As digital advertising climbs towards an estimated $170 billion this year, there are increasing opportunities to create rich experiences for customers. With opportunity, however, comes increasing complexity. Execution becomes more complex. Technologies evolve. Strategies must keep pace with evolving customer expectations. As marketing and innovation serve as critical drivers of growth at a time when the limits of cost cutting have been reached, companies are now expanding the role of the traditional CMO to include a company’s growth agenda and introducing new roles such as the Chief Marketing Technologist to develop the technology infrastructure that will enable personalised customer experiences.
These roles are focusing heavily on technology and IT spend to support marketing structures within their job descriptions – whether it be for distribution and activation, managing campaigns or putting optimisation and report analytics in place. In fact, recent research reports that marketing groups have some of the largest IT budgets in the enterprise, outpacing the IT function itself.
The increasingly fragmented marketing ecosystem presents brands with a number of key challenges. CMOs, and other marketing executives, are trying to get their heads around the challenge - typically launching major initiatives to address customer targeting, data management, and better cross-functional collaboration. Suddenly, marketers are being asked to do a whole lot more. At the same time, they are being hit with increased accountability for customer experience and business growth.
Measuring marketing impact
Program results are being measured far faster and with more quantifiable results, thanks to technology, and this isn’t going to abate anytime soon. Spending precious marketing dollars wisely, regardless of a company’s digital maturity stage, has never been so important for marketing departments.
But how do CMOs get a holistic and centralised perspective on customer data that comes from a variety of sources and needs to be centralised? Here the challenging question arises. Should they invest aggressively in long-term initiatives and associated technology or take the less expensive and more conservative approach? This is where the “build versus buy” decision has to be made by CMOs when addressing software requirements, such as business intelligence and analytics tools.
Of course there are software companies and system integrators that will provide them with the tools. But will they be the right solutions to seize digital marketing opportunities? And how can they possibly evaluate all of the options? The answer, unfortunately is, probably not.
From my experience working with a cross-section of organisations – from start-ups to Fortune 500 companies - there seems to be a common path CMOs look to take: Start with off-the-shelf software because it is a quick, cheap and easy fix. This is usually followed by a realisation that the lack of customisation available to address day-to-day operations leads to inefficient, manual work-arounds. Worse yet, the solution simply doesn’t meet the needs of the various stakeholder groups across the organisation. As the company expands, so do the challenges, impacting functional areas beyond marketing and even stunting business growth. The only option is to switch route and invest in custom software to scale effectively. Another unexpected cost to the bottom line. In retrospect, many of these trade-offs could have been assessed far earlier if they had put a roadmap in place for the evaluation, acquisition and integration of digital marketing tools.
Try before you buy mantra
For CMOs looking to invest in new technology, it is crucial they test before they buy. They need to test the tools on their own sample data, in their own controlled environment. They need to re-create the pain points that need to be solved without the pressure of software vendors looking for a sale and the day-to-day disruptions of workflow.
Organisations shouldn’t fall for the fast and inexpensive approach, only to be forced to re-invest in a different set of digital marketing tools at a later date. Instead, CMOs should take a considered approach and map the strategy out carefully, underscoring what the company is looking to achieve from its marketing assets. This is a basic requirements gathering process that we might do for any strategic initiative. Some considered questions for the CMO include: Is scale more important than centralisation? Do we want, or need to, build a solution from off-the-shelf products or would a customised software approach be the best road to take? What are the implications of customisation in terms of internal development, process changes – even structural changes? Does the company have the IT infrastructure to support these new tools, or would it be better taken out of house? These are all important questions that need to be carefully considered.
There is no getting away from it, the flood of marketing tools and the digital environment have outpaced the CMO’s skillset. The ongoing technology chase continues, yet marketing is still the tail on the dog. Sales gets its plan in first and marketing has to support it. Companies need to start looking at marketing not as a cost centre, but as a go-to-market tool. Remember, marketing provides the airspace for sales on the ground. But the good news is that if CMOs can get through the data sources maze and put the right digital marketing tools in place, the organisations will very rapidly reap the reward.
By Nick Strauss, Vice President of Digital Strategy at Theorem.
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