Follow the money: CMO budgets for martech and marketing operations

As with crime and politics, if you want to reveal the real plot in marketing’s evolution, follow where the money is going. Hmm. That’s probably not the most flattering of metaphors. Okay, scratch that image.

But it is why I always look forward to Gartner’s annual CMO Spend Survey report. Allocation of budget is a CMO’s way of “voting with their wallet” for what they think is most important. Grab a copy of The State of Marketing Budgets 2021 and the accompanying deep-dive into The Role of Marketing in Digital Transformation & Innovation to puruse for yourself.

I’ll skip over the most common headline from this year’s report — that as a percentage of their firm’s revenue, marketing budgets dropped precipitously from 11% to 6.4%. Yowzers. You can pretty much sum it up with a Tom Fishburne cartoon:

It’s worth noting that as a percentage of that budget, “martech” (in the broadest sense of the word) remains the largest category at 26.6%, followed closely by paid media (25.1%) and labor (25%). Nonetheless, given the amount by which overall marketing budgets shrunk, money for martech was certainly squeezed this year too. Probably good to tighten up discipline there.

(I find myself humming, “Money for martech and clicks for free” to an old Dire Straits tune.)

But the most interesting findings to me were the chart at the top of this post and the one below. The first shows marketing operations as the #2 largest program/operational area where 2021 marketing budgets have been allocated — on average 11.9% of the budget. Closely related, marketing analytics was ranked #4 with 11% mean budget allocation.

That’s good affirmation that marketing operations is a major pillar of marketing now.

But even more interesting, the Digital Transformation & Innovation deep-dive reported that 72% of marketers were increasing investment in “marketing innovation” this year. Makes a ton of sense in the current environment that has required rapid adaptation — as well as preparing for “the next normal” we’re barreling headlong into.

But where specifically is marketing innovation investment being directed?

First and foremost, innovative marketing strategy (48%).

But #2 and #3? Marketing processes and ways of working (44%) and technology acquisition and utilization (38%). In other words, marketing operations and martech.

Innovating “marketing processes and ways of working” is particularly exciting to me. Because in general, I’ve seen the bottleneck to getting the most value out of martech investments isn’t the technology itself — it’s the organizational capital that needs to get built around these new capabilities.

Just a little more evidence that, indeed, ops is sexy these days.