Much has been written about marketing technology (MarTech), from eight years ago when Gartner first predicted marketing would spend more on technology than IT until now, no one can argue there have been considerable growth and changes to the marketplace. When looking at this through the lens of a CEO, one has to ask the question – “Have we achieved a better ROI because of our focus on marketing technology?” If firms are really honest with themselves, the answer is a resounding no!
Three MarTech trends are impacting poor financial performance:
- Overhype, underperformance
- Too much MarTech investment, too fast
- Lack of skill development
Over the last 10 years, MarTech has grown from a few primary categories and some select vendors to over 50 categories and 6000+ vendors. You can find software for just about anything, and every vendor promises to change the world. The reality is most vendors solve for a very specific item and don’t integrate into other software beyond CRM and some marketing automation platforms. There just isn’t enough market demand. The primary strategy for growth is to sell to customers who already own a major marketing automation platform. But there are only about 20,000+ companies worldwide that have a mid-market or enterprise marketing automation license. Every vendor is bombarding the customers and the partners who support those platforms. With few exceptions, most vendors have immature platforms with very basic functionality. There just isn’t a strong enough business case to invest in the vast majority of them.
“Marketing departments are spending too much money on technology they aren’t using.”
Too much MarTech investment, too fast
Ten years ago, most marketing executives were not being held accountable for revenue and business performance. Today they are, which is fantastic. Along the way, executives have over-invested in technology in an effort to rapidly scale and get insights into data so they could make better decisions. The problem is that they bought too much, reacting to quick needs and not taking the time to make a rational business case for what they needed, who the best providers were, what they would do with it, who would own it, and how they would integrate it and ensure adoption. The result is numerous siloed systems that do not communicate with each other.
There is more data than ever before and many of these systems are only partially adopted. Marketing departments are spending too much money on technology they aren’t using. In larger organizations, there are also redundant and overlapping systems, as different product groups or geographical regions have been allowed to purchase their own technology, or there have been acquisitions and mergers. In either case, there is no central control or management of the technology.
Lack of skill development
One of the fallacies of purchasing technology is that because it helps you scale, you don’t need to invest in personnel. In fact, it’s quite the opposite. Most of the more sophisticated marketing platforms require full time usage and mid to advanced skills to take advantage of the capabilities. So, many marketing resources are now managing multiple systems simultaneously in addition to other responsibilities. They don’t have the time to even really use the systems, and they lack the training and skill to drive adoption and expanded usage. This leads to turnover for both personnel and technology and lost opportunity cost. Employees get frustrated and move on to other roles where they have a more reasonable work load. Executives get frustrated with the technology, claiming it is too difficult to use and blame the vendor and then switch to another platform, paying for more implementation and migration fees.
So, how do executives improve MarTech ROI? First, start with a multi-year strategy and plan. What is the business trying to achieve and where is it going? What are the gaps from where you are today? Then, develop specific KPIs to measure key outcomes. Hire a marketing technologist as a full-time executive role, reporting to the CMO. This person should be responsible for planning and managing technology selection, implementation, adoption and ROI. Develop a staffing plan on the key platforms and invest in training and skill development as part of career progression and develop MBOs to reinforce. Have an annual review to evaluate current systems adoption, GAPS and next year’s requirements. With a commitment to strategy, budget optimization, personnel and planning, every company can achieve a much better ROI with MarTech.