Marketing budgets are shifting priorities amid economic pressure
Marketing budgets are shrinking, not in absolute terms, but as a percentage of the bigger pie. While CMOs might see their budgets increase on paper, the reality is that marketing’s share of total company budgets has dropped from 13.8% in 2022 to just 10.1% in late 2024. Even more telling, marketing budgets as a percentage of company revenue are at their lowest level in three years, declining to 7.7% this fall.
Why is this happening? Companies under economic pressure often see marketing as an easy cost-cutting target. When executives make budget reductions to boost revenue growth, marketing is hit first—44.6% of the time, to be exact. This trend reveals something important: there’s a persistent perception that marketing doesn’t directly drive value. That perception is wrong.
Marketing is more than a cost center, and must be seen as a value generator. Done right, marketing builds brands, drives loyalty, and opens new markets—things that aren’t always measurable on a quarterly report but are critical for long-term growth. CMOs need to educate their peers in the C-suite on the downstream effects of slashing marketing investment. When the dust settles, the companies that invested in their brand will emerge stronger.
Doing more with less
MarTech (short for marketing technology) is an area where CMOs are looking to trim the fat without cutting muscle. Spending on MarTech as a percentage of total marketing budgets has dipped by 0.9% since Spring 2024. At the same time, MarTech usage is up 1.4%. This suggests a strategic pivot: businesses are doubling down on the tools they already have, squeezing out every ounce of value rather than throwing more money at the problem.
This is smart. A bloated MarTech stack (filled with overlapping tools that aren’t well-integrated) can be more of a burden than a benefit. Through consolidating platforms and focusing on those that deliver the highest ROI, companies save money and simplify operations. For example, many CMOs are swapping out overly complex systems for user-friendly, drag-and-drop platforms that empower their teams to work faster and more independently.
The key here is efficiency. Make sure you have the right tech for your specific goals. MarTech is the engine driving your campaigns, customer insights, and personalization efforts.
“Investing in integration and training is the difference between tools that gather dust and tools that deliver results.”
The ROI gap and why MarTech’s promise falls short
MarTech is underperforming for many companies. While it’s rated as having an above-average impact on business outcomes (4.8 out of 7 on a performance scale), 54.9% of CMOs are disappointed with its ROI—a 6% jump in dissatisfaction since Spring 2024. The issue isn’t the technology itself, but rather how it’s being used.
Here’s what’s happening. Too often, companies buy powerful tools but fail to implement them properly. They skip training or don’t align the tech with their goals, leaving valuable features unused. Even worse, data silos and poor integration mean these tools can’t communicate effectively, limiting their impact. It’s like buying a rocket and then forgetting the fuel.
CMOs can fix this:
- First, align MarTech investments with clear KPIs. Don’t just measure clicks and opens, and focus on outcomes that matter, like conversion rates and customer retention.
- Second, prioritize integration and data quality. Clean, unified data is the lifeblood of MarTech. It enables better personalization, faster insights, and stronger campaigns.
- Finally, invest in your team. MarTech is only as good as the people using it. Training and adoption are critical to bridging the gap between potential and performance.
MarTech has massive potential, but it requires focus and effort to unlock. When used correctly, it can be a powerful force multiplier.
The root of MarTech disappointment
Here’s a sobering fact: 45% of marketing activities aren’t supported by MarTech tools. That’s nearly half of the work being done manually or without the efficiency these platforms can provide. Worse yet, operational utilization of MarTech tools is dropping. Only 50% of MarTech tools are used in operations today, down from 56% just a few months ago. This drop, combined with declining focus on data strategies (falling from 51% to 48%) and reduced experimentation (down from 35.6% to 32.7%), paints a clear picture: companies aren’t using these tools to their full potential.
This looks beyond the software, and focuses on strategy itself—or the lack thereof. When companies neglect to prioritize integration, training, and data-driven decision-making, MarTech can’t deliver. For example, siloed data (where customer insights are scattered across systems) makes it nearly impossible to run personalized, high-impact campaigns.
“Without clear ownership of the tools within the marketing operations (MOps) team, MarTech becomes just another expense, not an asset.”
Marketers need to flip this trend: Start by aligning MarTech tools with your team’s actual workflows. Simplify wherever possible, as less is more when it comes to tools that work together seamlessly. Break down data silos with robust data governance policies, making sure every piece of information collected is accessible and actionable. Finally, bring back experimentation. MarTech thrives on testing and iteration, so encourage your teams to push boundaries and explore new ways to drive results.
Maximizing MarTech ROI, a playbook for success
Let’s cut to the chase: if you want to get more out of your MarTech investments, you need a game plan. Here’s where to start.
- First, rethink your tools. Ask yourself, “Does this platform reduce external dependencies?” For instance, drag-and-drop platforms allow your team to design and deploy campaigns—like social posts, emails, and SMS—without hiring external vendors. This saves time and money while giving you more control. Evaluate each tool for its ability to empower your team and streamline operations.
- Second, focus on data. Marketing lives and dies on the quality of your customer insights. Clean data is easier to process, share, and use across platforms like CRMs (Customer Relationship Management), CDPs (Customer Data Platforms), and data warehouses. Build processes to ensure data is collected cleanly—think website forms, surveys, and in-app prompts that minimize errors and inconsistencies. Establish accessible data governance policies so your entire team knows how to handle and leverage this information.
- Third, invest in your people. MarTech’s real power lies in how your team uses it. Provide ongoing training so your marketers know how to unlock every feature and capability your platforms offer. An undertrained team leaves value on the table, while a skilled team can amplify ROI exponentially.
The big takeaway is that MarTech isn’t magic, it’s just another tool in your arsenal. To unlock its full potential, you need the right strategy, clean data, and a team ready to execute. When you align these elements, you get a return on your investment and you create a system that drives growth, innovation, and long-term value.
Key takeaways for decision-makers
- Marketing budget shifts: Marketing’s share of budgets has dropped to 10.1%, requiring CMOs to better demonstrate long-term value during cost cuts. With marketing’s revenue percentage at a 3-year low, growth risks are rising without clearer alignment to business outcomes.
- MarTech ROI challenges: Increased MarTech usage hasn’t translated to ROI; CMOs must align tools with business goals, improve data quality, and drive adoption. Poor implementation and siloed data limit MarTech’s impact. Leaders should prioritize integration and clean data strategies.
- Maximizing MarTech value: Consolidate MarTech stacks to reduce costs and focus on high-impact tools. Train teams to fully leverage platforms, cutting vendor reliance and boosting ROI.
