Gartner for Marketers

CMO Spend
Survey
2018–2019
Marketers Proceed Into
Uncharted Waters With
Confidence

Ewan McIntyre
Sr Director Analyst, Gartner Research & Advisory
Anna Maria Virzi
Principal Analyst, Gartner Research & Advisory

Published 30 October 2018 - ID G00361758

© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. GML_533739
 CMO Spend Survey 2018–2019

With marketing expense budgets stabilizing,

CMOs exhibit confident investments in
marketing technology, innovation and
personalization. But, is this confidence
misplaced? Marketing leaders must
demonstrate the business value of their
efforts amid uncertain times.
Ewan McIntyre
Sr Director Analyst, Gartner Research & Advisory

Anna Maria Virzi

Principal Analyst, Gartner Research & Advisory

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 2

 CMO Spend Survey 2018–2019

Key Findings Recommendations

• Marketing expense budgets leveled off in 2018, remaining To better lead and manage marketing within your organization:
steady at an average of 11.2% of company revenue.
• Conduct a thorough environmental analysis, focusing
• Marketing technology (martech) now accounts for almost on the potential impact of changing macro- and micro-
one-third of marketing’s budget (29%), while in-house labor environmental challenges on marketing’s strategic priorities
investments lose share. and budget allocations.

• One in every $6 spent by CMOs is invested in innovation, • Audit your marketing technology spend, assessing not
despite doubts in the skills and capabilities available to only the martech tools your organization currently has in
support these programs. place (and which tools can be cut), but their utilization,
and internal and external resources, processes and talent
• CMOs struggle to align marketing metrics with business needed to support them.
priorities, favoring awareness as their No. 1 strategic
measure instead of customer value and return on • Appoint a leader accountable for your marketing innovation
investment (ROI). program. Define the scope, mandate and success measures
for your innovation investments in order to foster the right
skills and capabilities required to drive business results, and
to set and manage expectations.

• Elevate financial measures on your strategic dashboard.

Build a clear connection between the leading indicators
of marketing success, such as awareness, and the lagging
indicators, such as revenue and ROI.

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 CMO Spend Survey 2018–2019

Survey Objective Marketing Budgets Remain Steady Despite Uncertain

Times Ahead
This research is based on Gartner’s 2018-2019 CMO Spend
Survey of 621 marketing executives in North America and the Last year’s CMO Spend Survey (see “CMO Spend Survey
U.K. at companies with $500 million to $10 billion or more 2017-2018: Budgets Recede Amid Demand for Results”) saw
annual revenue. It details: marketing expense budgets level off from their climb to 12.1%
of company revenue in 2016 to 11.3% in 2017 (see Figure 1).
• How much companies spend on marketing, how those Rather than flag this as the harbinger of future budgetary
budgets will change in 2019 — and why. decline, Gartner saw this dip as an opportunity for CMOs to
take stock and create a clearer link between investments and
• What budgets reveal about marketing’s continued
the value marketing delivers to the enterprise.
commitment to digital techniques at the expense of
traditional techniques, such as offline advertising and Fast-forward to 2018, and the decline in budget has leveled
event marketing. off to 11.2% of company revenue. Furthermore, CMOs remain
optimistic regarding future budgets: 63% of CMOs expect
• The most important metrics tracked in the CMO’s
their budgets will increase in 2019.
dashboard to inform marketing strategy.
This budgetary optimism is backed by the findings of the 2018
Data Insights Gartner CEO and Senior Business Executive Survey (see “2018
Despite a mix of macro- and micro-environmental challenges CEO Survey: CIOs Should Guide Business Leaders Toward
and uncertainties brewing in 2018, marketers remain Deep-Discipline Digital Business”). A majority of surveyed
undeterred. With fears over emerging markets, trade disputes CEOs (57%) expect to increase investment in marketing in
and tariffs, the U.K.’s exit from the European Union (Brexit), 2018. Marketing is high on the CEO’s investment priority
and even talks of an impending U.S. downturn,1 the future list as digital business at scale evolves to become a full
is far from certain. However, a mood of optimism prevails, team endeavor. This finding reflects the increasingly close
and CMOs face the future with confidence as they plan their relationship between CEOs and CMOs, as CEOs become more
marketing budgets today and into the future. customer-centered and CMOs demonstrate the financial value
and growth marketing delivers to the enterprise (see “CMO
The following key findings in this year’s CMO Spend Survey Perspective: Six Habits of the Modern CMO”). Though with
detail where marketing leaders are aligning their marketing great power, comes great responsibility. CMOs must appease
dollars in 2018 and beyond. the often-skeptical CFO’s expectations for ROI to justify future

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 CMO Spend Survey 2018–2019

Figure 1. Marketing Budgets Level Off in 2018

budgetary commitments, which means being able to clearly
link marketing’s investments with business return. (This is
CMO Budget Allocation further discussed in the finding “CMOs Prioritize Customer
Experience and Customer Analytics, but Risk Overlooking
Mean Percentage of Budget Shown Acquisition and Retention.”)

12.1% While the internal environment may be more favorable for

11.4%
11.3% 11.2% CMOs — as illustrated by the 2019 budget outlook — macro-
10.2% environmental challenges called out in last year’s survey still
persist as we head into 2019. In some instances, these issues
have become even more pronounced:

• New trade policies and tariffs are having a ripple effect

throughout the world.2

• The U.K.’s exit from the EU fast approaches (29 March

2019), with no clear plan regarding the shape of post-Brexit
trading relations at this time of writing.3
2014 2015 2016 2017 2018
• Emerging markets are hammered by stock and currency
Base: All respondents, excludes don't know, 2018: n = 618; 2017: n = 350; 2016: n = 375; 2015:
n = 424; 2014: n = 363
challenges.4
Q. What percentage of your company's total revenue is allocated to its total marketing
expense budget? • Financial pundits are discussing a potential U.S. downturn
Source: Gartner (October 2018)
in 2019.5

Therefore, CMOs should proceed with caution. With these

brewing environmental uncertainties afoot, CMOs should
expect the best — but plan for the worst — as they prepare
budgets and programs for 2019.

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 5

 CMO Spend Survey 2018–2019

Recommendations: Twenty-Nine Percent of the Marketing Budget Is Allocated

to Technology, Diverting Budget From All Areas of Marketing
• Conduct a thorough environmental analysis.
Operations
Environmental analysis — the practice of assessing and
monitoring changing internal and external factors that Marketing technology has accounted for an increasingly
may affect marketing — is an often-neglected aspect of significant share of marketing expense budgets in recent
strategic planning. At best, it’s done once, and not revisited years. In 2018, this march of martech shows no signs of
until the next round of strategic planning is due. But slowing down. Up from 22% in 2017, martech now accounts
things change fast, and your strategy, budget and spend for a whopping 29% of the total marketing expense budget,
priorities must be informed by both planned and emergent making martech the single largest area of investment when it
challenges and opportunities. Schedule a regular cadence comes to marketing resources and programs.
of environmental analysis, using a range of resources (such
According to Gartner’s 2018 Marketing Technology Survey,
as Gartner Iconoculture Consumer Insights research) that
email marketing platforms, web content management and
explore critical segments and consumer behavior shifts. Be
digital marketing analytics platforms top the CMO’s shopping
sure to feed this analysis into your emerging strategies and
list, as indicated by a majority of marketing leaders surveyed
budgets (see “Use Gartner’s Marketing Strategy Framework
in the study. Furthermore, 29% of marketing leaders surveyed
to Build Accountable, Actionable Strategic Plans”).
in this study said they’re currently deploying either a social
• Build a proactive cost optimization plan. Too often, analytics platform or a lead management platform, with
cost optimization — the practice of driving spending 28% deploying advanced analytics and data science tools
and cost efficiency while maximizing business value — is (see “Marketing Technology Survey 2018: Martech Adoption
only considered when times are tough. But the best cost Surges as Brands Pursue Personalization, Measurement and
optimization strategies are proactive, allowing marketers Advertising Accountability”).
time to make investment decisions based on the value
However, in a year where marketing budgets are flat, when
marketing delivers to the enterprise — in both the near term
one area goes up, something else must go down. Sure
and longer term. Don’t procrastinate. Start planning cost
enough, labor budgets have taken a slide in 2018, falling from
optimization initiatives today to ensure the fiscal health of
27% to 24% of marketing expense budgets (see Figure 2).
marketing tomorrow (see “Driving Cost Optimization Across
the Enterprise: A Marketing Perspective”).

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 CMO Spend Survey 2018–2019

Figure 2. Investments in Martech Grow as Investments in Labor Pull Back

The interplay between increasing
technology investments and decreasing
CMO Budget Allocation by People and Programs labor costs seems like a natural
Mean Percentage of Budget Shown Budget Allocation — Martech Areas progression — but could this be the
turning point where automation starts
Labor Martech to reduce human capital requirements?
For example, artificial intelligence
24% 21% 20% (AI) techniques and technologies in
use today include “conversational
29% experiences.” In the future, multichannel
17% 20% marketing campaigns could be
designed by an unsupervised, AI-
21% enabled orchestration based on a
customer’s self-directed journey rather
than manually defined campaign flows
Budget Allocation Percentage — People Marketing and/or analytics software as a
directed by marketing managers (see
service
and Programs “Innovation Insight: Artificial Intelligence
On-premise marketing and/or analytics
29 software applications
Will Transform Marketing”).
27 24 25 23 25
23 22
Infrastructure for marketing technology
While this makes for attention-grabbing
(verging on clickbait) copy, the
chances are that AI and technology
Cross-charges from internal IT
are not putting your job at risk just yet.
External services to develop, implement and Rather, this shift in marketing spend
Labor Paid Media Agencies Martech integrate marketing applications
indicates that organizations are dealing
2017 2018
with capabilities, resources and talent
Base: All respondents, excludes DK, 2018: n=618; 2017: n=350; 2016: n=375; 2015: n=424; 2014: n=363 in increasingly complex ways.
Q. Please tell us how your company's fiscal year 2018 total marketing expense budget is being allocated to or spent on
people and programs? For example, a significant share of the
Source: Gartner (October 2018)
martech budget is currently allocated

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 CMO Spend Survey 2018–2019

to supporting services, with more than one-third of this Though marketers are focusing investments on martech, the
investment going toward external services or IT cross charges. use of in-house labor and services provided by agencies and
other marketing service providers accounts for almost half
Often, these investments in services are required to test, (47%) of marketing budgets. The blurring of services and
embed and scale technology in the enterprise, and may likely capabilities offered by different service providers results in
bounce back once a mature martech stack is up and running. resources being split across traditional agencies, consultants,
As an example, consider the process Clorox adopted when in-house experts and a plethora of other players. This creates
implementing a data management platform (DMP). Clorox an organizational design headache and makes it difficult to
invested in several small-scale projects to learn about technical determine how much is actually being invested in human
realities and value potential before implementing a DMP, which capital (both within and outside the organization).
delivered the large-scale capability (see “Clorox’s Agile Martech
Development”). Your investment in technology requires Recommendations:
significant upfront time and investment to build and test the
• Audit your marketing technology spend and stack.
use case, and get the necessary talent and processes in place.
Determine which marketing tools your organization currently
Nonetheless, the elevation in marketing technology spend is has in place, and assess to what extent those tools are being
especially noteworthy after spending priorities shifted in 2017 used effectively. Go beyond the tools, digging into the
relative to the budgets for labor, agencies and paid media. services and charges that accompany your martech spend.
Pay careful attention to areas of underutilization, overlap and
At their 2015 through 2016 peak, martech accounted for redundancy, in terms of both tools and services (see “Toolkit:
33% of marketing budgets. Yet, 29% represents a significant How to Audit Your Marketing Technology Ecosystem”).
proportion of marketing’s total budget, and CMOs risk
making costly mistakes if they don’t invest wisely (and • Revisit your organizational design. Take stock of the
strategically). According to the 2018 Marketing Technology resources used to fuel marketing’s operations, including
Survey, marketing leaders said their organizations use, on those powered by your in-house team, your agencies and
average, 61% of their martech stack’s capabilities. A marketing your technology vendors. Ensure there’s sufficient labor
technology roadmap is essential to clearly define use cases on staff or from your agency to support your objectives in
and remain cognizant of the challenges of integrating with the near term, and build a talent roadmap that balances
incumbent solutions, people, processes, data and culture the capabilities you need given the right scale, cost and
in the marketing organization (see “Build an Adaptable flexibility (see “Marketing Organizational Structure: What
Marketing Technology Roadmap”). Should Marketing Leaders Centralize or Decentralize?”).

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 CMO Spend Survey 2018–2019

Advertising Dominates the CMO’s Figure 3. More Than 14% of the CMO’s Advertising Budget Goes to Paid Digital Media
Multichannel Marketing Budget, With
Digital Surpassing Offline
CMO Budget For Advertising
Every year, we ask CMOs how they
spend their budgets across core Mean Percentage of Budget Shown
marketing channels and capabilities.
This year, respondents said they spend
an average of just over 21% of their Your brand
Search advertising…
Sponsored
marketing budget on advertising. Of
this advertising spend, 8.9% goes to All Maps Videos Images News Shopping

digital advertising (which includes Digital Digital

social, mobile and display advertising); advertising advertising Ad

5.3% goes to paid search; and 7.0%

goes to offline advertising (which 5.3% allocated to search advertising
includes TV and out-of-home media).

This means that two-thirds of CMOs’ Shop Now

advertising budget are invested in

digital channels, including paid search
(see Figure 3). As CMOs feel pressured
14.2% of marketing
to show results during such uncertain
times, advertising drives reliable,
budget in total
8.9% allocated to digital
quantifiable growth. CMOs are turning advertising allocated to paid
digital media
to digital advertising as a means to
increase brand awareness and drive
new business. However, increased
Base: All respondents, excludes DK, n=618
spending on advertising could result Q Please tell us how your company's fiscal year 2018 total marketing expense budget is being allocated to orspent on each of the
in diminishing returns as more brands following marketing channel and marketing enablers?
Source: Gartner (October 2018)
compete for ad space.

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 CMO Spend Survey 2018–2019

In the 2017 Multichannel Marketing Survey, respondents (GDPR),6 Brexit and consumer concerns regarding the
cited digital advertising as the third-most-effective marketing misuse of personal data in ad targeting.
channel during the awareness, interest and conversion
phases of the customer’s buying journey (see “Multichannel • Marketers in the U.S. spent the lowest proportion of their
Marketing Effectiveness Survey 2017: Marketers Are on a marketing budget on digital advertising, allocating 7.3% to
Mission to Advance Multichannel Marketing Results”). This paid digital media. While this investment lags behind their
shows that CMOs are still willing to invest a significant portion British counterparts, it still represents a sizable investment.
of their budget on paid digital media to boost revenue The Interactive Advertising Bureau estimates that social
and prove marketing’s worth within the enterprise. This is advertising represented 25% of the $88 billion spent on
despite ongoing concerns over trust, transparency and the digital advertising and paid search in the U.S. during 2017.7
effectiveness of digital advertising (see “Consumer Insight: • Consumer product brands spent the most on digital
Untruth and Consequences — Earning and Keeping Consumer advertising — an average of 10.5% of their total revenue. Retail
Trust in the Post-Trust Era”). brands were close behind at 10.3%. However, both retail and
However, CMOs from different company sizes and consumer product brands spent less than the cross-industry
geographies invest in digital advertising differently: average on paid search. As brand relevance is challenged,
marketers must ensure that they adapt their marketing mix,
• The largest companies in the CMO Spend Survey — those pivoting to pull channels such as search that link brand-
with more than $10 billion in annual revenue — have the agnostic consumer needs to their products (see “Predicts
largest appetite for digital advertising, averaging 11.6% of 2018: Brand Relevance Under Fire, Automation on the Rise”).
the marketing budget. A smaller share of their budget (4.1%)
goes to search advertising compared to companies with less Recommendations:
than $10 billion in annual revenue. In contrast, companies • Build in-house expertise in media strategy and planning.
with annual revenues of $500 million to $1 billion allocated Media planning has long been the domain of agencies, but
8.5% of their marketing budget to digital advertising. times are changing. Agencies still offer brands the benefit
of scale and experience. However, brands are increasingly
• U.K. marketers spend the most on digital advertising,
recognizing that, even if they outsource most of this work,
allocating 11.8% on digital advertisements and 5.0% on paid
they still need to be an informed and savvy client and
search. This is despite new challenges brought about by
understand the dynamics of the media mix8 (see “How to
the European Union’s General Data Protection Regulation
Take Programmatic Advertising In-House”).

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 CMO Spend Survey 2018–2019

• Map your media and channel mix to the customer Figure 4. CMOs Allocate One-Quarter of Their Budget to
journey. Comparing marketing spend to benchmarks is Search, Email and Website
a useful exercise, but your media and channel choices
should be driven by your customers and your strategy.
2018 CMO Budget Allocation by Marketing
Marketing leaders should map media investments and
Channels and Marketing Enablers
channels to customer journey maps to provide only the
most relevant marketing messages on the right channel, Mean Percentage of Budget Shown
for the right customer (see “Create Actionable, Insight-
Driven Journey Maps”).

Digital Workhorses Account for 25% of Marketing Investments

CMOs still rely heavily on tried-and-true digital media, such Search Email Website
as paid and organic search, website, and email. Combined,
these four categories represent one-quarter of the average 11.2% 5.9% 7.6%
marketing expense budget (see Figure 4).
One quarter of the average marketing budget is allocated
Some marketers have long proselytized the demise of these to search, email and website.
fundamental digital marketing techniques in lieu of newer,
more exciting tactics and technologies (such as influencer
Base: All respondents, excludes DK, n=618
marketing and artificial intelligence). However, they Q Please tell us how your company's fiscal year 2018 total marketing expense budget is being
remain as relevant as ever. The reasons so many marketers allocated to or spent on each of the following marketing channel and marketing enablers?
Source: Gartner (October 2018)
continue to invest in paid and organic search, website,
and email are simple: They still work, and they’re easy to
measure during a time when calculating marketing ROI is
all-important. Furthermore, these dependable channels
are relatively cost-effective, and organizations usually have
no problem finding in-house skills to fuel these marketing
initiatives within their organization.

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 11

 CMO Spend Survey 2018–2019

Meanwhile, marketers face challenges proving the value of Recommendations:

some newer marketing techniques. For example, it’s difficult • Assign accountability for multichannel orchestration. With so
to demonstrate the economic impact influencers have on ROI many marketing channels and tactics in use today, marketers
(see “L2 Intelligence: Influencers 2017”). Contrast this with are challenged with having to select and orchestrate a mix of
organic search (SEO), where measurability is cited as the No. marketing channels that provides customers with meaningful
1 reason for channel selection (see “Multichannel Marketing interactions across their journeys with their brand. The most
Effectiveness Survey 2017: Marketers Are on a Mission to successful brands define a multichannel marketing leader,
Advance Multichannel Marketing Results”). with the expertise and organizational gravitas to be able to
Looking ahead to 2019, a majority of respondents expect to build, execute and optimize strategies across the marketing
increase spending across all categories of marketing — with the organization (see “Multichannel Marketing Effectiveness
exception of offline advertising. Even there, 49% say they plan to Survey 2017: Marketers Are on a Mission to Advance
increase spending on TV and other offline advertising initiatives; Multichannel Marketing Results”).
the other 51% plan to freeze or cut spending altogether. • Avoid a “set-it-and-forget-it” attitude to long-tenured
Conversely, more than two-thirds of survey respondents channels. Just because you’ve been investing in paid
expect to increase spending in mobile marketing. Earlier search since 2005, doesn’t mean you’re utilizing this
research shows marketers take one of two approaches to evergreen marketing channel effectively. With marketing
investing in mobile marketing. They either pursue mobile- technologies and consumer behaviors in constant flux,
centric tactics that take advantage of the distinct capabilities marketing leaders must audit and refresh these tried-and-
of mobile devices, or they invest in mobile-extender tactics true channel strategies often to ensure investments are
that adapt versions of desktop interactions, such as mobile used efficiently (see “What Search Advertising’s Evolution
search and mobile-optimized websites (see “Two Types of Means to Multichannel Marketing”).
Mobile Marketers: Which One Are You?”).
Over 9% of the Marketing Budget Is Allocated to Digital
However, even mobile-extender tactics are in need of renewed Commerce, but CMOs Downplay Its Strategic Importance
investments. First announced in 2016, Google’s mobile-first Up from 8.1% in 2017, 9.2% of marketing’s budget is now
index rolled out this year. It predominantly uses the mobile allocated to digital commerce, making it the largest area of
rather than the desktop version of content for ranking and investment across the marketing expense budget in 2018 (see
indexing. This places an impetus on marketers to ensure Figure 5). Spending on digital commerce chimes with CEOs’
company websites are optimized for mobile users first.9 digitization goals. In a Gartner survey of 460 CEOs and senior

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 12

 CMO Spend Survey 2018–2019

Figure 5. CMOs Allocate 9.2% of Marketing Budget to Digital Commerce

2018 CMO Budget Allocation by Marketing Channels and Marketing Enablers

Mean Percentage of Budget Shown

9.2%
8.9%
8.3%
7.6%
7.0% 7.0% 7.1%
6.4%
5.9% 5.9% 5.9%
5.2% 5.2% 5.3%
4.8%
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Base: All respondents, excludes DK, n=610

Q Please tell us how your company's fiscal year 2018 total marketing expense budget is being allocated to orspent on each of the following marketing channel and marketing enablers?
Source: Gartner (October 2018)

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 13

 CMO Spend Survey 2018–2019

business leaders last year, 62% of respondents said they have Recommendations:
a management initiative or transformation program underway • Benchmark your digital commerce capabilities, from
to make their business more digital. In short, the majority the inside and outside. Your digital marketing strategy
of CEOs recognize that they need to transact with their must be built on a realistic view of your capabilities. Use
customers online, be they in B2B or B2C brands. Gartner’s Marketing Maturity Assessment to define the
While spend is strong across all industry verticals, CMOs gap between the current state and the desired future state
downplay the strategic importance of digital commerce as a of digital commerce capabilities. Align your future-state
capability. When asked to rank the capabilities most vital to goals with your marketing strategy and the expectations of
the delivery of marketing strategy over the next 18 months, stakeholders across the enterprise. Ensure that capabilities
only 19% place digital commerce in their top three. are grounded in an external view of performance. Use
Gartner’s Digital Performance Benchmarks and Amazon IQ
Digital commerce success is not built on budget alone. CMOs data to understand how well your brand performs against
must appreciate market dynamics and changing customer peers and competitors across digital commerce channels.
needs and journeys. For example, Gartner Iconoculture
research predicts that, in 2019, two-thirds of U.S. consumers • Understand how emerging shopping trends impact your
expect to be able to connect directly to the brands they buy brand. Shopping behaviors and customer attitudes change
from, shifting the channel mix and favoring brands that sell fast. Use the Gartner Iconoculture “Watch List Shopping
direct (see “Watch List Retail in 2019”). Meanwhile Gartner and Retail” to understand and anticipate emerging online
L2 research highlights the threats that Amazon private label shopping trends. Ensure that your digital commerce
consumer goods pose across a range of categories (see “L2 strategy is flexible enough to minimize risks and maximize
Intelligence: Amazon Private Label”). CMOs must match budget emerging opportunities.
commitment with digital commerce capabilities, ensuring that
One in Every $6 in Marketing Is Spent on Innovation, but
they can anticipate and respond to the emerging opportunities
Boosted Innovation Budgets Flatter to Deceive
(and threats) digital commerce poses to their strategic success.
In this year’s CMO Spend Survey, 9.3% of CMOs said that
marketing innovation will be vital to the delivery of their
company’s marketing strategy over the next 18 months (see
Figure 6). This should come as no surprise, considering the

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 CMO Spend Survey 2018–2019

Figure 6. CMOs Highly Value and Heavily Back pace of change facing marketing in recent years. Marketers
Marketing Innovation have had to adapt to a barrage of changes in consumer
behaviors, technologies and environmental conditions. Though
tried-and-tested marketing practices still have their place
CMOs Focus On Marketing Innovation inside the organization, marketing leaders are embracing new
channels, models and methods of reaching customers and
prospects to remain competitive within the marketplace.

The 2018 Gartner CEO and Senior Business Executive Survey

9% 16% 63% (see “2018 CEO Survey: CIOs Should Guide Business Leaders
Toward Deep-Discipline Digital Business”) confirms this
growing appetite for innovation across the enterprise; 41%
of respondents believe that their company is an innovation
“Pioneer” leading new industry trends and directions. Few
modern companies, let alone modern CMOs, want to be
Innovation vital Budget allocated Expect 2019
considered the opposite of innovative. So, perhaps, it’s no
to strategy to innovation innovation surprise that enterprises and their CMOs value innovation.
delivery budget increase
But innovation is much more than a self-concept or belief.
Meaningful innovation requires a collaborative culture,
Base: All respondents, n=621 structure and committed investments. Marketers, in particular,
Q. What capabilities do you consider most vital in supporting the delivery of your company's
marketing strategy over the next 18 months? have been keen to match innovation intent with action and
Q. What percentage of your company's fiscal year 2018 total marketing expense budget is set investment. This was true in 2017, when CMOs reported that
aside for marketing innovation?
Q. Compared to fiscal year 2018, how do you expect spending on marketing innovation to 10% of their marketing budgets went toward innovation.
change in fiscal 2019? But innovation investments ramped up significantly in 2018,
Source: Gartner (October 2018)
with CMOs allocating 16% of their total marketing budget to
marketing innovation.

Furthermore, CMOs intend to grow this investment — 63%

expect to increase innovation spend within their organization
in 2019.

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 CMO Spend Survey 2018–2019

Despite their obvious enthusiasm for innovation, marketers’ in product marketing, R&D and IT around achievable goals
innovation intent is mismatched with their innovation that contribute to overall organizational success (see
capabilities. They’ve secured significant innovation budgets “Toolkit: Building Innovation on Your Marketing Team”).
without the wherewithal to deliver programs that provide
material value to the enterprise. • Build robust innovation metrics, pipeline, return on
objective and eventual ROI. Innovation programs are
often stymied when senior management expects them to
demonstrate profitability and ROI too soon. Though the
This is evidenced by responses to Gartner’s 2018 Marketing results of innovation are often hard to measure quantitatively
Maturity Assessment: Marketing leaders surveyed scored and difficult to know in advance, that doesn’t mean
themselves an average of 2.3 out of 5 for their maturity innovation programs lack meaningful success measures.
in innovation. Meanwhile, marketers noted that they wish Build a suite of leading indicators of innovation success by
to achieve a 4.3 maturity rating, indicating a significant using a mix of objective and subjective metrics (see “Follow 7
innovation capability gap. Best Practices to Create an Innovation Center”).
With such a large gap in capability, it’s no wonder CMOs are
CMOs Prioritize Customer Experience and Customer
investing heavily in innovation initiatives. As CEOs expect
Analytics, but Risk Overlooking Acquisition and Retention
their organizations to lead the way with innovation, marketing
leaders are faced with increasing pressure to excel at cutting Gartner’s 2017 CMO Strategy Survey revealed that customer
edge initiatives. However, marketing leaders risk syphoning capabilities, such as customer experience (CX), customer
off precious marketing investments for poorly defined loyalty, and customer retention and growth, dominate
projects with a loose scope and looser success criteria. CMOs’ list of skills they feel are vital to deliver a strong,
cohesive marketing strategy (see “CMO Strategy Survey 2017:
Recommendations: Marketers Track Many Metrics, but Risk Overlooking What
Matters Most to the Business”).
• Define the scope and mandate of marketing innovation.
Your innovation programs may be broad in scope, but Fast-forward a year, and CX initiatives continue to dominate
they should have a shared sense of purpose and direction. the CMO’s agenda. CMOs surveyed in this year’s CMO Spend
Appoint a leader accountable for defining an innovation Survey cited CX as one of the top-three capabilities vital to
roadmap within your organization. Empower your their marketing strategies in the coming 18 months. What’s
innovation leader to orchestrate efforts with stakeholders more, CMOs estimate that 18% of their overall marketing

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 CMO Spend Survey 2018–2019

budgets are allocated to customer experience initiatives. This Figure 7. The Most Vital Marketing Capabilities Supporting
spending is embedded across multiple marketing activities, the Delivery of Marketing Strategies Over the Next 18 Months
such as the website and digital commerce.

Despite this focus on CX, customer retention and growth Most Vital Marketing Capabilities Supporting the
has lost some ground, falling behind capabilities such as Delivery of Marketing Strategies Over the Next
marketing technology, digital business transformation and 18 Months
innovation. Customer acquisition fares much worse, cited by Percentage of respondents. Top 3 Rank Shown
only 16% of CMOs as a top-three capability (see Figure 7).
Marketing and customer
analytics 40%
This presents an interesting mismatch: CMOs have a strong
Marketing technology
focus on customer experience, but to what end? As with all acquisition and use 34%
other marketing capabilities, the long-term output of any Customer experience 30%
CX program is to create business value, such as that gained Digital business
27%
transformation
through profitable customer retention and growth outcomes,
Marketing innovation 23%
as well as the acquisition of new and profitable customers. Customer retention and
growth 21%
Therefore, CX strategies must be more than mere rhetoric; Digital commerce 19%
marketing investments must yield results. As CX reaches Strategic planning relative
to corporate strategy 19%
maturity in organizations, programs must be elevated from eye- Content creation and
catching initiatives to pragmatic vehicles for business success. management 17%
Customer acquisition 16%
Recommendations: Marketing channel
15%
development
• Define the scope and success criteria for CX programs. New product development 14%
Clearly articulate how investments in CX programs deliver Sales channel development 12%
results in terms of customer growth and profitability.
Prioritize metrics that demonstrate measurable
Lead conversion 10%
improvements in customer satisfaction, loyalty and brand Base: All respondents, n=621
advocacy in order to prove their effectiveness to internal Q. What capabilities do you consider most vital in supporting the delivery of your company's
marketing strategy over the next 18 months?
Source: Gartner (October 2018)

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 CMO Spend Survey 2018–2019

stakeholders and maximize results (see “The ROI of “awareness” as the most important metric (see Figure 8),
Customer Experience Starts With Customer Outcomes and beating out ROI, market share, and measures of customer
Ends With Business Results”). value and satisfaction. But there are significant variances
across industries. Media companies value awareness the
• Map strategically important capabilities against most, with 39.4% of respondents placing this metric in
marketing’s talent roadmap. Think beyond expert and their top five. This compares with only 26.9% for high-tech
practitioner level for core capabilities like analytics. companies. Financial services companies rate ROI as the most
Consider how fundamental skills can be embedded important metric, with 45.7% placing this in their top five. This
throughout the organization. By nurturing diverse skill sets, compares with only 19.4% for high-tech companies.
tapping new talent sources and prioritizing collaboration,
marketing leaders can fuel their brand’s adaptability and ROI can be difficult to measure accurately, especially when
deliver business results (see “Designing Your Marketing channel mix and customer journeys are complex. In addition,
Team for the Next Decade”). availability of revenue and cost data required to calculate
ROI varies across industries and enterprises. It’s easy to
CMOs Struggle to Align Marketing Metrics With Business assume that many CMOs simply do not have the capability
Priorities to effectively track ROI. However, the majority (61%) of CMOs
Proving the value of marketing to the enterprise remains a currently cite ROI as a key metric that informs the marketing
perennial challenge for CMOs. In the past, there’s often been a strategy, but only half that number place ROI as one of their
stark difference in the metrics that key stakeholders hold dear. top five strategic key performance indicators (KPIs). In a time
CEOs, for example, may value revenue, profitability and market when marketing leaders are often challenged with filtering
value share, while CMOs may elevate share of voice, awareness through the mass of data to find metrics that really matter,
and brand metrics to their strategic dashboards. Modern CMOs marketers must not underplay ROI’s strategic importance
have a shared understanding of the metrics that demonstrate within the enterprise.
the value marketing delivers to the enterprise (see “CMO
Numerous Gartner surveys, backed by a large volume of client
Perspective: Six Habits of the Modern CMO”).
inquiries, have proved beyond doubt the strategic imperative
However, old habits die hard, and many CMOs still gravitate of customer experience for CMOs (see the finding “CMOs
toward metrics that have less meaning outside the marketing Prioritize Customer Experience and Customer Analytics, but
organization. When asked to define the most important Risk Overlooking Acquisition and Retention”).
metrics on their marketing dashboard, CMOs surveyed cited

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 CMO Spend Survey 2018–2019

Figure 8. CMOs Rank Awareness as the Most Important Metric

As Peter Drucker famously said,
Most Important Metric Tracked on CMO Dashboard “If you can’t measure it, you can’t
manage it.”

Awareness 12%
Brand Awareness 12% Share of wallet 9%
Measures
Competitive benchmarks 9% Logic dictates that common customer
Brand health/brand tracker 8% measures, such as customer
Share of voice 8% acquisition cost (CAC), customer
Return on 7%
ROI 7% satisfaction (CSAT) and retention would
Investment Sentiment 7% be closely tracked on CMOs’ strategic
Measures Market share 6%
dashboards. But only 51% of CMOs
CSAT 4%
say they track customer acquisition
CPM 4%
CPA 3% costs; even fewer (43%) track customer
1%
Customer Lifetime
CAC 3% retention or churn rates. Furthermore,
Value Measures
AOV 3% brand metrics are used two times
Registration 2% more frequently as KPIs than customer
Behavior 2% experience metrics.
Marketing qualified leads 2%
Sales qualified leads 2% Measurement is custom — your
12% of CMOs cite brand Conversion rate 2% strategic dashboard must reflect
awareness as most Cost per lead 2%
the dynamics of your industry and
NPS 2%
important metric. This the requirements of your enterprise.
CES 1%
compares with 7% for Churn rate 1%
However, aligning metrics with
ROI, and only 1% for CLV 1% strategic priorities is nonnegotiable. If
lifetime value. Volume 1% you’re committed to delivering robust
experiences for your customers, and
Base: All respondents, n=618 excludes Don’t Knows.
growth and value to the business, you
Q. Considering all of the metrics being tracked on your CMO (or senior marketing leadership) dashboard, which are most
important to inform marketing strategy? must elevate the specific metrics that
Source: Gartner (October 2018)
track these efforts. Otherwise, you risk

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 CMO Spend Survey 2018–2019

creating strategies that serve as mere rhetoric rather than marketing campaigns and communication, and more than half
actionable plans and goals. have increased their personalization investment since 2017
(see “Rethinking Personalization for Maximum Impact”).
Recommendations:
This year’s CMO Spend Survey found investments in
• Conduct an honest appraisal of your metrics and KPIs. Do
personalization to be near universal. Overall, CMOs spend an
your metrics and KPIs have a direct link to the objectives
average of 14.2% of their budget on personalization efforts,
outlined in your strategy? Use a hierarchy of marketing
with double-digit percentage averages across all industries
metrics that provides a clear framework for separating the
and business models (see Figure 9).
metrics that tie directly to the results the executive suite
cares most about, such as business outcomes, from those This level of committed investment affirms the challenge
that inform strategy, operations and tactics. To help build of delivering relevant messages to customers at scale.
out this hierarchy of marketing metrics, collaborate with Personalization requires an intimate knowledge of customer
cross-functional peers to identify the metrics they use to journeys; helpful, relevant content that drives action;
track business growth (see “CMO Perspective: Identify and technology and platforms that help deliver, measure
Marketing Metrics That Matter Most”). and optimize experiences (see “Magic Quadrant for
Personalization Engines”).
• Elevate metrics that demonstrate financial and customer
value. Get serious about proving the value of marketing However, cross-industry investment belies the huge variance
in delivering better experiences, and growth and return. in personalization capabilities. Gartner’s 2017 Multichannel
Don’t wait for perfection — leverage the data you have at Marketing Effectiveness Survey highlighted that, while “batch
your disposal now, and use proxies to fill in any gaps (see and blast” and broad-based campaigns are becoming things
“Marketing Measurement Hacks for 5 Common Challenges”). of the past, real-time personalization and event-triggered
capabilities are far from where marketers need them to be.
Personalization Prevails, but Means Different Things to
Different People Marketers spending big on personalization should proceed
The increasing focus on customer experience and the fight with caution. Personalization requires a deep well of customer
for customer attention reflects personalization’s emergence data. And more data doesn’t always make for more resonant
as a strategically important marketing capability. Gartner’s personalization. While there’s never been a time when more
2018 State of Personalization Survey supports this, reporting data has been available to marketers, consumers have
that 87% of marketing leaders currently personalize their grown wary of the way brands collect, store and use their

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 CMO Spend Survey 2018–2019

personal data for marketing activities. Figure 9. Personalization Investments Across Industries
Marketers must tread lightly in their
personalization efforts to appease
Personalization Investment Across Industries
both consumers and regulators (see
“Understanding Consumer Attitudes Mean Percentage of Budget Shown
Toward Personalization”).10
16.2% 16.5%
Recommendations: 15.0%
14.2% 14.1% 14.3%
13.3% 13.3%
• Build a personalization strategy.
Define the role personalization can
10.6%
play in helping you achieve business
objectives, whether through a
marketing, digital commerce or CX
use case. Consider your business
context and goals to determine your
company’s strategic use case (see
“Choose a Personalization Engine to
Meet Your Needs”).

• Audit your brand’s personalization

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experiences that truly help them Base: All respondents, excludes Don’t knows. Base sizes vary by segment
along their journey with your brand. Q. What percentage of your company's fiscal year 2018 total marketing expense budget is set aside
for customer experience and personalization?
Use your customer journey maps to Source: Gartner (October 2018)
objectively appraise the value of your
personalization offers across key

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 21

 CMO Spend Survey 2018–2019

customer touchpoints (see “Personalization and Journey Gartner’s 2017-2018 CMO Spend Survey: The purpose of this
Mapping Framework [Clorox]”). survey was to collect insight from business leaders responsible
for marketing to understand marketing strategies, spending
• Build a personalization program risk log. Appetite priorities and the CMO’s responsibilities. The research was
and regulations regarding data and personalization are conducted using a mixed methodology (online/CATI) from
changing. Your personalization programs’ initial objectives June 2017 through August 2017 among 353 respondents in
may be out of step with the current mood surrounding data the United States (61%), Canada (12%) and the United Kingdom
privacy. Therefore, marketers should revisit the scope of (27%). Respondents were required to have involvement in
their personalization program. Build a risk log that identifies decisions pertaining to their company’s strategy, activities and/
potential risks and evaluates the severity of their impacts on or spending on marketing and/or digital marketing. Seventy-
your programs. three percent of the respondents came from organizations with
$1 billion or more in annual revenue.
Methodology
Gartner’s 2018-2019 CMO Spend Survey: The purpose The 2018 Gartner CEO and Senior Business Executive
of this survey was to understand the marketing priorities Survey: Gartner conducted this research from September
and budget allocations of marketers to help companies through December 2017 to examine CEOs’ and senior business
benchmark, allocate spend and prioritize. The research was executives’ views on current business issues, as well as some
conducted using a mixed methodology (online/CATI) from areas of technology agenda impact. In total, 460 business
July 2018 through August 2018 among 621 respondents in the leaders were qualified and surveyed. The bulk of the research
United States (60%), Canada (5%) and the United Kingdom was conducted via telephone interview (333), an additional 123
(35%). Respondents were required to have involvement in surveys were achieved online and four were selfadministered
decisions pertaining to their company’s strategy, activities paper surveys. All respondents were screened for active
and/or budget related to marketing. Ninety percent of the employment in organizations with greater than $50 million
respondents came from organizations with $1 billion or more in annual revenue. The sample mix is as follows: CEO (290
in annual revenue. The respondents came from a variety of respondents); CFO (100); COO (13), chairperson, president,
industries: financial services (70 respondents), high tech (68 board director or other C-level (57). By region: North America
respondents), manufacturing (67 respondents), consumer (173 respondents); Europe (109), Asia/Pacific (92); Latin
products (126 respondents), media (71 respondents), retail America (43); South Africa (12); Middle East (31).
(72 respondents), healthcare providers (76 respondents), and
travel (71 respondents).

Gartner for Marketers [email protected] @GartnerDigital gartner.com/marketing 22

 CMO Spend Survey 2018–2019

Gartner’s 2018 Marketing Technology Survey: Results on their responsibility for setting marketing strategy. The
presented are based on a Gartner study to understand how research was conducted using a mixed methodology (online/
marketers are investing in, deploying and getting value CATI) from March through April 2017; 197 marketing leaders
out of technology. The primary research was conducted were based in North America and 162 in the U.K. Respondents
using a mixed methodology (online/CATI) from April 2018 came from companies with annual revenue of more than
through June 2018 among 504 respondents in North $500 million; the mean was $4.4 billion. They came from
America (60%) and the U.K. (40%). Eighty-six percent of the eight vertical industries: high tech (53 respondents), financial
respondents came from organizations with $1 billion or more services (42 respondents), healthcare (40 respondents),
in annual revenue. The respondents came from a variety of manufacturing (50 respondents), consumer packaged
industries: financial services (88 respondents), high tech (128 goods (41 respondents), media (42 respondents), retail (41
respondents), manufacturing (83 respondents), consumer respondents) and transportation/hospitality (50 respondents).
products (33 respondents), media (31 respondents), retail (47
respondents), healthcare (51 respondents), and travel and The Gartner surveys were developed collaboratively by a
hospitality (43 respondents). Respondents were required to team of Gartner analysts who follow marketing, and was
have a primary role in involvement in decisions pertaining to tested and administered by Gartner’s Research Data and
their company’s marketing technology strategy. Respondents Analytics (RDA) team.
were also required to provide direct support to marketing. Results do not represent global findings or the market
Gartner’s 2018 Marketing Maturity Assessment: The findings as a whole but reflect sentiment of the respondents and
in this report are based on the responses of 257 marketers companies surveyed.
who took the assessment from May 2016 through March 2018.
Of those responding, 63% came from businesses with more
than $1 billion in annual revenue, 33% were from businesses
with less than $1 billion in annual revenue, and 4% were from
government, educational or nonprofit institutions.

Gartner’s 2017 CMO Strategy Survey: Results are based on

Gartner’s CMO Strategy Survey of 359 marketing leaders to
determine the scope of their strategy and accountabilities,
capabilities and resources. Participants were screened based

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 CMO Spend Survey 2018–2019

Gartner Recommended Reading Evidence

Some documents may not be available as part of your current 1 “ The Indicator That Heralds Impending U.S. Recessions Is
Gartner subscription. Starting to Flash — but One Huge Factor Is Different This
Time,” Business Insider Australia.
“CMO Spend Survey 2017–2018: Budgets Recede Amid
Demand for Results” 2 “ What Are Trade Tariffs and Who Will They Affect?” The
Guardian.
“Ignition Guide to Strategic Planning for Marketing (B2B &
B2C)” 3 “ Finance Industry Tears Into Britain’s Brexit Trading Plans,”
Reuters.
“How to Prove the Value of Marketing to the Enterprise”
4 “ Emerging Markets Briefly Enter a Bear Market as Higher
“Driving Cost Optimization Across the Enterprise: A Marketing Rates and Trade Fears Send Investors Fleeing,” CNBC.
Perspective”
5 “ Why a Recession In 2019 Is Possible When Unemployment
“Demystifying Marketing Technology Integration” Is at 50-Year Lows,” Forbes.

6 “ How the GDPR Will Impact Digital Advertising,” The

Telegraph.

7 “ IAB Internet Advertising Revenue Report,” Interactive

Advertising Bureau.

8 “ Vodafone Brings Digital Media-Buying In-House in

Pioneering Move,” Campaign.
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its
affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written
permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for
9 “ Google’s Mobile-First Indexing Has Set Sail. Are You on
Gartner Services posted on gartner.com. The information contained in this publication has been obtained from Board? 5 SEO Essentials,” Search Engine Land.
sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of
such information and shall have no liability for errors, omissions or inadequacies in such information. This
publication consists of the opinions of Gartner’s research organization and should not be construed as
statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner
10 “ Consumer Insight: The Halls Have Eyes and the Walls
research may include a discussion of related legal issues, Gartner does not provide legal advice or services and Have Ears,” Gartner.
its research should not be construed or used as such. Gartner is a public company, and its shareholders may
include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of
Directors may include senior managers of these firms or funds. Gartner research is produced independently by
its research organization without input or influence from these firms, funds or their managers. For further
information on the independence and integrity of Gartner research, see “Guiding Principles on Independence
and Objectivity.”

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 CMO Spend Survey 2018–2019

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