CMOs' Budget Forecast for 2025
Marketing expenses now account for 10.1% of overall company budgets, marking their lowest point in three years, according to the latest CMO Survey. Additionally, marketing expenses as a share of company revenues have dropped to 7.7%, the lowest in the pandemic and post-pandemic era. Despite this, marketing budgets are expected to grow, with CMOs forecasting an 8.6% increase over the next year, signaling renewed optimism for 2025.
One key shift in spending is a rare uptick in traditional advertising budgets, projected to rise by 0.8%—only the fourth time in 21 survey iterations that CMOs have predicted growth in this area. Meanwhile, B2B product companies are leading marketing investments, expecting significant increases in spending on new product introductions (+12%), brand building (+9.5%), and customer experience (+7.8%), all outpacing overall market averages. However, short-term performance marketing continues to dominate brand budgets, accounting for 68.8% of spending, further reinforcing the shift away from long-term brand building.
Marketing teams also face ongoing financial pressures, with company executives often opting to cut marketing expenses rather than focus on revenue growth when profits fall short. CMOs estimate that 46% of the time, leadership reduces marketing budgets rather than exploring revenue expansion strategies. Services companies, particularly in B2B and B2C sectors, are more likely to make these cuts compared to product companies. Additionally, when cost-cutting is prioritized, marketing is the most frequently reduced expense (44.6% of the time), with B2C Services companies being the least likely to see such reductions.
As budget constraints and shifting priorities continue to shape marketing strategies, CMOs must balance short-term performance with long-term brand investments while demonstrating marketing’s value in driving revenue growth. Strategic investments in brand building, CRM, customer experience, and innovation will be critical for maintaining competitive advantage in a cost-conscious environment.
Key Actionable Takeaways:
Prepare for Budget Increases – With an 8.6% rise in marketing budgets expected, plan strategic investments to maximize ROI.
Capitalize on Traditional Advertising's Rebound – Consider testing or reallocating budgets to traditional media as it experiences a rare projected increase.
Leverage Short-Term Performance Marketing – Since 68.8% of branding budgets focus on performance marketing, refine strategies for immediate impact while balancing long-term brand equity.
Prioritize Investment in New Product Marketing – B2B product companies are increasing spending on new product launches—align marketing strategies accordingly.
Strengthen Brand Building Efforts – Despite the dominance of short-term strategies, B2B product firms are increasing brand-building investments—capitalize on this trend.
Optimize Customer Experience Spending – With customer experience investments rising, improve personalization, engagement, and service-driven marketing initiatives.
Advocate for Marketing’s Role in Revenue Growth – Demonstrate how marketing contributes to revenue expansion to counteract tendencies to cut budgets when profits decline.
Monitor Financial Trends Within Your Sector – Understand how budget cuts or increases impact marketing strategies in your specific industry (e.g., B2B vs. B2C, Product vs. Service).
Improve Budget Efficiency – With marketing budgets under scrutiny, focus on high-ROI initiatives, automation, and cost-effective campaign management.
Stay Agile in Marketing Planning – As economic conditions and leadership priorities shift, remain flexible in adjusting budget allocations to maintain growth momentum.
