A collapse in economic activity during the pandemic forced many CMOs to make difficult budget decisions. Based on the annual CMO spend survey from Gartner, digital marketing channels accounted for almost 80% of budgets in 2020.
As CMOs entered 2020, they anticipated budgets that averaged 11% of revenue. Then the global COVID-19 pandemic struck. Triggering a collapse in demand in some industries such as travel and hospitality. Significant disruptions to others such as retail and automotive. 44% of CMOs surveyed in April and May 2020. They are facing midyear budget cuts in 2020 as a result of the pandemic.
With digital channels accounting for almost 80% of budgets in 2020, nearly two-thirds expect channel budgets to increase in 2021.
CMOs spent nearly one-quarter (22%) of the marketing budget on digital advertising (13.5%). Including display, video or ads on platforms like Amazon, and paid search (8.6%). Another 59% went to owned and earned digital channels such as social marketing, the website, SEO and mobile marketing. The emphasis on digital channels was magnified during the early months of the global pandemic. Consumers flocked online for information, entertainment and connection.
Event marketing was severely impacted by social distancing and international travel bans. Events require significant forward planning and investment, so 2020 event budgets still account for almost 9% of the total. 44% of CMOs either cancelled in-person events, transitioned to virtual events, or postponed in-person events to the second half of 2020.
Offline advertising, which includes TV advertising, held ground in 2020, accounting for close to 10% of the budget. Like events, offline media planning and buying is less immediately adaptable than digital advertising. Industries most heavily impacted by the lockdown, such as travel and nonessential retail, significantly cut spend. Meanwhile, those sectors on the front lines maintained, and even increased investment in TV advertising and other offline channels. Food delivery, healthcare brands and retailers used media investments to deliver vital messages to customers.
CMOs feel confident about the upcoming 12 months. On average, 74% said they expect to increase spending on digital advertising. 66% expect to increase spending on paid search. B2C CMOs are more optimistic than B2B CMOs about projected increases across channels. 78% of B2C CMOs expect to spend more on digital advertising in 2021 compared to 69% of the B2B CMOs surveyed.
B2C 2021 Marketing budget overview by channel:
B2B 2021 Marketing budget overview by channel:
It seems the world’s going online with a strong and growing focus on digital ads. How are you going to stand out and get your brand seen?
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