CMOs  today lean on AI to navigate budget freeze as agencies brace for cuts while trying to manage tighter budgets in 2025, according to a new report from Gartner. The study reveals that chief marketing officers (CMOs) expect little to no growth in their budgets, which remain fixed at 7.7% of company revenue for a second consecutive year.

While spending is flat, CMOs  are expressing towards budget cuts. Also, many CMOs are finding new ways to optimize performance by integrating AI-driven efficiencies. Paid media continues to dominate spending priorities, accounting for over 30% of marketing budgets. However, there’s a noticeable shift away from traditional agency reliance. The report shows that 22% of CMOs say generative AI has reduced their need for external creative and strategy support.

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As a result of  budget cuts, 39% of marketing executives plan to scale down agency spending through roster cuts, contract renegotiations, or discontinuing underperforming partnerships. Labor costs are also on the chopping block, with another 39% aiming to cut back through role consolidation or staff reductions.

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Despite concerns on  budget cuts, there are signs of cautious optimism. The number of CMOs who feel underfunded dropped to 59%, a slight improvement from the previous year. Still, economic volatility and possible trade disruptions could shift the outlook quickly.

Gartner’s findings are based on a survey of over 400 CMOs and marketing decision-makers across North America and Europe, conducted between February and March 2025.

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