Organisations are now spending a greater proportion of marketing budgets than ever before on marketing technology. Martech spending now makes up 30% of the average marketing budget, up from 24% in 2022.
This statistic, from our new State of Martech & Marketing Operations 2023 report, underlines the importance of martech to overall marketing strategy, and to delivering customer experiences across digital channels.
It also reflects the economic conditions of the last couple of years. The last 12 months or more have been challenging for CMOs, with many experiencing greater pressure than before on budgets, while many have been forced to reduce headcount.
For this reason, we've also seen the share of budgets spent on labour costs reduce significantly, from 35% in 2022 to 28% this year.
It's expert a trend many of the expert contributors to this report have also noticed. While companies have some flexibility around headcount, they can’t always easily change multi-year martech licences. Meanwhile, some organisations rely on technology to deliver long-term efficiency savings and to achieve marketing goals.
With many of our respondents needing marketers with expertise around martech strategy, and a majority of CMOs planning to increase the size of their marketing operations teams in the next 12 months, many organisations are still looking to recruit talented marketers.
Martech budgets look set to grow further, with 83% of CMOs expecting their martech budgets to grow over the next 12 months.
Though martech budgets are set to grow, there are still a number of issues holding back martech investment. These include challenges around vendor selection, as well as skills shortages and a lack of understanding of technology.
For more insights into martech budgets and more, download LXA's State of Martech & Marketing Operations 2023 report.