After rising to the highest levels in the last 15 years, marketing budgets dropped back to pre-Covid numbers, according to new data from The CMO Survey.
The biannual poll, a collaboration between the American Marketing Association, Deloitte, and Duke University's Fuqua School of Business, was conducted in March 2023 and collected responses from 314 marketing leaders at for-profit U.S. companies.
The findings show a return to pre-pandemic levels for marketing expenditures as a percentage of companies’ budgets. But the yearly growth in marketing spending slowed down 72% (10.4% to 2.9%), compared with the last survey.
A majority of firms indicated inflationary pressures impacted marketing spend. Results showed digital marketing spending also slowed, but its decrease was less dramatic than in overall marketing spending (15.0% increase in digital marketing spending in the past survey vs an 8.2% increase in this survey). On average, companies spent 53.8% of marketing budgets on digital marketing.
Among marketing areas predicted to decrease, firms say they will slow investments in customer relationship management systems, brand building, and customer experience, with the largest drop recorded in brand building (5.5% budget increase predicted vs 11.7% the previous year.)
Marketers reported a higher use of tactical, short-term metrics like sales revenues, digital performance, content engagement, and lead generation, rather than strategic metrics such as brand equity value, customer insight usage, and brand differentiation. Compared with two years ago, though, firms are increasing the use of these key metrics, with brand differentiation jumping 111% from 2021.
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