Martech spending in 2018: What CIOs need to know
- 11 June, 2018 20:06
Forty-two percent of respondents to CIO's recent State of the CIO survey say that their marketing department currently has budget specifically earmarked for investments in technology products and services — almost all of them within the next three years. If that figure sounds high to you, it shouldn't. As David Ginsburg, vice president of marketing at Cavirin, said when asked about that figure, "What is strange is that only 42 percent have explicitly budgeted for tech. What about the other 58 percent?"
Hopefully IT departments have gone beyond the point where they think of marketing as mere fluff. But they may not be fully up to speed on marketing's needs — the technology sector that's become known as martech. We spoke to a broad range of marketing pros to find out just where all that marketing tech spend is going.
Fundamentally, marketers are looking for what any employee wants out of at-work tech: tools to make their jobs faster and easier. Ginsburg calls tools like these "force multipliers": they make it possible for one person to do work that would've taken a whole team in an earlier age. Think of them as the sort of robotic exoskeleton marketers strap on to go boost brand awareness and, ultimately, company revenues.
Of course, force multiplication doesn't just make the work life of individual employees easier. These tools increasingly automate many marketing processes and make it possible to do more with less — or, as Greg Fitzgerald, CMO of JASKbluntly puts it, "the key is to automate as much as possible so that a person does not have to be hired." Carolyn Crandall, CMO at Attivo Networks, explains what tasks are being fobbed off onto the machines: "Marketers need tools that automate operations, simplify admin tasks, track analytics, conduct account-based marketing, and ultimately, boost sales."
But as anyone who works in tech knows, sometimes the drive to automate everything results in an infrastructure so complex that you end up mired in tool management. "You should only purchase or subscribe to the tools you really need, and pick ones with complexity matched to the size, budget and expertise of the organization," says Cavirin's Ginsburg. "There are many marketing automation platforms, some of which are easier to maintain than others. There are also specialized tools (e.g., social media marketing, SEO optimization) that larger organizations will deploy. But for smaller organizations, these capabilities bundled within an automation platform work well enough."
James Pollard, owner of TheAdvisorCoach.com, a marketing consultancy that works with financial advisors, rattles off the tools in his kit: "I personally spend money on AdEspresso software to run my Facebook ads, Ahrefs to improve my SEO and do keyword research, Capsule for my CRM to manage my follow-up process, and Acuity Scheduling to manage my appointments."
One product that was name-checked by multiple respondents was HubSpot. HubSpot bills itself as an "inbound marketing" tool — essentially, a product category HubSpot CEO Brian Halligan invented, which involves pulling in leads by means of targeted and gated web content. Others, like many of the marketers we spoke to, have lumped HubSpot into the marketing automation tool category. Whatever you call it, it's pretty popular.
There are a number of realms where tools provide a continuum between human-assisted and human-replacement. For instance, Isabelle Dumont, VP of marketing at Lacework, cites tools that allow in-product chat and support during free trials. That has potential ROI for high-ticket products, and such software can be configured to make it much easier for employees to juggle several chat sessions, unlike traditional phone support.
But sometimes dedicating human resources to low-level customer interaction doesn't make sense — and that's where chatbot technology, touted by Verndale CTO Sean Connell, comes in, automating the process entirely. Today's tech is somewhat primitive, but Connell sees it as having huge growth potential. "Natural language conversation is changing the dynamic for how everyone engages with the world around them," he says. "Everyone who is not yet thinking about how these will affect their business needs to start today, and putting in effort and dollars to ensure that each element of the overall customer experience pays thought to natural language interaction, be it through a natural language platform, a structured data approach, or investment in things like Alexa Skills or Google Actions."
CRM and beyond
One set of technologies that give an extra oomph to marketing efforts that were almost universally cited as part of the marketing tech stack by the folks we talked to were CRM and its add-ons. These tools keep track of various customers that you've had contact with and help prompt and automate your next steps. "In B2B sectors," says Tom Pohlmann, CMO at AHEAD, "technology investments are weighted toward extending core CRM platforms like Salesforce.com, so that all stages of the buyer journey are linked, measurable, and optimized. These extension technologies, like Pardot and Marketo, also allow marketing to play more of a role in serving and up-selling existing clients, which is where the best growth opportunities often reside."
But when it comes to keeping constant contact with individual customers, martech is moving beyond CRM. Wayne Blodwell, CEO at The Programmatic Advisory, sees the platforms originally used to marshal customer data for CRM purposes moving beyond those tasks to meet customers wherever they live online. "Today, these technology platforms also enable brands to build customized website experiences, push notifications in an app, and target social media posts."
Whether or not they're luring in customers with custom content, everyone wants to get company websites high up on organic search; this is the realm of SEO, and it's often left to marketing staff by default, even though it can be a tricky technical task. "SEO software has exploded in popularity because it takes a lot of complexity out of the subject," says TheAdvisorCoach.com's Pollard. "Companies like SEMrush and Ahrefs have dominated the market for marketers."
And of course, once the visitors arrive, marketers need to understand how people are interacting their company's website, and there's a huge market for tools to help them do it. Ed McMasters, director of marketing forFlottman Company, a pharmaceutical informational leaflet provider, says that "this year I ventured into better understanding our website, traffic, and lead generation, investing in VisitorTrack from netFactor. This has enabled us to monitor anonymous visitors to our website and track their visit." And he plans to continue with the project: "My next purchase will be the 3M heat mapping technology from Visual Attention Software. This will be a fun purchase to better analyze our website development, advertising creations, and our overall market material development. I have tested and experimented with the program and really believe it is a tech advancement that will pay high dividends."
Marketers are sometimes the unique face of a company, reaching out into the world to promote their company's product and brand. Perhaps the most obvious way this happens is through advertising, which has now been thoroughly intertwined with the internet. "Pay-per-click programs with AdWords, Capterra, and LinkedIn can all, in an indirect way, be considered a technology spend," says Jake Wengroff, U.S. marketing manager at Miradore. More and more of that ad spend is going to social media sites ("due to lower costs," says Uwe Weinkauf, CEO of MW2 Consulting), and as noted above, there are products like AdEspresso that exist specifically to manage your social media advertising.
Social media monitoring
But marketers don't just need to toot their own horn; they need to see what other people are saying about them too. This imperative leads in a couple of fairly different directions. The first is the need to monitor what's being said about your company or client in the professional media, in order to keep ahead of bad press (or help signal-boost praise). "Media monitoring services are at the top of the list for many marketing departments — Cision, Buzzsumo, Vocus, Gorkana, Meltwater, BurrellesLuce, PR Newswire, Media Miser, and TV Eyes," says Jon-Michael Basile
Account Manager at Sage Communications. "These can cost anywhere from $100 to $20,000 a month. There a lot of issues with vendor lock in." Then at the other end of the spectrum you have reputation management tools that help you track what individuals are saying about you on social media and review sites.
Finally, we need to talk about data. We've touched on it before, but information about customers is one of the most important assets for any marketing department. There's a dark side and a light side to the drive for more data. "In light of the GDPR, marketing departments are investing in technology that enables them to collect, store and use consumer data in a legally compliant way," says The Programmatic Advisory's Blodwell.
But when it comes to data collection, not everything that's legal is strictly ethical. Dary Merckens, CTO of Gunner Technology, says that "all marketing tech revolves around using the sea of data acquired (or pilfered) from users." He outlines a ladder of ways that data gets acquired, which often involves outlay from marketing departments. "We've had research firms running focus groups and producing demographic data for decades now; I would call that the baseline of data acquiring ethics," he says. Further up the ladder there are schemes like the harvesting of data by Cambridge Analytica — "the reality is, that isn't an anomaly" — and then "scraping publicly available data to build profiles of people without their knowledge."
At the top of this scheme is "the illegal theft and sale of data," says Merckens. "They buy data from someone who tells them it was acquired and distributed perfectly legitimately even when it's not. They can build models based on that mass of data — and it's actually incredible the level of detail and the power of application you can get from a huge sample — and then once they have the models, they don't actually need the data anymore."
And that's the real key, the holy grail of marketing — ways to make sense of data. That's something that marketing is willing to pay alot for. "This has been and will continue to be one of the key trends of investment," says Verndale’s Connell. "While the data hoarding craziness of the past five years has not gone away, businesses are trying to think smarter about how to orchestrate and ultimately make use of this data in impactful ways. This investment typically boils down to data warehousing, data mining, and the ever-present business intelligence (BI). Where history seemed to think that data could solve the world's ills on its own, the new theme is that data on its own is useless without the strategy and ultimately the technology to enable it."
While marketing has a reputation as being a fluffy department, smart executives are willing to spend to make it a data-driven powerhouse.