CMO Budgets Flat in 2025, AI Impacts Agencies
Chief Marketing Officers (CMOs) predict flat budgets in 2025, holding steady at 7.7% of total company revenue, according to a recent Gartner survey. While marketing spending remains static, CMOs are focusing on efficiency gains through tools like generative AI.
AI Adoption Drives Efficiency, Impacts Agencies
Despite flat budgets, CMO confidence is slightly improved, with fewer CMOs reporting insufficient funds compared to 2024. However, macroeconomic uncertainty could still lead to mid-year budget cuts.
“Given the looming macroeconomic uncertainties, CMOs are now confronting the prospect of in-year budget cuts,” said Ewan McIntyre, VP Analyst and Chief of Research for Gartner's marketing practice.
Generative AI is a key driver of increased efficiency. Nearly half of CMOs report improved time efficiency, while 40% cite cost reductions. Increased content production and handling other business areas are also noted benefits.
This increased reliance on AI could negatively impact marketing agencies. Over 20% of CMOs believe generative AI reduces their need for external creative and strategy partners. Consequently, 39% of CMOs plan to cut agency budgets, either by ending unproductive relationships, streamlining rosters, or renegotiating contracts. A similar percentage plan to reduce labor costs.
Paid Media Remains Top Spending Priority
Paid media continues to dominate CMO spending, accounting for over 30% of budgets. However, the increasing use of AI and the drive for efficiency are leading many CMOs to re-evaluate their agency and staffing needs.
The Gartner CMO Spend Report surveyed 402 CMOs and marketing decision-makers across North America, the U.K., and Europe between February and March.
