The marketing world has been invaded by marketing technology (martech) over the last decade, and this has transformed much of marketing for the better. The ways we can use audiences and personalise messages is a thing marketers dreamed of just a decade ago. But nothing in life is perfect! The Gartner 2018/2019 CMO Spend Survey says marketers are spending 29 per cent of their marketing budget on martech. It’s broken down further as 24 per cent to labour, 23 per cent to media, 23 per cent to age
agencies, and 29 per cent to martech. For me, those ratios are way out of whack. This is across a range of industries, not just retail. But still.
How did we get into this state? I think it’s to do with profits. Martech can be very profitable and often well funded by VCs. They have the best salespeople with aggressive targets and big marketing spends. As a result, martech is ever present as a solution to every problem.
And martech is great and can offer value to a business.
There’s a whole pile of things which also add a lot of value to most marketing organisations.
Usability studiesWriting great copyImproving internal processReviewing dead contentCustomer journey mappingRefining brand strategyCustomer researchStaff training
These things don’t have highly paid salespeople and don’t sponsor major conferences, the margins aren’t there. They are (largely) labour intensive and require hard work and thinking and are, well, messy and not sexy. Which wins more awards and board room accolades – personalisation project, or rewriting website copy?
Gartner predicts 80 per cent of marketers will abandon personalisation efforts by 2025. Creating content is hard, and creating content for a multitude of audiences is harder. The people and process required to do this chips away until someone asks: is there a return on this?
I recently worked with a company that was spending around that 29 per cent market on martech. Within a day of working with them, I found they hadn’t done the most basic segmentation on their EDMs, had no coherent brand strategy, they’d never spoken to a real customer, and a chunk of their multi million paid traffic spend was going to 404 pages. In the meantime, their visual merchandising tool, which was costing them thousands of dollars per month, was left untouched, due to a lack of resources.
The time-poor head of marketing had believed the sales hype that “this tool will take very little time to deploy and will save you so much time”. In my experience, this is never true. My recommendation was to dump half their stack and move the money to people and media.
I had a conversation with Kellie Cordner about this a while ago. She’s a highly skilled CMO who has been running Carsales.com.au for a few years. We agreed the martech budget sweet spot was probably in the 5-10 per cent of marketing budget range. Again, it dependis on your business.
This is what I ask before engaging a new piece of martech:
Do I have the people to take advantage of this tool?If I do, is there an existing tool I’m already paying for with untapped potential which I should be deploying those people on?Does this tool have a better ROI than increasing my media spend?Does this tool have a better ROI than hiring more people? Is there a similar tool which does at least 80 per cent of this much cheaper?
I assessed a marketing tool recently. There was a tool which was several $1000 a month, and another which was $99/month. The expensive tool was way cooler, but did we have the resource to take advantage of those advanced tools? Probably not. And hey, we can always upgrade! I went with the $99 version. It’s going great and delivering awesome value!
Don’t get me wrong, I love martech, it’s one of the fun parts of the job. But start with sorting out the people first, then the process, and then the technology last. Not the other way around.
Mark Baartse was the former CMO of Showpo and now is a marketing and e-commerce consultant.