Whether a glass half-full or half-empty person, you must admit it’s been a wild couple of years. To add to the usual list of challenges marketers and their technology counterparts deal with regularly, we’ve been saddled with:
- A pandemic.
- A looming recession.
- Inflation at levels the U.S. has not seen for 40 years.
- And ongoing labor and supply chain issues.
Somehow, news that e-commerce jumped 55% during the last couple of COVID years is lost on many, except maybe the companies able to capitalize on the wave.
Every CMO I’ve talked with in the past two years is hungry for talent, but they haven’t had the budget to staff up. While 61% of CMOs report they lack the in-house capabilities to deliver their strategy, spending on in-house labor remained static, per Gartner’s 2022 CMO Spend survey.
U.S.-based employment cuts in September of this year were 46.4%, an increase of 67.6% from the same month last year, according to a recent Challenger Job Cuts Report. (Tech company cuts are up a whopping 86% from last year).
The same report details that September marks the fifth time this year employment cuts were higher in 2022 than the corresponding month a year earlier. We see labor contraction at startups and public companies across multiple industries as part of a broader strategy to brace for what many believe to be the start of a long-term economic downturn.
Will marketing tech budgets grow in 2023?
If what’s past is prologue, marketing budgets will likely contract further in the coming year, despite a new survey saying 70% of U.S. marketers expect their tech budgets to grow. Although budget dollars appear to have flowed freely during the height of the pandemic, those marketers might be in for a bit of a rude awakening.
Dig deeper: B2B marketing budgets stalled out in 2022
The consensus of senior leadership in many companies is that if buying slows, advertising and marketing spending are the first places to cut. After all, the marketing cost center is pure overhead, they say. Where’s Don Draper when you need him?
Martech: More complex than a black hole
That same survey also notes that more than 60% of B2B marketers say their martech stack is too complex, with one in five saying it’s “more complex than a black hole.” Kudos to the 60% for being honest about it.
The 93% publicly sharing that replacing, updating or consolidating tools would help fix that problem isn’t just shocking — it’s proof what I’ve been saying for years is true. Marketers are not product managers.
Assembling dozens of martech point solutions and platforms from disparate vendors to create a practical, effective and efficient marketing technology ecosystem has been a massive challenge for marketers.
Why is it such a problem? One reason is when marketers use the “best-of-breed” approach to build their martech stack, they are forced to focus on product management instead of marketing. In my decades in technology and marketing, I haven’t met many CMOs who were excellent product managers (or CIOs who were great marketers).
Break free from the need to buy
The question I’m hearing from clients, prospects, colleagues, vendors and others is: “Will 2023 get measurably better, or are we in for another year (or more) of tumultuous change and business and marketing headwinds? How can my marketing organization prepare, survive and thrive?”
Borrowing from JPMorgan Chase CEO Jamie Dimon, these are very, very serious things we’re discussing here. You can indeed dismiss them as political rhetoric or scare tactics. But it’s far more prudent to take a position somewhere in the middle where we expect the unsustainable “binge and purge” labor frenzy to calm down, consumer wallets to tighten and budgets to do the same.
To begin to answer the question “How can my marketing organization prepare, survive and thrive?” is first to understand that the strategy seemingly preferred by most marketers, according to the above survey, makes no sense.
A Forbes article earlier this year said that per McKinsey, BCG, KPMG and Bain & Co., the failure rate of digital transformation projects is between 70% and 95%. Do we believe those projects would have had better success if they’d only purchased more technology? The same applies to your martech stack. You don’t realize a reduction in complexity by implementing more of a complex thing.
Further, the research confirms that most marketing leaders recognize they don’t have the people to operate these complex black hole martech stacks. More technology without intelligent, skilled resources to develop requirements, implement, manage and use the technology is a fool’s errand.
Dig deeper: 5 steps to martech stack success
Avoid the martech black hole and ride the crest of change
To unlock the power of your marketing technology while creating a foundation to futureproof your martech stack:
- Start by getting your team’s collective brain wrapped around your current-state martech stack.
- Define, prioritize and align your business, marketing, customer experience and technology goals before replacing, updating, or consolidating anything.
- Put the checkbook or credit card away and cancel those martech vendor demos.
Please.
Despite potential lousy weather ahead, here’s some advice to help you and your marketing organization weather the storm and ride the crest of change instead of being swamped by it.
Back to basics: Start with a plan
Since we’re swimming in stats, 41% of marketing leaders don’t have a plan for building a useful marketing technology stack, a survey from GetApp found.
I’m not advocating a “make the plan, work the plan” approach. Stuff does happen, so agility is critical in today’s dynamic business, marketing and technology environments. But that doesn’t mean you shouldn’t create a plan to choose, implement, use, manage and optimize your martech stack before making any purchases.
You create the plan knowing it’s going to change. As Mike Tyson said, “Everyone has a plan until they get punched in the mouth.” This is similar to the old saying, “No plan survives first contact with the enemy.” Slowing down to do the needful before plunging headlong into what might be shallow water is the approach that’ll produce the best results.
We know the most about a project when it’s completed. Unfortunately, there’s just no way to know it all when planning the building or optimization of your martech stack. Once you get started, you’ll learn more from every step. Your plan (and organization) must consider this and be flexible enough to adjust as you go.
Perform a martech stack inventory
You should carefully and effectively inventory the specific platforms and point solutions that make up your stack. The inventory exercise will help provide visibility into your martech investments and help you uncover gaps between your martech ecosystem components and the proficiencies needed to care for and feed them. You may have to dig a little to find it, but don’t forget to include “shadow martech.”
Shadow martech emerges when silos and internal blockers force marketing teams to develop “creative” solutions, like procuring or building tools beyond the purview of corporate compliance and security. Some studies have estimated shadow IT in organizations at 30-50%. While I haven’t seen specific numbers related to shadow martech, it’s likely much bigger than a breadbox but smaller than an elephant.
Do an implementation review
Once you’ve completed the inventory and have a reliable artifact of your efforts, the next step is to review the implementation history of every platform and point solution. If you haven’t already, you should sit down with the team and document the end-to-end implementation experience from start to finish of every platform or point solution in your stack, including the outcome(s).
I know, it sounds counter-intuitive. You’ve already completed the implementation. In my work with clients, software vendors and partners, I’ve found that besides the martech selection process, the implementation of marketing technology is the most crucial contributor to the success (including subsequent utilization and ROI) of your martech stack. Besides, you can’t really know where you’re going until you know where you’ve been.
My unscientific research suggests that over 75% of martech implementations fail for various reasons, not the least of which is a lack of business, marketing, customer experience and technology requirements or other selection criteria.
In far too many cases, implementations result in the client saying something like, “That’s great, but it’s not what we wanted or expected,” or worse yet, “We can’t use it.” If you’ve read this far, I can confidently (and with empathy) say you’ve most likely experienced at least one martech implementation #FAIL.
Document all integrations
Whether or not you’ve gone down the integration road, integration is essential when building and optimizing your marketing stack. Unfortunately, while many marketing leaders say integration is required, for most marketing organizations, martech integration is treated as a “would like to have” rather than a “must-have.”
Start with a plan for how you’ll use your martech stack and evolve that plan to include integrations using APIs and other methods to connect your platforms and point solutions into a holistic ecosystem. You’ll be much closer to a 360-degree view of your marketing efforts and, with the right data management strategy, your customers, too.
Remember that martech integration is complex work requiring considerable technical skills and a culture of experimentation. These things are at the core of successful integration initiatives.
Understand investment, utilization and ROI
“[T]he utilization of marketing technology capabilities has fallen substantially, despite consistently high investment,” according to the Gartner 2022 Marketing Technology Survey. Further, Gartner reports that marketers utilize just 42% of their martech stack capabilities today, compared to 58% in 2020.
Wait, What? Remember the 93% of marketing leaders I mentioned above who shared that replacing, updating, or consolidating martech tools would help reduce the complexity of their martech stacks?
They want to invest in more marketing technology platforms and point solutions despite saying their martech stack is so complex it’s like a black hole. Still, they only use 42% of the features and functions they’re currently paying for.
You’re not alone if you’re as confused as a goat on an astroturf right now. Part of this mess is due to the plethora of choices out there in the marketing technology space. There’s a tool for everything. If not, wait a couple of days because one will pop up.
Another contributing factor is starting with the technology instead of your business, marketing, customer experience, technology objectives and the problems you’re trying to solve. This Harvard Business Review article said it best:
“The number of vendors offering marketing tech is exploding, but too many companies take a “bottom-up” approach to purchasing it: Rather than starting with the objective of solving a problem, they begin with what is being sold to them. As a result, they waste money on hoarding data they don’t need and on “shiny new objects” — tools that seem dazzling but don’t provide real insights or work with a firm’s other technologies.”
Skin in the game
Time and money will become more precious as we advance toward and through possible bad weather. Like savvy customers have been asking for some time, ask yourself and your martech vendors, “For every dollar I invest in this platform or point solution, how much will I get back?”
You’re on the hook to do the math, get the answer and make the business case, but you can and should enlist the vendor’s help to assist and hold them accountable for results through performance-based contractual agreements. There’s nothing wrong with everyone having a little skin in the game.
Dig deeper: The formula for calculating martech ROI
There’s a lot to unpack
Despite the sobering stats I’ve shared, I don’t necessarily think the sky is falling just yet. There are tremendous opportunities for marketers to engage more deeply, convert and retain customers by creating and delivering remarkable customer experiences.
The fact is, those experiences are supported in large part by the marketing technology stack and the people who make it go. Like the foundation of a structure, building a solid footing for the people, processes and technology needed for activation is the difference between success and failure.
I hope you’ll go back through the article, take some notes and use what you think is vital to your cause to help you make intelligent decisions and improve the success quotient of your marketing technology stack build or optimization. If you want to continue the conversation, please get in touch. I welcome any inquiries via my profile on Linkedin.
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