Marketing Spending to Increase 5.2% in 2015, Say CMOs

Budget concept

Laura McLellan and Andrew Frank, both of Gartner, took time on December 10 to share results from their Chief Marketing Officer study, focusing on marketing spending trends for 2014 and 2015. Dare I say that most of us work for a CMO directly (or indirectly through client relationships), so this is relevant for market researchers.

While the study included over 250 CMOs, respondents were primarily from larger B2B and B2C firms, so the results have less relevance for marketers in the SMB space. Overall the average budget amongst these firms was $550 million, with B2C receiving a greater share of revenue than those in B2B marketing. On average this translates to a marketing budget that is 10.2% of company revenue. The range is from 9.3% for retail firms to over 12% for companies in the media space. Respondents are projecting a 5.4% increase in 2015.

Of the budget trends noted, one that stood out was a significant shift toward bringing marketing operations in house. This has definite hiring implications. Another budget item of note was that 80% of the responding firms have their own capital expense (CapEx) budget. The chart below highlights where it is typically spent:

Mareting CapEx

Nearly 50% of the marketing capital expenditure budget is being spent on software and servers, with an additional 36% being dedicated to marketing specific application development.

Companies are now being forced to compete more aggressively on the basis of customer experience. To that point, these large firms are dedicating nearly 9% of their marketing budget, or nearly one percent of overall company revenue, toward marketing innovation. Examples of this innovation include use of digital marketing hubs, real-time social and mobile listening, more sophisticated marketing analytics, virtual assistants, augmented reality, etc.

A final point of interest is that leading firms are outspending their competitors on digital marketing. Savings from digital, relative to traditional marketing methods, are being re-invested in the digital process, owing to digital’s ability to drive increases in marketing efficiency and effectiveness. Another shift is the sign that companies are moving dollars away from sales and toward marketing as buyers change their behavioral patterns toward online purchase.

Greg Timpany directs the research efforts for Global Knowledge in Cary, North Carolina, and runs Anova Market Research. You can follow him on Twitter @DataDudeGreg.


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