Marketers lean into AI to counter flat budgets

Gartner’s latest CMO Spend Survey paints a bleak picture: marketing budgets are holding steady at 7.7% of company revenue, but headcounts are not. As nearly 60% of CMOs say they lack the funds to execute their strategies, many are cutting roles and doubling down on generative AI to do more with less. A striking 40% are using AI to automate creative and operational tasks, while 37% lean on AI agents for smarter ad spend. Only 1% of CMOs say AI isn’t a priority—so that one person may want to lay low at the next company offsite.

The shift is being driven more by economic necessity than tech enthusiasm. Labor cuts are top of mind for 39% of surveyed CMOs, and agency relationships are also on the chopping block, with 22% saying AI makes them less reliant on external partners. But Gartner’s Ewan McIntyre warns against viewing AI solely as a cost-saving tool, cautioning that overzealous downsizing could backfire. Nonetheless, CEOs are pushing hard for AI adoption, seeking visible returns on investment in both productivity and P&L statements.

Interestingly, while mar tech spending is under scrutiny, ad budgets are actually getting some love. CMOs are allocating 2.4% of revenue to ad spend—up from 2.1% last year—signaling a desire to maintain brand visibility amid tightening wallets. Meanwhile, the pressure from tariffs and inflation is only starting to bite, suggesting the 2025 budget picture may get even stormier. Data suggests that agencies are adopting AI even more quickly than the brand side, with more focus on productivity and innovation than cost savings, which feels like a more holistic approach.

Read more at AdExchanger.