CMOs spent 15 per cent less on marketing technology in 2017 than the previous year, according to Gartner’s recently released CMO Spend Survey 2017-2018. Conventional wisdom is that marketing is becoming more and more automated and customer interaction is increasingly driven by platforms and software. We've all seen those predictions that soon CMOs will soon spend more on technology than the CIO. So what's happening here?
According to the report, one reason spending has dropped from 27% of marketing budgets to 22% is that CMOs are concerned about their ability to acquire and manage technology effectively. Some marketers over-promised the ROI their technology would deliver. "Significant investments need to prove business value, or else they end up being considered costly vanity projects,” says Gartner. Simultaneously, CMOs are feeling the pinch on budgets, which dropped from their peak by 6%.
Whatever cold feet or budget pressures CMOs feel, they are continuing to spend 10% of their budgets on marketing innovation, and 23% of those surveyed have a fixed budget for innovation. In other survey findings, two-thirds of the CMOs plan to increase their investment on digital, with corresponding drops in traditional media. Marketing analytics gets the biggest share of budget (9.2%). Gartner also learned that CMO are focusing budgets on existing customers and customer acquisition.
CMOs already have more technology than they can justify with ROI, so they're dialling back. Although the headline looks gloomy, clearly there is an opportunity to move ahead and get real value from all the platforms and software already invested in. The survey indicates to me that CMOs are committed to innovation, and ready to complete the transformation to a customer-centric, digital marketing model underpinned by analytics. That requires not just better deployment of technology, but also leading change in their organizations to put the right teams in place, change outmoded processes, and develop the right marketing content. Buying software requires cash; transforming organizations takes fresh thinking, time and talent.
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