Marketing’s New Reality: Budgets Are Stuck, But GenAI Is Everyone’s Frontier

Marketing’s New Reality: Budgets Are Stuck, But GenAI Is Everyone’s Frontier

If you’re in marketing, you’ve probably noticed something odd: for more than three years, chief marketing officers (CMOs) have been operating under the same budget constraints. According to Gartner, marketing budgets have stabilized at about 7.7% of company revenue—that’s not down, but it’s certainly not getting any more generous.

So what do you do when you can’t spend more? Well, you work smarter. And for almost every CMO, that means embracing generative AI. In fact, 99% of marketing leaders say GenAI is a top priority. Only 1% said otherwise.

What CMOs Are Actually Doing

Marketing has gotten harder. Key issues:

• Campaign performance struggles—87% of CMOs say they’ve had problems in the past year.

• Nearly half (45%) have had to kill campaigns midstream due to poor outcomes.

But leaders aren’t just complaining. The top CMOs are doubling down on productivity, efficiency, and leveraging AI & data in bold ways:

• Data, analytics, measurement are now their go-to levers. 41% of top performers use those tools to optimize every part of the funnel.

• Automation + AI for key tasks is nearly as widespread—about 40% of top CMOs are using these technologies to streamline operations.

• There’s also a big push to restructure tech stacks so everything “talks” to each other. Less fire-hose, more connected systems.

Reallocating, Cutting, and Focusing

Since budgets aren’t rising, companies are adjusting where money goes:

• Agency spend and labor costs are being pared back. CMOs are trimming unproductive agencies, simplifying roles, and cutting overlap.

• Some are using GenAI to reduce dependency on external creativity and strategy providers. The internal team becomes more capable.

• Resources are shifting massively toward high ROI efforts, i.e. measurement, automation, performance-driven spend instead of just “doing more stuff.”

  
  

What This Means Going Forward

Here’s the rub: budget flatness isn’t going away—at least not anytime soon. But if you’re a CMO, or part of a marketing team, that doesn’t have to suck. You can adapt. The winners in this era will be those who:

• Obsess over data, not just in dashboards, but in decisions.

• Automate first, ask “who do we need?” second.

• Cut ruthlessly, scrapping what doesn’t work and doubling down on what does.

The productivity revolution isn’t coming—it’s already here. If you lean into GenAI, measurement, and smarter automation, you won’t just survive the era of flat budgets—you’ll find ways to win anyway.

Source: https://www.saastr.com/cmo-budgets-are-flat-for-3-years-but-99-of-cmos-say-gen-ai-is-a-top-priority/