Martech: Big opportunity or great challenge for CMOs
In recent years, what we do as marketers to attract customers, retain them and pick them up has changed almost beyond recognition. Nothing stays the same anymore. Driven by technological developments and advancements, marketers are facing change in their disciplines. Strategies, skills, and tools that were state-of-the-art some time ago are becoming increasingly obsolete, and new approaches are emerging every day. In this context, martech (Marketing Technology) is seen as a big driver. Investments are being made for all they’re worth. At the same time, however, martech also represents a major challenge.
Technology alone is not enough to meet the constantly growing demands on marketing. Both the role of marketing within a company and the working methods in marketing itself must change. In addition, a drastic skill shift is necessary and, last but not least, the relationship with the business must be improved. So the real challenges in marketing transformation are not just about adapting technology. They are more complex.
Technology in focus
If you take a closer look at Gartner’s CMO Spend Surveys, you will see that investments in marketing technologies have steadily increased in recent years. Although overall marketing budgets have stagnated or even declined, absolute investments in marketing technologies have continued to rise. The average share of investments in marketing technologies was nearly one-third of the average CMO budget in 2021. Quite a lot.
The survey of more than 350 global marketing leaders reveals that martech will once again benefit from the largest share of marketing budgets allocated to resources, at 26.6%. This share is about on par with the 26.2% allocated to martech in 2020, but significantly higher than the 22% it was allocated back in 2017.
Incidentally, the picture in Switzerland is similar🇨🇭: We conducted a small survey for internal purposes, and in it well over half of the marketing managers from Swiss companies surveyed stated that the use of software in marketing will continue to increase sharply in the next few years.
Furthermore, around a third of respondents also state that their main focus in the development of marketing will be on the topics of marketing analytics, automation in marketing, and targeting and personalization. And the same picture can be seen in the recently published Marketing Automation Report 2022 from the ZHAW. So martech is a top priority.
But marketing is not just about technology. While CMOs need to ensure that the technologies and tools they use are understood and can be used in a meaningful way, the range of challenges in today’s marketing departments is much broader than technology alone. It’s about optimizing the use of marketing budgets and spend, making the interaction between marketing teams and stakeholders as efficient as possible, and most importantly, improving marketing performance as a whole.
Are marketers relying too heavily on technology and tools at the expense of essential fundamentals?
This is undoubtedly the case in some companies. But it’s also clear that many marketing departments have some catching up to do. Data-driven marketing is a nice buzzword, but in terms of building analytics and martech capabilities, Swiss companies are not exactly the pioneers. Here, the need for development in marketing is simply the greatest and the corresponding skills are not easy to obtain on the labor market. Higher investments are a possible consequence of this.
Technology is no substitute for strategy
Technologies have therefore become indispensable for marketing. This can be seen not least in the well-known Marketing Technology Landscape. Thousands of tools and solutions are available to us marketeers. The number of solutions in this area has risen to several thousand in recent years. Among other things, this has also led to marketing departments expanding their tool stack to an average of more than 20 tools. This is not a healthy development, and the danger of falling prey to the “new-tech hype” seems great.
Associated with this: The complexity inevitably increases, and the frustration on the marketers side rises. Especially if the corresponding skills are not available in-house. Most marketers today complain that the tools they use do not meet their expectations or even slow down the desired marketing development.
According to another study by Gartner, only 3% of marketers believe they are taking full advantage of martech benefits. But also that a strategy and dedicated skill building would help make the most of, and with, the martech stack. After all, a bloated martech stack is often also symptomatic of a deeper problem: technology is being used as a substitute for strategy.
To avoid this mistake, marketers should clearly define and focus on two things in particular:
- Clear goals in and for marketing, as well as…
- …a strategy aligned with them
According to Gartner, successful companies should align their martech investments with the company’s goals, and keep a healthy balance between the use of internal and external resources. This is the only way to ensure long-term competitiveness:
Successful brands align martech investments to business goals and balance their use of internal talent and external services to remain competitive.
I would add here: Requirements for the specific business need are also highly important. Marketeers often choose to buy the most recommended tools instead of conducting a thorough review and identifying the tools that are aligned with their specific business requirements. As a result, they don’t find out if a technology tool is really appropriate until after the purchase, and valuable resources are wasted. There are enough papers and experiences on how to implement technology in marketing.
Before a company invests in martech, a marketing strategy should be in place. This is especially important to ensure that the added value of a martech stack really comes to bear. The tools to be used should be derived from the strategy, not the other way around. Technology can help to implement a strategy, but it can never replace it.
Opportunity and challenge at the same time
It is therefore no exaggeration to describe the establishment and further development of martech competencies as important key factors for better results in marketing. The advantages of the targeted use of technology in marketing are obvious. Far more than “just” the simplification of marketing processes is made possible. For example, technologies can be used to make predictions about buying behavior, target groups can be approached in a much more specific and targeted manner, engagement with content elements can be better measured, and last but not least, overall performance can be increased. Consequently. Investments in analytics and martech capabilities, and in technologies in general, will continue to increase. But as said, a clear strategy is needed and building a martech stack should be thoughtfully and carefully evaluated. Alignment of the marketing strategy and the technology roadmap, based on business and marketing goals and aligned with the respective requirements of specific business needs, is paramount.
As noted at the outset, the real challenges in marketing transformation are not just about adapting technology. They are more complex. Opportunity and challenge at the same time! And as Henry Ford said: “He who always does what he can already do, always remains what he already is.”