Jeff Winsper, founder and President at Black Ink ROI discusses findings of their recent survey that show trends of their budget preferences, challenges, and opportunities
Yang: MarTech is needed to support customer-centricity.
Yin: It is their weakest internal capability to pay it off.
Marketers have long yearned for creating the best possible consumer experience, supported by a strong brand promise, regardless of the industry they serve and the business model at hand. When there were only about 10 different media channels available to engage with a consumer at their disposal 15 years ago, it was far easier to manage the mix. Now, with over 70 different media channels, this presents a daunting challenge to present the bilateral communications between the brand and the consumer. Think about it – in 1990, a consumer could phone, mail, or walk into a store as the proactive inbound model. Outbound included Yellow Pages, direct mail, phone, radio, broadcast, POS, out-of-home, or maybe an event or two. Added to that the complexity of media choices, the flux is the consumer bifurcation of purchase behavior across these channels, not the principles of branding.
This essentially often leaves the marketers chasing the consumer, which can cause a deterioration of the experience and a decline in brand preference. So, the saving grace, marketers believe, is leveraging Marketing Technology to arm them with more advanced analytics to make more nimble and relevant decisions to get ahead of this curve. This should not be real shocker, since Marketing, as defined by a set of processes, is the last frontier of automation at a large enterprise. Sales, IT, HR, Finance, and many others are well into their 2nd or even 3rd wave of maturity. Marketing is at its nascent stage, relative to its peers.
Black Ink ROI’s recent C-level Marketing Study reveals just how important executives place MarTech at the forefront to achieve brand domination. Like any new frontier, marketers may have the desire to reach nirvana, yet there still seems a lot more unexpected mountains, rivers, and caverns impeding progress. The survey, which ran in December 2015, has responses from C-level marketers representing the top 2,000 largest companies in the US by annualized revenue. Nearly 55% of the responders have over $5B in revenue, and represent approximately 30 different industry segments, with collective marketing budget over $11B, including program and labor costs. Findings aggregate their top priorities, obstacles, marketing technology investments, budget allocations, and how company culture can make a big difference to their ability to execute.
An evident overarching theme of the study is that analytics and infrastructure is driving transformation across the boardroom, between departments, staffing, and budgets. The study shows how marketers who can drive new revenue opportunities, customer engagement, brand management, processes, and key investment areas.
When asked what their top priorities are in 2016, customer-centric focus and strategy / brand management were #1 and #2 among C-level marketers, respectively. Reporting / insight, MarTech, and Omni-channel promotions landed at #3, #4, and #5 (see figure).
When asked of these priorities which are the ones that marketers could currently perform, customer-centric focus and strategy / brand management also were #1, and #2. This means they are doubling down the capabilities that they currently believe they can perform at the highest level. However, reporting / insight, Marketing Technology and Omni-channel ranked as the lowest abilities to perform. Therefore, marketers are placing a conscious decision to improve in these lagging areas. These areas typically sit in the Marketing Operations department, a more recently developed department with a legacy rooted in basic email and database marketing just a short five years ago (see figure).
It goes even deeper. Even if marketers wanted to advance their priorities, including the currently lowest capabilities, their #1 obstacle / barriers to achieving them is “Access to more advanced analytics / insight to make smarter decisions”, with “Access to data” and “Need to upgrade / improve MarTech” rounding out at #3 and #5, respectively. Improving inter- and intra-department communications and budget management was #2 and #4, respectively. Furthermore, because of these current obstacles, marketers are also extremely challenged to provide the desired C-level reporting they come to expect. Three of the top five reports C-level executives require consist of wagons circling around defining Marketing’s contribution to the financials. Marketing’s contribution to revenue, profit, and incremental ROI are woefully below the expectations.
This means that a broader definition of Marketing Technology are represented in:
- Three out of the top five 2016 priorities
- Three out of the five lowest abilities to currently execute
- Three out of the top five current obstacles and challenges
- Three out of the top five least able to meet C-level reporting requirements
This may not be all that bad, because it is often stated that the number three in Chinese, san, is considered lucky because it sounds like sheng (生), or “give birth”. Maybe that can fix the now imbalanced Yin Yang.
What are marketers doing to remedy this? A probe into 2016 marketing technology investments maybe an indication of a marketer’s intent to fill data and reporting gaps, and fulfill their priorities. There is an indicated proclivity to purchase Business Intelligence, Marketing Automation / Campaign, and Customer Interaction tools in 2016. This supports the previous findings that marketers are more comfortable supporting their customer-centric priorities. Advanced analytics and Attribution software were ranked #3 and #4, respectively. Surprisingly, even though marketers are very limited to internal and external data, Data Management was low on the consideration list.
It also suggests they are less concerned about advancing the KPI reporting that C-level management requires (such as ROI, or closing the data gaps), and to a lesser extent, the need to overcome their number one barrier to achieving success —“access to more advanced analytics / insight to make smarter decisions”.
They are also increasing Marketing Operations analytics staffing levels. And, they are increasing budget for advanced analytics to the tune of nearly 10% of their annual program spend, representing about $430M annually.
In conclusion, marketers are bullish on addressing the Marketing Technology challenges to help advance their comfort zone of brand management and improving customer centricity.
By Jeff Winsper, Founder & President
Blank Ink ROI