How long the economic impact of Covid-19 will last has chief marketing officers at odds with the rest of their C-Suite. In April, one survey found that 72% of CFOs expected the pandemic to have a significant impact on their businesses; however, CMOs are much more bullish about the economy and how the pandemic will impact it.
In fact, according to a recent survey of CMOs by Gartner, 73% of the 432 marketing executives polled expect the pandemic’s negative impact to be short-lived, indicating an extremely positive outlook for business performance in the next 18 to 24 months.
Based on the insights gleaned from the two-part survey, Gartner analysts are advising CMOs to toss their rose-colored lenses for some more practical specs.
“Marketers are significantly out of step with other members of the C-suite,” said Ewan McIntyre, vice president analyst for Gartner for Marketers, in a statement.
Indeed, though more than 44% of the CMOs surveyed experienced mid-year budget cuts as a result of the pandemic, 68% expect to increase their investments in marketing tech over the next 12 months. Of that spending, 74% plan to focus on digital advertising, and 66% on paid search.
“CMOs should plan for future budgetary pressures now, rather than gamble on budgets bouncing back,” McIntyre suggested. “As we progress into the ‘recover’ and ‘renew’ phases of this pandemic, CFOs will turn their attention to profitability, and marketing has the dubious honor of topping the list of functions where finance will look to trim expenses even further.”
McIntyre told Adweek that he has been surprised by the positivity CMOs have shown over the past couple of years, not just in 2020 but during times of exceptional political tension and social turmoil. Gartner’s yearly CMO spend reports look at how much companies spend on marketing, how those budgets align with strategic priorities, how they will change in the following year and why.
McIntyre pointed to 2019’s survey results, which asked most of the same questions as the 2020 version (save for current issues), when many of the CMOs surveyed from North America, the U.K., France and Germany had expected business to be much more positive in 2020 in spite of challenges related to Brexit and trade disputes.
“I expected that hopefulness to be degraded because of the impact of Covid-19 when this survey went out into the field, but nope,” McIntyre said. “What I’m getting from these results is that there’s not really been an understanding of the scale of the challenges that lie ahead.”
Of course, McIntyre noted, there are opportunities in a crisis as well, which may account for some of the positivity. CPG brands are likely seeing upticks in sales for shelf-stable food, toilet paper and diapers, which could be driving a near-term bump in marketing budgets. But, per McIntyre, the reality is that this bump will be short-lived, especially as Covid-19 continues to evolve from a health crisis into an economic one as well.
“The noises that we’re seeing from CFO offices is that they are expecting to make further cuts in 2020 and 2021,” McIntyre added. “I think there is a slight sense of hubris from CMOs here, who are under the impression that this is less consequential than it really will turn out to be.”
McIntyre observed another surprising result from this year’s survey compared to 2019: Despite these unprecedented times, 79% are pursuing conservation growth strategies by relying on existing—and volatile—markets to fuel growth. Marketing technology investments, for example, make up 26% of the participants’ marketing budgets in 2020, even though those CMOs reported using only 58% of their marketing technology stack’s full capabilities, making it an easy target for future cuts if it is underutilized.
Similarly, while 28% of CMOs surveyed have canceled media buys, they remain confident on the outlook for paid media in the next year.