The Marketing Technology Minefield
Of all the executives in the C-Suite, the role of the Chief Marketing Officer has probably changed more than any other over the past 15 years. Marketing is no longer simply responsible for brand awareness and building brand equity, rather it is now a direct driver of prospects through the sales funnel. While the marketing function can drive brand differentiation and customer loyalty in an increasingly crowded and commoditized world, it is also responsible for communicating in multiple formats with consumers across many different channels. Although the fundamental mission of the CMO has not really changed much over the years - to engage, acquire and retain customers for the long term; the array of technology solutions targeted at the needs of the marketing department has grown enormously.
The key driver of this change is the rapid growth in the volume and variety of data largely brought about by the internet. Online channels (whether ecommerce or social media) have resulted in consumers becoming more empowered and demanding that the companies with which they do business understand and meet their needs. The path to purchase has become more complex, as consumers engage with a brand through multiple channels before making a purchase. Consequently, the marketing department can no longer run a siloed operation where the digital team functions independently of the traditional marketing touch points. It must now be integrated, real time and be able to predict what a consumer wants, when he wants it and how he wants to be informed. This is not a new phenomenon - marketers have recognized this for a number of years; however new consumer communication channels such as social media continue to evolve in a way that impact a consumer’s relationship with a brand.
Today’s marketing team has a wide range of responsibilities and the CMO needs an organizational structure that meet its objectives and supports it with a technology infrastructure that is flexible and can scale. While other organizational groups such as finance and HR typically only have a single technology system of record, the technology stack for marketers is large, changing rapidly and is confusing. The technology has evolved to not only meet the pre-existing array of marketing requirements but has also expanded the population of marketing related business problems that are capable of being solved. The ability to track almost everything that a consumer does online has changed the game - in terms of the volume of data that must be monitored, the speed at which action must be taken, the relationship between what a consumer does online with his offline actions and more. Marketing has become a technology-driven discipline based on data and analytics. It is predicted that CMO’s will soon become responsible for spending more on technology than CIO’s - evidenced by the estimated $25 billion that was spent on marketing technology software in 2015.
Not surprisingly, a large number of companies have emerged to meet these growing needs. Scott Brinker at Chiefmartec.com has produced a popular infographic (shown below) on the marketing technology landscape that now includes almost 4,000 companies across 43 categories. My blog post “How Many Analytics Companies Are There?" (www.marinanalytic.com) includes over 160 marketing analytics companies alone. How is a CMO to navigate his way through this technology minefield? The average marketing stack in companies now consists of 17 or more tools. How should the marketer go about developing a technology stack that suits the needs of his business? There is no "one answer fits all" to this question. The nature of the business (B2B or B2C), the organizational structure of the marketing group, the data infrastructure, the skills of the team will all have a bearing on the technology solutions that are important.
Not so long ago, the tools available to marketers centered around database marketing and direct mailing. As the CRM market began to grow, marketers were able to develop more effective campaign management workflows to complement their sales and service functions. Then, as digital commerce took off, marketers had to meet increasing consumer expectations and manage a growing number of communication channels. Today, the customer journey is far more circuitous - consumers use multiple devices (increasingly mobile) and consume information in a variety of forms. While the move to the cloud has put the purchasing decision back in the hands of the marketing department rather than IT, the vast array of solutions requires marketers to have a sound grasp of their objectives in order to build a stack that works and scales.
Every marketing division will have different priorities and organizational structures designed to meet these goals - B2C companies are likely to be more focused on cross-channel marketing tactics while B2B companies will probably prioritize lead generation activities. Consequently, there is no common framework that defines how a CMO should build out a technology stack to achieve them. However, marketing technology is converging around some universal themes (or categories) - namely:
Data management platforms
Measurement and analytics
Customer experience management
Marketing resource management
The market for solutions includes both integrated suites offered by a small number of enterprise software vendors such as Oracle, IBM, Salesforce, Adobe and others, and hundreds of point solution vendors offering specific applications. The enterprise vendors have come to the marketing technology space from different perspectives and with different heritages and do not necessarily define the landscape in the same way. They have also have built out their solutions through acquisition resulting in some confusion as to how these acquired capabilities fit into the overall product set and roadmap; consequently there is still work to do in integrating and rationalizing their feature sets. This can be confusing to customers and prospects. In response, many companies have created a specialized function for the marketing technologist role while others must find an executive who has both the technology and creative expertise and can juggle these skill sets and guide the development of a unified, scalable and cohesive marketing technology stack. Gartner has illustrated this confusing array of features in their digital marketing transit map infographic that can be found at: https://www.gartner.com/technology/research/digital-marketing/transit-map.jsp?prm=gml-tm
One of the key questions to be addressed by the team is whether to go with a single vendor who can fulfill all marketing technology functions or work with multiple (best of breed) point solution providers. Users need to conduct their own cost benefit analysis considering such factors as functional needs, cost, implementation time frames, time to market, future needs etc. Scott Brinker at Chiefmartec recently referenced a report by Morgan Stanley which found that 0% of respondents said it was critically important and only 9% said it was very important to obtain all their marketing technology from a single vendor. He concludes that it is most important for marketing teams to standardize around a relatively small number of true marketing technology platforms that can serve as a common customer data foundation and to complement that foundation with key point solutions.
Whether a single vendor or a suite of solutions, the first step is to create a single view or profile of the customer that can be referenced by all applications. This does not mean that a single data warehouse is critical to a martech stack but it does require that there be a system of record that manages customer profiles. Understanding what data currently exists in-house (from the CRM system, website, financial, social media etc.) and what needs to be acquired or otherwise generated is the next step - whether it be internal customer level data (first party), customer level data from other sources (second party) or data from third parties. There are many case studies of creative thinking by marketing departments as to the types of data, which may be non-intuitive, that can add real value to solving a marketing problem.
Single vendors have moved towards capturing all functions under the marketing automation umbrella. However, solutions are constantly evolving and so a concrete definition of the functional requirements of a particular category is less important than understanding what features are key to a particular client and selecting those vendors that best meet those needs. The table below sets out the capabilities and features typically found in an enterprise suite.
As noted previously, marketing teams will all have different priorities for their technology stack. Chiefmartech promoted the “Stackies” awards where they invited marketers to enter a single-slide diagram of their marketing technology stack. The results of this competition can be viewed at www.chiefmartec.com. Scott Brinker notes that there were four approaches to visualizing the 21 entries:
clustered by marketing function
organized by flow in the buyer’s journey
organized as a layer cake architecture, with platforms as foundations and components added
diagrammed as a “circuit board” of how components are connected, mostly around data flow.
The marketing technology space is moving very quickly and this is unlikely to change in the foreseeable future. However, as it matures there will likely be an evolution in the nature of activity:
Marketing categories will continue to converge with various areas being consolidated into others. Categories and definitions will change over time.
The trend towards account based marketing will continue. As buyers become more discerning, marketers will need to develop more effective segmentation of best fit accounts.
Marketing applications will continue to become easier to use by non-technical users. This will provide opportunities for vendors with simple solutions that be operational and generate results quickly
Greater coordination between marketing functions will be important and will be driven by customers.
Consolidation of smaller vendors will accelerate - others will disappear.