Our latest research found that CMOs now account for 25% of the total business-led IT spend. As CMOs are increasingly held accountable for that spend, CEB research how marketing’s partnership with IT is key to avoiding critical mistakes.
A CMO’s technology spend can no longer just be called ‘shadow’ or ‘rogue’ IT. Whether it’s new CRM tools, social marketing apps, or data analytics, technology initiatives are deeply embedded in the marketing department, and for good reason. The role of marketing has evolved drastically in recent years. Online channels have fundamentally changed how customers interact with their brands and products.
To keep up with digitally enabled consumers, marketers need to be fast and flexible when experimenting with new technologies. But with so many new technologies emerging, it is extremely difficult to place bets.
In response, Marketers are looking more and more to investments in innovation that help enable collaboration, analytics, and the customer interface.
As digital marketing increasingly is a priority for CMOs and their teams, their relationship with corporate IT becomes more and more important. However, we’ve identified three common mistakes marketers fall victim to when making technology investments:
Mistake #1: Focus on the latest ‘big thing’
One common mistake is to focus on an exciting new technology, such as a new mobile app or a marketing automation application, and then think about how it can fix a problem or create a new opportunity. This is like picking up a hammer and looking for nails. Many business leaders complain that their IT departments fall into this trap, but it is an easy mistake for marketers to make as well.
CMOs need to start with the business objective and figure out which technologies will be most effective in achieving it. A good way to frame the objective is to use the language of business capabilities. This approach is often used by business strategists and IT leaders to describe in precise terms the activities needed to realise a specific strategic goal. Defining capabilities allows marketers to quickly narrow down options and clarify potential rewards.
Unfortunately, defining capabilities will not inform the costs and risks associated with implementing the solution, especially if there are significant dependencies on other systems. Whether the project is big data analytics, marketing automation, mobile marketing or even SEO, this complexity requires deep technical expertise that often necessitates partnership with functions outside of marketing to fully assess both the risk and the reward.
This leads to critical mistake #2…
Mistake #2: Marketing decides to ‘go it alone’
When trying to keep up with the rapid shifts in consumer technology adoption, CMOs often take the lead in experimenting with technologies in order to maximise speed and flexibility. This may result in decisions to launch a test quickly, and have IT figure out how to support it later.
This approach creates three big problems for marketing. First, critical risk areas like data privacy and security can be overlooked with potentially disastrous results in the short term. Second, much of the value of the new technology may be lost if the data it produces can’t be integrated with other company data sources. And finally, even if a new technology seems successful in a ‘test’, the CMO still doesn’t know whether the long-term benefits outweigh the costs and risks.
Even when marketers disagree with corporate IT on the trade-off between potential risks, integration costs, and business value, this conversation needs to happen during the early stages of investing in new technologies if marketing wants to realise ROI.
Mistake #3: Test, but don’t learn
CEB research shows that 62% of employees lack the necessary skills and judgment to use analytics effectively for decision making. In marketing the situation is even worse as 78% of marketers don’t make the grade. So as CMOs invest in new technologies that produce and analyse data, they must build teams with not just the right technical skills, but the right analytical skills to make use of it.
Developing analytical skills and judgment is one of those critical activities that lacks a clear corporate owner. CMOs should partner with HR, IT, and other data-intensive teams, to build a curriculum and provide hands-on coaching and support.
CMOs need to recognise that the risks from digital marketing projects are often difficult to assess and the rewards difficult to capture. Only by partnering with IT can CMOs avoid these three critical mistakes and really reap the intended value of their investments.
By Andrew Horne, managing director, and Karl Schmidt, a senior director, in the Marketing & Communications practice at CEB.
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