KUALA LUMPUR (May 24): Marketing budgets have climbed to 9.5% of total company revenue in 2022, an increase from 6.4% in 2021.

In a statement on Monday (May 23), technology and consulting firm Gartner Inc said that while marketing budgets are increasing this year, they still lag pre-pandemic spending levels.

The annual Gartner 2022 Chief Marketing Officers (CMO) Spend and Strategy Survey was conducted between February through March 2022 among 405 CMOs and other marketing leaders in North America, as well as Northern and Western Europe across different industries, company sizes and revenue, with the majority of respondents reporting annual revenue of more than US$1 billion (about RM4.39 billion).

Gartner chief of research and vice-president analyst Ewan McIntyre said in the face of telling macroeconomic considerations, CMOs hold on to a belief that their own economic outlook is strong.

“Despite inflation, the Russian invasion of Ukraine, supply chain issues exacerbated by China’s [Covid-19] lockdown measures and unprecedented talent competition, CMOs appear sanguine.

“For example, the majority of CMOs surveyed thought inflationary pressures hitting their business and their customers will have a positive impact on their strategy and investment in the year ahead,” he said.

Gartner said 70% of respondents reported that their budgets had increased this year, but with marketing budgets increasing to 9.5% of total company revenue, it is still down from the average budget between 2018 and 2020 of 10.9%.

Gartner said CMOs had made the shift from digital-first to hybrid multichannel strategies.

It said as a proportion of their 2022 budget allocated to online and offline channels, online channels take the largest share (56%).

However, it said offline channels account for almost half the total available budget (44%), a more equitable split than in recent years.

The firm said looking at the average spend across industries, social advertising tops the list, closely followed by paid search and digital display.

McIntyre said there had been a lot of discussions around Covid-19 shifting consumers to a digital-first mindset.

“However, as Western Europe and North America relax pandemic protocols, customer journeys have recalibrated.

“Post-lockdown, CMOs need to listen carefully to their customers and pay attention to the channels they are using as this more closely resembles a hybrid reality,” he said.