despite financial constraints, many CMOs believe AI could be a game-changer. “64% of CMOs say they lack the budget to execute their 2024 strategy, but GenAI offers the opportunity to grow the marketing function’s impact far beyond its budgetary constraints,” McIntyre added.


Changes in Marketing Budget Allocation

Investment Priorities:

• Paid Media Investments: Increased to 27.9% of budgets in 2024.
• Martech, Labor, and Agencies: Spending has fallen, with technology investments hitting their lowest level in a decade.

“We’ve seen a major shift in investment strategies, reflecting tightened budgets and higher growth aspirations,” McIntyre noted. The reduction in martech investment doesn’t indicate a reduced appetite for technology but rather reflects CMOs’ diminishing control over martech as IT departments take more responsibility. CMOs are clearly prioritizing media spend to drive revenue growth.

Digital and Offline Media Spend

Digital Media:

• Share of Budget: Digital media now commands 57.1% of paid media budgets in 2024, up from 54.9% in 2023.
• Top Digital Channels: Search (13.6%), social advertising (12.2%), and digital display advertising (10.7%).

Offline Media:

• Top Channels: Event marketing (17.1%), sponsorship (16.4%), and TV (16%).

“In these tough times, CMOs are prioritizing investments that have demonstrable impact,” McIntyre explained. “However, there’s a mismatch between the channels CMOs are investing in and their perceived impact. For example, CMOs ranked digital video/streaming as the most impactful digital channel, despite it only coming in fourth in terms of spend.”


Strategic Insights and Recommendations

These insights highlight the evolving landscape of marketing budgets and strategies as companies navigate economic pressures. To optimize marketing effectiveness through selective investment and innovative technologies like AI, CMOs can benefit from partnering with experienced digital marketing agencies.