Marketing Budgets: From 11% to 7.7% — the Era of Less
Gartner’s annual spend survey of four hundred marketing leaders named the period itself: “the era of less.” Marketing budgets that averaged 11 percent of company revenue in the four pre-pandemic years fell to 8.2 percent after, then flatlined at 7.7 for two consecutive readings. The average softens the picture: half of the leaders work with budgets under 6 percent, and 59 percent say what they have cannot execute their strategy. The cut lines are itemised too: average allocations to agencies, talent and technology are shrinking together.
This table is the real ground of the “agency or in-house” question. It is not an organisational ideology debate but a shrunken budget’s efficiency arithmetic — and the penalty for a bad division of labour is many times heavier in scarcity than in plenty: abundance hides mistakes; scarcity invoices them.
What the Number Says
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- The drop began as weather and settled as climate
- The cuts land exactly on the question’s two options
- Productivity moved from wish to method
The 7.7 percent reads in three layers.
The drop began as weather and settled as climate
The crash from 11 to 6.4 percent was one crisis year’s work; but the recovery never returned to the old band and has now flatlined for two years. A flatline signals a new normal, not a temporary belt-tightening: managements saw marketing done with less and pinned the bar there. Waiting for the old budget back is not a strategy; building efficiency at the new bar is.
The cuts land exactly on the question’s two options
The survey’s line items point straight at this set’s subject: leaders protect paid media while trimming agency, talent and technology allocations together — the money that goes outside and the money that builds inside shrink at once. This double squeeze traps the company that postpones its division-of-labour decision from both ends: fewer hours bought outside, no capability built inside. Indecision’s cost is both options working badly.
Productivity moved from wish to method
The same survey records leaders’ top two productivity moves: pruning performance with data and analytics, and automating repeat work with AI — with those calling AI investment “not a priority” down to 1 percent. The era of less answers not with harder work but with restructured work — and the division-of-labour ruler is that restructuring’s first page.
What the Headline Misses
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- Where it goes separates more than how much
- For a small business the lesson is the ordering, not the ratio
- The agency line shrinks while the agency need doesn’t
The headline narrates the cut; the guidance sits in three details.
Where it goes separates more than how much
Two different companies live inside the same 7.7 percent: one sprinkles the budget across lines that produce no decisions, the other deepens in a few. Read the “insufficient budget” complaint beside the productivity moves and the lesson emerges: the cure for the feeling of insufficiency is rarely more budget — it is the existing budget’s division of labour: who does what, at what cost, leaving what behind?
For a small business the lesson is the ordering, not the ratio
The survey samples giants; 7.7 percent is no SME target. What transfers is the allocation lesson, not the number: in a lean budget the first line protected is whatever accrues — work that builds titled assets; the first line cut is whatever evaporates without trace. External partner and internal team get measured by the same ruler: which one leaves permanence, in which line?
The agency line shrinks while the agency need doesn’t
The subtlety in the itemisation: what gets cut is the price of agency hours, not the problem agencies solve — the expertise need is growing in the opposite direction, alongside the talent shortage. This scissors reprices the whole relationship: the agency selling hours is the cut’s target; the agency building capability is the cut’s instrument. One budget line, two fates — decided by what is actually delivered.
What a Business Should Do
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- Read the budget by permanence, not by line item
- Write the division of labour in budget language
- Ask your partners the permanence question
The number’s decision translation is three steps.
Read the budget by permanence, not by line item
Marketing spend splits into two columns: accruing (content assets, registered relationships, built capability, learned arrangements) and evaporating (spend that leaves nothing when it stops). The era of less has one first rule: cuts start in the evaporating column and reach the accruing one last — reverse the order and a lean budget also cuts off the future.
Write the division of labour in budget language
Three figures per marketing job: the full internal cost (salary + tools + management + learning time), the external cost, and the permanence the work leaves. The ruler is drawn with these three figures — never with feelings. Most businesses meet two surprises in this arithmetic: the inside dearer than assumed, the outside — where a handover exists — more instructive than assumed.
Ask your partners the permanence question
One question joins every period review with the external partner: what did you leave us this period — which arrangement, which document, which learned job? The partner with an answer is the cut era’s winner; with the one without, the relationship gets rebuilt on the selection test’s questions.
The survey itself is in Gartner’s announcement.
A rich budget hides a bad division of labour for years; 7.7 percent hides nothing — the era of less belongs to whoever holds the ruler.