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AI Adoption Grows as CMOs Face Stagnant Budgets and Job Cuts, Says Gartner
Marketing budgets remain flat as CMOs cut costs and boost AI use to automate tasks and optimize ad spend. Ad budgets rise slightly, while marketing tech faces cuts.
AI Is Changing Marketing Jobs as CMO Budgets Hold Steady
Marketing budgets are flat this year, according to Gartner’s latest CMO Spend Survey. Brand marketing will average 7.7% of company revenue in 2025, the same as last year. More than half of CMOs say their budgets aren’t enough to execute their strategies, leading them to look for efficiency wherever possible.
This pressure is causing CMOs to reduce headcount, cut back agency partnerships, and limit investments in marketing technology. At the same time, many are ramping up the use of generative AI and machine learning to fill gaps and improve results.
AI Cutting Labor Costs
Among 402 marketing executives surveyed, 39% aim to reduce labor costs by doing more with fewer resources. AI is a key tool in achieving this. Forty percent of CMOs use AI to automate creative work and ad operations, while 37% rely on AI-driven bidding algorithms to optimize ad spend. Only 1% said AI isn’t a priority.
Some 22% say generative AI reduces their dependence on agencies for creative and strategy. This shift indicates AI is replacing some marketing roles, though Gartner experts caution against viewing AI purely as a cost-cutting tool.
“AI improves productivity but shouldn't lead to wholesale workforce cuts,” says Ewan McIntyre, Gartner’s Chief of Research for Marketers. Still, CEOs are pushing for operational transformations that lower costs, and AI fits into that agenda. The increased use of AI means fewer people may be needed for certain tasks.
Marketing Tech Cuts, But Ad Spend Protected
Thirty-three percent of CMOs plan to shift resources from low-ROI to high-ROI activities, often meaning cutting mar tech that doesn’t clearly impact the bottom line. Unlike previous downturns where tech budgets rose at the expense of ad spend, this year ad budgets are slightly up — from 2.1% to 2.4% of revenue.
Given the median respondent's revenue of about $6 billion, that 0.3% increase represents millions of dollars. CMOs are protecting ad spend to maintain brand presence, even while scrutinizing their tech stacks for bloat and redundancy.
Still, marketing leaders remain invested in technology for efficiency gains. Forty-one percent say optimizing campaigns with data, analytics, and measurement is a top productivity strategy.
Flat Budgets Despite Tariff Concerns
While tariffs were expected to impact budgets, the survey data mostly reflects budget plans made before the full scope of tariff changes was announced. This suggests other factors contribute to budget stagnation.
Marketing costs are rising due to inflation, higher CPMs, and increased targeting and measurement fees. The uncertainty around tariffs and supply chain issues will likely put more downward pressure on 2025 marketing budgets going forward.
Some sectors, like CPG, manufacturing, and pharma, actually increased their marketing budgets from 6.7% to 9.7% of revenue, expecting strong consumer confidence. However, consumer confidence is now declining, raising questions about maintaining those spending levels.
What Marketers Should Focus On
- Use AI to automate repetitive tasks and improve ad spend efficiency.
- Prioritize marketing initiatives with clear ROI and cut low-impact technology.
- Protect ad budgets to keep brand visibility strong amid economic uncertainty.
- Stay flexible and monitor supply chain and geopolitical risks that could affect budgets.
- Invest in data and analytics to continuously optimize campaigns.
For marketers looking to sharpen their AI skills and adapt to these changes, exploring targeted AI courses can provide practical knowledge on automation, creative AI tools, and data-driven marketing strategies. Check out Complete AI Training's latest AI courses for up-to-date resources.