When Gartner’s annual CMO spend survey for 2017-18 was released last year, people noted the fact that the budget allocated for martech had decreased to 22% from 27% in 2016-17. This was then considered as a negative sign in the growth of marketing technology, but an allocation of 22% was a pretty good level of investment. Some of the budgets were later redistributed to various services related to martech, which shows marketing professionals were still in the phase of learning martech stacks.
Gartner’s CMO spends a survey for the year 2018-19 is the evidence of the uprising of the marketing technology. A recent survey showed that the average budget allocated to martech jumped from 22% in 2017-18 to 29% in 2018-19, which is nearly 1/3rd higher. This investment confirms the predictions that martech is here to stay.
Even after a small dip in the marketing budget this year, dipping from 11.3% to 11.2%, allocation for marketing technology rose, which itself delivers a strong message about the future of marketing. The total company spends on martech is 29% of 11.2% which is 3.25%, compared to 2.45% of last year.
The interesting fact in the contract is that only 24% of the marketing budget on average is allocated to in-house marketing labour with another 23% for agencies. These figures also suggest that martech is giving extra leverage to the employees too.
Vital Marketing Capabilities that empower marketing strategies
As part of this survey, Gartner had asked CMOs to identify the most vital marketing capabilities that will support the delivery of marketing strategies, in which CMOs had to pick their top choices.
Let’s have a look at the choice of CMOs, in percentage,
|Marketing and customer analytics
|Marketing technology acquisition and use
As the survey study shows, 40% of the CMOs considered marketing and analytics as the key to success and would focus on developing it further whereas 34% said that there is a need to increase their efficiency to use marketing technology and optimize their marketing strategies, and 30% felt that customer experience is a vital skill and would like to concentrate more on it, to deliver top-notch service. So the vital capabilities according to most of the CMOs are marketing and analytics (40%), Marketing technology and use (34%), and Customer Experience (30%).
Many among us will disagree with the survey stating that some of the important factors like customer retention and growth got only 21% and customer acquisition was chosen by only 16% of the CMOs, which shows that the industry is obsessed with technology. But these claims are not true as we can see that those factors were considered by CMOs as they answered on the basis of the requirements of their organizations.
Analytics and martech capabilities are not at the cost of customer acquisition and retention, they are a part of the allocation of the marketing budget which is important in this hyper-competitive digital world. Technology as a whole is capable enough to enhance all the aspects of marketing, further empowering marketing professionals.
Developing these capabilities is not only about purchasing more technologies in the martech stack. CMOs have priorities as a shallow techno-fetish is a mistake. The hard work is reconsidering how technology is managed to leverage that technology effectively. And it’s most surely driven through the lens of winning loyal and happy customers.
CMOs are concentrating on developing a system that is constantly working in the following steps,
- Scale the process to centralizes that the technology works united as a whole,
- Automate technology with it to standardize common tools, data, and process that eases the process,
- Decentralize the ability in cases of local experiments & workflow, Federated data, citizen developer, integrators and data scientists
- Humanize the process for marketing empowerment, customer visits, and CX anomaly detection.
- Centralize it again for marketing enablement, enlightened governance, customer and culture codes.
Customer experience is a crucial part of any marketing strategy. This is the reason it is the third-highest ranked capability on the list, which is proof of the CMOs belief that customers are at the center of their marketing mission. Not just at the point of conversion or discovery or constrained solely to the domain of traditional marketing touchpoints but the whole customer experience.
According to the statement in the stats of Gartner’s report, CMO’s estimated that 18% of the total marketing budget is dedicated to customer experience initiatives. This expense is ingrained in various marketing activities, including web experience management and digital commerce too.
This will act as a new muscle to most of the CMOs, like learning to effectively collaborate with teams and departments other than marketing to engage and enhance customers across the organizational landscape.
The study by Gartner clearly gives the message that the marketing sector is still under development and marketing professionals have strengthened their position with the help of technology. It is also an alarm for the companies who still follow traditional marketing methods and are far away from digitalization, that it is now high time to start working on the development of their rusted marketing methods. It also reflects the interest of CMOs and their idea of marketing technology is their particular organizations and industries.
An increase in budget gives a significant indication of the future of marketing and also echos the expectations of marketers from technology. It also shows that martech has successfully obtained the trust of the businesses and is now ready to augment the marketing sector as a whole.
Marketing is a vast and diverse field, and diversified answers of CMOs showcase the integration of martech in almost all corners of marketing. It also brings the attention of market leaders to the role customers in the success of any marketing strategy and business. This study sends out a message to the marketers that customer acquisition, retention, and experience are the base of all kinds of marketing strategies. It also indicates that data and analytics will become great friends of marketers with AI & ML joining the force very soon.