Marketing budgets are climbing back.
Survey results show that budgets have recovered somewhat, with the average marketing spend increasing from 6.4% to 9.5% of company revenue across almost all industries. While this is a significant uptick, budgets still lag behind prepandemic levels — between 2018 and 2020, they averaged 10.9% of company revenue.
Financial services, travel and hospitality, and tech product companies stand out, recording budget increases at 10.4%, 8.4% and 10.1% of company revenue, respectively. In contrast, spending for consumer goods CMOs decreased slightly from 8.3% in 2021 to 8.0% in 2022. Inflationary pressures, cost-of-living increases and lower consumer confidence are hitting consumer goods brands hard.
CMOs are optimistic despite signs of future disruptions
“In the face of telling macroeconomic considerations, CMOs hold on to a belief that their own economic outlook is strong,” says Ewan McIntyre, VP Analyst and Chief of Research at Gartner. “Despite inflation, the Russian invasion of Ukraine, supply chain issues exacerbated by China’s lockdown measures and unprecedented talent competition, CMOs appear sanguine.”
The majority of CMOs surveyed think inflationary pressures will have a positive impact on strategy and investment in the year ahead. However, in the past, marketing has been caught off guard by budgetary shocks. It’s imperative that 2022’s optimism turns into optimization. You must take time to plan for uncertainty by building scenario plans and looking at the potential downstream implications of upheaval.
Customer journeys are changing (again)
CMOs are shifting from digital-first to hybrid multichannel strategies. Although online channels take the largest share of 2022 marketing budgets — 56% to be exact — offline channels account for almost half of total available budgets (44%). This is a more equitable split than in recent years. In terms of digital spend, social advertising tops the list, closely followed by paid search and digital display. Social advertising is a logical choice for marketers in 2022, as it continues to offer highly targeted messages at scale.
“There has been a lot of discussion around COVID-19 shifting consumers to a digital-first mindset,” says McIntyre. “However, as Western Europe and North America relax pandemic protocols, customer journeys have recalibrated. CMOs need to listen carefully to their customers and pay attention to the channels they are using, as the current environment more closely resembles a hybrid reality than a state of digital channel domination.”