Stat attack

The future is here: Marketing really will spend more on tech than IT in 2017

8th Nov 2016

In keeping with its impressively prescient prediction from 2013, Gartner says marketing department spending on technology could indeed exceed the IT department in 2017.

Speaking to 377 marketers at companies with more than $250 million in annual revenue in North America and the UK, Gartner’s "2016-2017 Chief Marketing Officer (CMO) Spend Survey" found that the majority of marketing budgets were set to increase for a third consecutive year.

The survey showed that marketing budgets increased to 12% of company revenue in 2016, from 11% in 2015. 57% of marketing leaders surveyed expected their budgets to increase further in 2017.

Spending is expected to be predominantly focused in three areas based on 2016’s budgets. Web, digital advertising and digital commerce are the key drivers – with those surveyed stating they now spend at least 8% of the budget on digital commerce.

"Marketing is now responsible for critical customer-facing, revenue-generating systems and applications," said Jake Sorofman, research vice president at Gartner. "As the marketing leaders' mandate broadens, we are seeing the CMOs' marketing tech spending approach the levels of the CIOs' technology spend.

"Digital commerce matters to marketers on multiple levels, from driving incremental revenue, to measuring attributable performance, to gaining customer insight through direct engagement.

"In addition, we're seeing marketing leaders look beyond traditional storefronts and shopping carts, investing in rich commerce experiences, experimenting with the Internet of Things and treating digital commerce as a multichannel strategy."

Despite the rise to prominence of adblocking tools, marketers expect a return on digital advertising in 2017, with 65% of those surveyed stating that they plan to increase their spending in this area. The increase is attributed to the following:

  • A continual shift of offline media spend to digital.
  • A decline in organic social media success being replaced by paid social.
  • Increasing importance of the more expensive format, video.

"Over the last several years, we've witnessed an expansion of the CMO mandate, from what was largely a promotional role to what is now often seen as the growth engine for the business," said Sorofman.

"This year's survey really drives this point home as CMOs are taking on more formal responsibility. In more than 30% of organisations, at least some aspects of sales, IT and customer experience now report into the CMO."

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