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Investments in paid media rose from 23% of the total marketing budget in 2018 to 25% in 2019, according to The Annual CMO Spend Survey 2019-2020 from Gartner, but the study finds only 10% maximize
opportunities from search.

Marketers allocated 8.9% to digital ads such as video and display. Adding the amount spent on search advertising, the total for digital paid media accounts for
almost 16% of overall marketing budgets.

CMOs remain positive when it comes to digital ads, with 78% saying they are confident they will increase investments in 2020.

Some 37% of CMOs
expect to increase investments in digital ads to keep their marketing strategy on track. Investments in social marketing come in at 38%.

This confidence is partly fueled by a belief in the
efficacy of digital ads, but it becomes a challengeswhen CMOs lack the data required to effectively target audiences.

Just less than 7% of total marketing budgets are invested in search
advertising, but adding the amount allocated to search engine optimization, both account for more than 13% of the total budget.



Spending on paid media reached 26% of the marketing budget as
CMOs spent more on digital channels. Organic media on social platforms like Facebook fell to zero and the promise of influencer marketing often holds more advantages for the influencer, rather than
the brand.

Marketing expense budgets in North America and the U.K. fell to 10.5% of company revenue, down from 11.2% just one year prior. Yet CMOs remain upbeat that their budgets will rebound
heading into 2020.

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Brands are spending more on marketing technology — about 26% more. The amount is slightly down from 2018 at 29%, but up from 22% in 2017.

Despite the increase in
martech, spending with marketing agencies still accounts for 22% of the total marketing budget.

The trend toward in-housing impacts the volume — rather than the value — of work that is
outsourced, reflecting the change, according to Gartner.

Investments in martech investment are slightly ahead of media investments, which climbed from 23% of the total budget in 2018 to 26% in

During the past few year, Gartner’s Magic Quadrant for Global Marketing Agencies has consistently reported a shift in focus for major agencies.

Lower margins and
commoditized services have given way to higher-margin, longer-term strategic engagements, such as digital transformation, strategy or technology projects.

Gartner has been calling out future
budgetary challenges for some time that go deeper than the broad macroeconomic outlook, such as the impact of trade disputes and tariffs or the impact of Brexit. This reflects the confidence CEOs have
in marketing, with just 56% saying they expect to increase investments across the board this year.

While budgets declined in 2018, less than half of CMOs in B2B manufacturing companies expect
to increase budgets in 2020. Optimism remains higher for other B2B and B2C respondents.

High-tech, for example, reported the third-highest average marketing budget in 2019, at 10.8% — and is
the least confident about prospects in 2020, with only 31% expecting a budgetary increase next year. CMOs in travel and hospitality and consumer products are the most confident — with 76% and 74%,
respectively, expecting an increase in 2020.

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Customer spend at 32%, prior-year marketing performance at 30%, and budgetary strategy within a company at 27% are the top three indicators that
CMOs use to track the business and economic climate.

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