CMO Spend Survey: CMOs at Odds With C-Suite Colleagues Over COVID-19 Recovery

July 9, 2020
Contributor: Kelly Blum

Marketing leaders remain optimistic budgets will bounce back, but should prepare for further cuts as a result of COVID-19.

Marketing budgets looked very different for many CMOs at the beginning of 2020 than they do now. In fact, according to the Gartner CMO Spend Survey 2020, pre-COVID-19 marketing budgets held their ground year over year, making up 11% of overall company revenue. But following the COVID-19 outbreak, everything changed. More than 44% of CMOs reported midyear budget cuts as a result of the pandemic, and nearly 11% of that group expect their budgets to face cuts of more than 15%.

Despite this, an astonishing 73% of CMOs expect the negative impact of COVID-19 to be short-lived, with a positive outlook for business performance in the next 18-24 months. This optimism, however, is not shared by all members of the C-suite.

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A Gartner poll reveals that nearly 60% of CFOs are building scenario plans that include a second wave of the pandemic. In addition, CFOs report a strong connection between COVID-19 and challenges with the macroenvironment, revenue loss and demand.

“Marketers remain stoic in the face of adversity and are significantly out of step with other members of the C-suite,” says Ewan McIntyre, VP Analyst, Gartner. “With many CEOs and CFOs planning for a ‘U-shaped’ or ‘W-shaped’ recovery, CMOs must be more vigilant in their cost optimization.”

“Marketers remain stoic in the face of adversity and are significantly out of step with other members of the C-suite.”

Plan for future disruption

More than half (57%) of CMOs believe that performance will return to near normal in the next 18-24 months — a strong, perhaps overly optimistic, ambition in the face of significant turmoil and uncertainty. 

“As we progress into the ‘recover’ and ‘renew’ phases of this pandemic, CFOs will turn their attention to profitability,” says McIntyre. “Marketing has the dubious honor of topping the list of functions that finance will look to for trimming expenses even further. Instead, CMOs should plan for future budgetary pressures now, rather than gamble on budgets bouncing back.”

To ensure marketing’s expectations don’t fall out of step with business realities, leaders must take a more collaborative and agile approach to budgeting and planning.

Collaborate on scenario plans

CMOs must balance their optimism with pragmatism and collaborate to build cross-functional scenario plans for a collective view on the opportunities and risks in uncertain markets. Leaders must identify the costs to eliminate, essential costs to shield, and costs that deliver greater efficiency and ROI.

Focus on flexibility and adaptability

Volatility and uncertainty will persist in the year ahead as markets shift from the “recovery” to “renewal” phases of the pandemic, so CMOs must focus on flexible and adaptive plans that take into account this instability. Leverage the tenets of agile methodology to develop plans that can respond quickly to market uncertainties.

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