Out of one global crisis and into another. Interest rates, times of war, the cost of living crisis, unemployment and the stock market are all pointing toward uncertainty, slower growth and that dreaded R-word in 2023. It seems there is a cultural divide in perspectives too, in the UK, the media is focused heavily on the cost of living crisis and over-taxation, whereas the US media is focused on the stock market, job losses and the rising risk of a recession. Whatever the orientation, the outcome for most CMO’s will be largely the same.
What does this all mean for CMO’s in 2023?
Essentially, CMO’s and marketing departments will have to achieve more with less, they will have to be a little more prudent and ensure that every dollar, especially on martech, is well spent as they face increased scrutiny.
When economic slowdown occurs, no function, with perhaps the exception of training and R&D, feels the chill winds more than Marketing. This is essentially because Marketing is still seen as a business cost in many organisations, and a cost that can be cut when times are hard despite this being a short-termist view. The flawed beauty of marketing is that it is both an art and a science, it is very visible and so everyone within an organisation inevitably has an opinion as to what constitutes worthwhile marketing. Additionally, there are rarely formal rules or standard industry processes such as you see in financial accounting, sales forecasting, product quality or customer service, and so it is much harder to gauge, get right and at the same time assuage all opinions.
Whilst I will always defend Marketing investment as central to every organisation, Marketing as a capability still doesn’t do a great job of showcasing commercial pragmatism, and nowhere is this lack of commercial accountability more acute and exacerbated than in the new world of Marketing Technology (Martech)…
The ‘problem’ with Martech
Let’s get it out in the open, martech spend in most marketing functions is out of control. According to Gartner, there is now more spent on Martech than on Marketing headcount. This is further reinforced by our own research which indicates that 90% of businesses prioritise tech spending over tech resource.
How did this happen, and why?
There are several major dynamics at play here:
- Digital Marketing and Martech used to be on the periphery of the Marketing function, and the SaaS model made acquisition of technology affordable, easy and instant.
This created a short term fix in many cases due to the ease of purchase; many organisations were sold on the demo, bought the software, and then considered the job done. The vendors used their own software very well, creating hype in selling these tools extremely quickly over and over again.
Unfortunately for the CMO, with the martech adoption frenzy in full swing, and vendor mergers and acquisitions happening at lightning speed, not many of the vendors maintained a consistent state from which to support those customers who bought into that original idea. There was a rinse and repeat mentality, with the repeat leading to a mass entanglement of new and poorly implemented tech, and the resulting mass frustration of many marketers, especially at the practitioner level. - The Pandemic drove Marketing towards digital transformation even faster.
When the pandemic began, the mantra for many businesses was ‘go digital or die’, and the situation which presented itself was that Martech no longer sat on the periphery of the Marketing department, and instead became central to every business and every CMO’s thinking.
However, we can’t just blame the martech vendors. Peripheral and tactical acquisitions still continued in the absence of a coherent central strategy. This came as a result of a desire for short term and/or quick fixes, as opposed to operating with a really clear vision in mind. - Finally, CMO’s have been focusing on the wrong thing and listening to the wrong people.
Instead of focusing on the business benefits of martech, of which we believe there are at least 12 to consider, CMO’s and their direct reports have been seduced by the Martech arms race. The Chiefmartech blog, with its 9000+ martech software landscape, is an interesting read, but now it has become positively dangerous. It is the perspective most seen at Martech related events, but it has been misinterpreted by the masses, exactly when did the ‘Martech Landscape’ ever become a template for technology acquisition and strategy? How many CMO’s have ever questioned its’ usefulness or applicability? The short answer is not enough.
In fact the Martech landscape has now become a bibliography of crowd sourced PR opportunism, that is all. A medium from which technology features are self-proclaimed and paraded as solutions, and solutions paraded as platforms. One wonders when the economy gets a little tougher, how many of these technologies will survive? Tools within your hastily built martech stack containing your precious customer insight and data might not be here next year.
It is just not a sustainable strategy.
And it gets worse. What are the two things as an industry we focus on at martech awards ceremonies, regardless of who the sponsor is? Complexity and campaigns.
Let’s look at each one separately, firstly Complexity.
As an industry, we regularly award prizes and kudos for adding complexity and cost to a business (this year there were over 41 entrants to Chiefmartech’s ‘The Stackies’). However, other than to showcase the typical number of martech solutions in situ in an enterprise organization or to highlight the amount of money being invested in marketing technology, it is a largely meaningless and useless method of awarding best practice as it ignore outcomes form either a company or customer perspective. What started out as a fun exercise has grown out of control.
And yet ‘The Stackies’ are the global standard in martech awards. They encourage organisations to showcase their complex martech stacks in PowerPoint. The more complex the better. What is the problem with this?
- Firstly, the world doesn’t operate in PowerPoint, and data doesn’t flow in Microsoft office.
- Secondly, it encourages complexity, and inherent in this is duplication and redundancy, and redundancy is cost. Excessive cost without justification can be a career killer for CMO’s.
Again what most CMO’s lack and yet what they most is a really clear simplified Martech Vision of the future.
Campaigns
So why am I arguing that campaigns are a bad measurement of Martech success? Surely this is what marketing is all about? Performance marketing, filling the funnel, metric driven reporting etc.
Current Success Metrics: Complexity and Campaigns
The problem is that campaigns are only one prism from which to look through as proof of marketing success, and as I said earlier, we think there at least another 11 avenues to consider such as customer insight, better customer experience (CX), compliance/GDPR and so on, all with considerable value and contribution to the business. In most instances awarding campaigns is a measure of the agency & CMOs creativity, it usually has little to do with martech best practice.
An overfocus on campaign success runs the risk of marketing being confused with sales promotion, denigrated to purely tactically driven activities. Surely a wider and more comprehensive Marketing agenda needs to be considered too, one that balances the needs of the company with those of the customer, all the while championing innovation, new ideas and building trust and the brand along the way.
The other limitation is that campaigns tend to be tactical, often running on a quarterly basis, and if the average B2b buying cycle is 9 months, then these campaigns have a one in three chance of timing it well. Or, put it another way, you might overly rush the conversation and building credibility in the getting to know you stage, and can anyone honestly say a sale was attributed to that one campaign, rather than lots of different moments of trust? The answer is usually no.
A better approach would be to make campaigns always-on, continuous from Lead Source to Salesforce, and Sales and Marketing campaigns not limited to a common creative look and feel for that particular quarters campaign theme. I would argue that in terms of measuring martech maturity and success that Agility, Adoption and Integration are much better metrics than any campaign.
Future Success Metrics: Simplicity and Sustainability
So, CMO’s need to replace cost and complexity with two new considerations, Simplicity and Sustainability. Indeed perhaps a more sustainable approach to business is to focus on customer retention and not just customer acquisition.
At its most simplistic level Sustainable Martech is the practice of championing Simplicity and Integration over Complexity and (unnecessary) Cost. It is about doing more with less and based on a really clear vision. We believe that it is much better to have a simple martech spine with a complex integration between platforms than a complex stack with simple integration.
In 2023, we believe there will be 12 core behaviours of a CMO in building their Sustainable Martech Strategy:
- You have a clear and ambitious vision, one that places Digital and the Customer at the heart of everything you do.
- You are as focused on customer retention strategies and technologies as much as you are on net new customer acquisition.
- You consider Organisational Design before your Martech adoption. (Most companies do it the other ways around.)
- You have a really clear view of your core martech landscape, and you look to recycle or reuse martech before looking to acquire new tech or new capability.
- You adopt a ‘Spine over Stack’ approach, focus on simplicity, and identify what is a platform and what is a secondary or arterial app.
- You know the degree of integration and the value of data to your organisation and have a best in class data management strategy in place based on customer preferences and choice.
- You measure user adoption and satisfaction, and you drive scale and wider adoption by overlaying simplification technologies.
- You view your Marketing Ops team as primarily People-centric, not Tech-centric. A place from which to drive understanding and adoption, give guidance and drive change. It is not there to centralise overt control or to drive dissatisfaction and frustration.
- You are looking to capture quantifiable business benefits such as measuring business savings through scale and business acceleration through improved intel and customer experience.
- You survey internal users as well as customers on their digital experience.
- You are aware of the cost and have built a methodology to measure the value/business benefit of such an investment. You don’t just measure ‘campaign success’ to prove your martech impact, rather you measure success based on martech adoption, regional agility, and satisfaction metrics e.g. Return on Martech Spend (ROM).
- You strive to promote Martech as an enabler of customer centric marketing and trust and are hungry to set new visions and drive wider change within the organisation in areas of Customer Data Management and Sales Enablement and Productivity.
So there we have it. In 2023 we think the CMO’s martech strategy will be under more scrutiny than ever before. CMO’s need to stop the mindset that campaigns are the best measure of martech success, and a new sustainable martech agenda of doing more with less is long overdue. A focus on simplicity, adoption and satisfaction, not cost and complexity, will win CMO’s organisation wide trust and respect.