Consistently high spending on marketing technology over the past few years is now a key risk to the budgets and credibility of chief marketing officers.
According to Gartner’s 2022 CMO Spend Survey, B2B organizations devote approximately one-quarter of their marketing budget to technology. Yet B2B marketers used less of their martech stack in 2022 than in previous years.
Gartner’s latest Marketing and Communications Technology survey revealed that B2B marketers are using just 43% of the breadth of capabilities available in their overall stack, compared to nearly 60% just two years prior.
At that rate, for a business with $1 billion in revenue, unused martech could be eating up nearly $13 million in expense each year.
Some teams may feel that an “all in” bet on an “integrated suite” mega vendor will provide all that is needed. A staggering 60% of survey respondents say they prefer an integrated suite approach to selecting technology, while only 25% say they prefer a “best-of-breed” approach. Although the marketing suite offerings promise simplicity, low levels of marketing technology utilization and critical technology gaps identified in the survey reinforce the need to build a capability-first, rather than a technology- first, approach.
To thrive in such an environment will require CMOs to regularly scrutinize their marketing technology investments and monitor their progress in improving utilization. They will also need to combine that investment discipline with the appetite for growth, and four key trends will dominate that growth story: shifting organizational models, talent gaps, cross-functional challenges and a bevy of new technologies to navigate the cookieless future.
Trend #1: Increased visibility for martech invites greater scrutiny
CMOs are evolving their martech teams through increased centralization to create more efficient, scalable, flexible and resilient marketing organizations. Centralized internal operating models such as centers of excellence (COEs), internal agencies and shared services are the most popular structures for deliver- ing martech capabilities, according to Gartner research.
In addition, marketing’s influence on enterprise-wide digital transformation and innovation has increased markedly in the past year due to factors such as increased focus on digital commerce and a chance in C-suite prioritization of brand and stakeholders.
Although this shift represents a great opportunity for martech teams to impact business and customer goals, it also introduces new challenges. For instance, heightened expectations from the C-suite increase the pressures for CMOs to effectively address pervasive problems like martech skills gaps and under- utilization of their stack. An inability to solve these challenges and meet C-suite expectations will undermine marketing’s credibility as a strategic business function.
Trend #2: Skills gaps raise concern as marketing’s tech ownership rises
Skills and support are falling short, with an average of 64% of martech leaders agreeing that their team lacks technical skills to integrate and operate their martech stack and receives insufficient support to increase usage of their martech stack. This sentiment is consistent with findings from the 2022 Gartner CMO Spend survey in which marketing leaders cited martech as one of the top capability gap areas.
Simultaneously, marketing has taken the lead in ownership of martech activities, traditionally under IT’s remit, such as integration of disparate martech systems and customer databases. Again, this is both an opportunity and a challenge for marketers: They may be able to move faster on martech initiatives, but can no longer blame other departments if they are unable to attract and manage the requisite technical talent needed to succeed. It’s essential that increased ownership of technical martech activities is accompanied by appropriate skills acquisition within the marketing team as well as aligned delivery models with the IT department.
Trend #3: CMOs prepare for a cookieless future with new adtech and commerce technologies
The risk of an integrated suite approach extends beyond contract lock-in. Uncertainty, driven by privacy and identity developments, also compels CMOs to invest in viable strategies that leverage emerging channels.
The aforementioned Marketing and Communication Technology survey also revealed that many of the tools to support innovative marketing channels are gaining steam, such as podcast advertising, social commerce and streaming/connected TV (CTV) advertising. Meanwhile, those that support metaverse initiatives and non- fungible tokens (NFTs) are certainly on CMOs’ radars, but are generating more nascent support.
Yet no amount of vendor white papers or case studies can perfectly predict how your team or customers will respond to new campaigns and touchpoints. Look for opportunities for internal ownership of these new audio, video and social technologies rather than deferring to an agency. Such an approach can both validate the fit of technologies and vendors from outside the integrated suites, and improve agility through internal capabilities.
Trend #4: Success of the IT-marketing partnership remains critical
CMOs who cannot effectively partner with their IT and data and analytics counterparts will fail to build necessary capabilities, such as omnichannel journey orchestration and personalization, needed to deliver on customer experience goals. While marketing and IT are two functions that contribute the most to funding investments for martech, the strength of that partnership can make a significant difference.
Shared responsibility for funding investments is the ultimate indication that senior leaders are working together to support big-ticket martech platforms. When executed well, this correlates with greater-than-average martech utilization rates. Companies that report collabora- tive funding (i.e., marketing + IT/ technology + other functions as primary contributors) to martech investments report slightly higher current utilization rates (46%) than the overall survey average (42%).
It’s critical that CMOs partner with the CIO, CTO and other technology leaders to develop a shared and tech-agnostic map of the business capabilities that will enable the business to fulfill its CX or growth vision.
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