- CMOs are working with flat budgets in 2025, making up 7.7% of overall company revenue, according to a new report from Gartner. The 7.7% metric remains the same as last year.
- The annual Gartner 2025 CMO Spend Survey report revealed that 59 percent of CMOs report they have insufficient budget to execute their strategy in 2025, down by five percentage points since 2024.
- Paid media continues to dominate marketing spend, making up 30.6% of marketing budgets or 2.4% of company revenue. But inflation in media price translates into brands getting less for every dollar spent.
As budgets stay flat, two things are happening. CMOs are cutting back on their agencies and are looking for more efficient ways to deliver ROI including using more AI tools.
“While marketing budgets have stabilized, marketing spending has stalled at a level that falls short for many CMOs,” said Ewan McIntyre, vice president analyst and chief of research in Gartner Marketing Practice, in a post on the research. “Given the looming macroeconomic uncertainties, CMOs are now confronting the prospect of in-year budget cuts.”
With flat budgets, CMOs are embracing productivity tools like leveraging data and analytics to optimize performance. Almost half of CMOs said they are investing in GenAI tools to improve time efficiency and 40% are investing in AI for cost efficiency. Only 1% of the CMOs surveyed said GenAI investments are not currently a priority.
“With limited funds, marketing leaders are boosting productivity in order to drive growth,” McIntyre continued. “CMOs are leveraging data analytics and technology, particularly AI, in order to squeeze more from static budgets.”
As CMOs are relying more on AI tools, many are cutting down on their agency spend. Recent agency layoffs at Publicis and WPP for example, speak to this trend. Gartner found that 39 percent of CMOs plan to cut back on agency budgets, renegotiate contracts and scope and streamline agency rosters. Notably, 22 percent of CMOs said GenAI is making them less reliant on external agencies for creativity and strategy building.
Additionally, 39% of CMOs will cut spending on their marketing teams in order to save money.
The research, conducted in February and March 2025, includes feedback from 402 CMOs and other marketing leaders in North America, the United Kingdom and Europe across different industries. The majority of respondents work for companies with an annual revenue of more than $1 billion.
