CMOs are more bullish about their budgets in the next 12 months than they were this time last year. In fact, marketers predict a rise of 8.7% in their budgets in the coming year, with the B2B and B2C services sectors forecasting the largest increases. Along with this growth, the latest The CMO Survey [download page] shows that marketing budgets are accounting for more of overall company budgets than they have in the history of the study.
The survey of more than 300 top marketers in the US (virtually all of whom are VP-level and above) found that marketing budgets now account for almost one-eighth (12%) of total firm budgets. This latest edition of the report (which is produced twice a year) indicates that B2B product companies (15.5%) and B2C service companies (14.6%) over-index the average in share of firm revenues allocated to marketing budgets.
Here’s a deeper dive into where marketers are spending their budgets.
After experiencing a fairly significant decrease in the six months between August 2018 and February 2019, spending on social media has somewhat leveled out. For the August 2019 edition of the report, social media spending accounted for 11.9% of marketing budgets, a decrease year-over-year from 13.8% in August 2018.
This does not mean that businesses are moving their marketing efforts away from social. The survey indicates quite the opposite, with respondents projecting that within the next 5 years, spending on social will account for almost one-quarter (22.5%) of marketing budgets. While the projections may seem somewhat optimistic, social’s growth does seem likely, especially given it is considered to be one of the most effective marketing tactics by both B2B and B2C organizations.
Research has found that businesses are still planning to use platforms like Instagram, Facebook and YouTube for both organic efforts and paid ads, but this latest survey shows that social media contribution towards company performance has remained consistently low. Indeed, on a scale of 1 (not at all) to 7 (very highly), respondents gave social media a middling score of 3.3, which has been fairly consistent throughout the past 3 years. This is even as new engagement formats become popular – for example, social media stories, which are considered effective by the majority of marketers, now account for close to half of Instagram ad spend.
While spending on social media is currently lower than in the recent past, mobile is experiencing no such decline. In fact, the percentage of marketing budgets being allocated towards mobile has more than doubled in just two years. As of this August 2019 edition, mobile accounts for 12.8% of marketing budgets, up from 6.0% in August 2017 and outweighing social’s share for the first time.
Growth is not expected to slow down either, with respondents projecting that mobile will account for 21.8% of marketing budgets by 2024. The B2C sector is forecasted to experience the most growth in this time period.
Considering that the amount of time consumers across the globe spend on mobile internet has increased by almost one hour per day since 2014, mobile’s growing portion of marketing budgets certainly has a solid basis. Other forecasts also predict strong increases, with PwC estimating that mobile will account for 4 in 5 (81%) online advertising dollars by 2023.
Marketing analytics spending has steadily risen as well. Analytics now accounts for 7.2% of current marketing budgets, up from 6.7% from a year ago. As with social media and mobile, survey respondents expect to see their companies use analytics more in the next few years, with analytics believed to account for 11.6% of marketing budgets in the next three years.
February 2019 saw the percentage of time marketing analytics was used in decision making at a record high (43.5%), although that figure has fallen since then. Respondents claimed that marketing analytics was used 39.3% of the time in the decision-making process as of August 2019.
The full report can be downloaded here.
About the Data: Findings are based on a survey of 341 marketing professionals (95% of which were VP-level or above). Respondents represent B2B product (33.6%), B2B services (30.7%), B2C products (23.3%) and B2C services (12.4%) economic sectors.