Seventy-five percent of CMOs are facing increased pressure to “do more with less” to deliver profitable growth in 2023. Because of this, 86% of marketers said they must make significant changes to how the marketing function works to achieve sustainable results.
“In 2023, CMOs need to become a new type of enterprise leader. This goes beyond serving at the helm of the brand but also assuming a more business-focused role that pivots into a period of investing for profitability versus growth. Those that carry on status-quo will face significant challenges in the near-term,” said McIntyre.
Majority of Marketers Under Pressure to Cut Technology Spend
CMOs have seen technology investments tumble into new lows of unproductivity, with utilization rates falling from 58% in 2020 to 42% in 2022, according to Gartner research. For this reason, 75% of marketers report being under pressure to cut martech spend this year to deliver better ROI. However, the highest reported investment increase across all major marketing resources by CMOs this year goes toward marketing technology, while the largest decrease to labor.
“Like gamblers looking to write-off their losses with the next bet, CMOs are attracted to the allure of newer technologies, no doubt amplified by the chatter around generative AI,” said McIntyre. “They are hungry to see its potential to transform marketing campaigns and content creation. While this hunger to invest is understandable, it illustrates the sunk-cost fallacy that more tech is always better.”
“The willingness to let the majority of their martech stack sit idle signifies a fundamental resource disconnect for CMOs. It’s difficult to imagine them leaving the same millions of dollars on the table for agencies or in-house resources. This trade-off of technology over people will not help marketing leaders accelerate out of the challenges a recession will bring.”
CMOs Expected to Increase Social Advertising Spend and Decrease Search
Paid media leads in budget allocation across major marketing resources (25.6% of overall 2023 budget), followed by marketing technology (25.4%), labor (24.6%) and agencies (23.3%).
Social advertising, which currently takes up the most paid media budget, was identified as the top digital channel to receive increased investment this year, followed by digital video advertising and influencer marketing. Search advertising was identified by the most respondents to receive decreased investment in 2023 (see Figure 2).