Let's talk about the four big trends from our CMO Spend survey this year. The first trend is the decline in Martech spending. Martech spending decreased from 29% last year to 26% this year. Does that mean Martech is less important for marketers? No, definitely not. It just means that this budget is a little bit more prone to yo yo, and we have seen that reflected in client conversations as marketers come to us saying that they've built out really robust Martech stacks, but they're looking for opportunities to rationalize, and opportunities to create some efficiencies as they've been aggressively spending over the last couple of years.
The second trend that we're seeing is in agencies, or rather, a trend that we didn't see was a decline in agency spending. Last year we asked the CMO’s where they expected to be spending on agencies, and they told us that they wanted to insource more and build out the strategic capabilities in-house. Now they've certainly made steps toward doing that. But CMOs are also telling us that they have an appetite for spending on agencies where it makes sense to augment their internal capabilities. Specifically, they're spending about 22% of the budget on agencies.
Now you can't talk about agencies and not talk about paid media, and our third trend is about paid media. Paid media is back, CMOs are spending where they know it works, and in this case, it's digital media over offline.
Finally, the last trend on everyone's mind is how is the overall economic climate impacting marketing budgets? We did see marketers pull back in 2019 and we saw the budget decrease a little bit to a level that we haven't seen since 2014 in fact. But at the same time, CMOs are really optimistic, 61% of CMOs tell us they expect that budget to increase in 2020. Do they know something we don't? Does this represent optimism in the face of adversity, or does it maybe represent a little bit of insularity and hubris? Are they looking at the right indicators? Our research will go into that some more.
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