As CMOs take on more responsibilities, columnist Jim Yu discusses three key strategies to help them develop a technology stack that will drive performance, convert leads and justify the value of an increased marketing budget.
Over the past four years, the role of chief marketing officers has changed. Once, CMOs led small silos that focused on growing business impact across paid media channels. Now, CMOs are increasingly being asked to manage company impact and growth across an array of owned digital media and customer relationship channels — with robust budgets to match. While the breadth of technology continues to grow, separate tools themselves do not necessarily equate success.
Budgets for marketers are slowly climbing, and responsibilities are broadening, according to Gartner’s 2016-2017 CMO Spend Survey. Marketing budgets have increased approximately 1 percent per year since 2014, bringing the marketer’s average share of company revenues up to 12 percent as of 2017.
As organizations direct more of their funding into the hands of chief marketing officers, CMOs are experiencing another shift in the form of how they manage their marketing technology spend — in which digital marketing has taken center stage. With it has come an array of technologies that promise to simplify the lives of marketers as they collect data, direct customer journeys and push out brand messaging.
The performance imperative
With the intent of gaining a competitive upper hand and growing ROI, brands continue funding lines to their marketing departments to secure the technological means to an end. Marketers are spending around 33 percent of their overall budgets on marketing technology — a multibillion-dollar industry that, thanks to increased CMO budgets and responsibilities, is likely to keep growing.
But while these technologies are attractive, and while marketers are being empowered to secure and use them, some marketing technologies cannot guarantee performance, ROI or even simplification on their own. After all, different technologies satisfy different needs and provide varying insights; this is why any given company is likely to use an array of solutions that, in theory, helps them drive their overarching marketing initiatives.
With so many tools and insights available, it’s critical that marketers have an intentional and holistic understanding of their marketing technology stack.
With greater funding comes greater responsibility. The CMO’s performance imperative demands that they can clearly demonstrate how every element of their spend is bringing about meaningful returns, lest they fall prey to the very real risk of budget-slashing.
Fortunately, with some foresight and care, marketers can develop technology stacks that avoid needless redundancy, drive performance and clearly articulate their valuable returns.
To succeed, marketers should consider adopting three key concepts to help them identify tactics that are driving new customers, converting leads and helping to increase revenues at the bottom line.
Place performance-led platforms at the core of the marketing stack
Every organization has different needs and priorities. As a result, marketing stacks can and should vary from one company to the next.
When determining the structure of a marketing stack, CMOs should consider what their key priorities are and build accordingly. Some companies will want to focus primarily on thinking through the journeys of their customers, while others will focus more intently on how information flows throughout their organization.
In any case, ensuring that the end goals of the organization are aligned with performance-focused solutions to get there is the critical first step to creating a marketing stack.
Assess the current state
“What tools is the company using to reach its objectives? How do these tools move us closer to our goals? Why did we choose this platform rather than that one?”
All of these are questions CMOs should ask themselves when assessing their spending and choice of marketing technology.
Put plainly, every part of a marketing stack should have a clear, easily articulated reason for being used. Further, that reason should be aligned with the overarching goals of the company.
From there, CMOs should ask more clarifying questions to determine just how much value they are getting from a given technology in terms of performance versus cost. This process isn’t strictly about inventing reasons to keep tech around, however. CMOs should also use this assessment period to suss out needless redundancies or low-value tools in their stack, prioritizing performance over bloat.
After an initial assessment, marketers should consider the capabilities that they currently have — as well as the capabilities they may need in order to grow their margins in the future. One way to manage this is to identify the “must-have” capabilities which mark the difference between immediate success or failure, as well as the “good-to-have” features which either make success more easily achievable or incrementally extend the margin of growth.
Understanding what a stack can and can’t do — or, more importantly, what it must do to drive results — will help marketers to make critical decisions about how to structure their technology and methods going forward.
Visualize future states
Once marketers have aligned their objectives, tools and capabilities, it’s critical that they establish a set of practices to help them achieve results consistently.
More plainly: After a marketer knows what he or she wants to accomplish, they need to think about how they’ll go about making that happen.
One way to do this is to “work backward,” overlaying an understanding of objectives, tools and capabilities onto a pathway of results and processes from end to beginning. Essentially, this thought exercise demands that marketers understand everything that must happen to achieve their intended results. Once a marketer knows this sequence and has built the process into his stack, he’s better equipped to use the tools at his disposal and create replicable, measurable value.
Use data to uncover insights and move the needle
Marketing technologies create a number of data points from which marketers can derive a massive amount of information. However, that information — in all its vastness — is of little use unless the marketer understands how it benefits her organization.
Smart CMOs will understand the gap between the amount of data available and their ability to connect this data across multiple technology platforms. Deep learning technology and data insights will make it easier than ever for the CMO to understand consumer intent, connect the marketing dots and bridge the marketing gaps.
Without an army of data scientists, many marketing departments will utilize machine deep-learning technology to analyze huge, complex and dynamic data sets. Identifying patterns in data in real time with deep learning will allow marketers to understand customer, competitor or market changes — and immediately turn these insights into action and outcomes.
Establish key performance indicators
One way to ensure an understanding of data’s value across the spectrum of technology found in a marketing stack is to establish key performance indicators, or KPIs.
A key performance indicator is a measurable value that helps companies understand whether they are achieving key business objectives. For example, a business owner who sought to convert leads into sales via e-mail might monitor how often their open rate also reflected a sale on their e-commerce platform.
Depending on the data derived, that business owner might determine that an email newsletter isn’t his or her best driver of sales and choose a different form of outreach — or they might choose to dig deeper, conducting an A/B test to determine what sort of copy, timing or other measurable change in their outreach led to the most sales.
Critical in forming an effective KPI model to work with is understanding the difference between key data and other kinds of information. While it’s nice to know an array of metrics, marketers should focus primarily on data which pertains directly to their business impact.
Share data across silos
Each element in a marketing technology stack likely produces information that can be used to influence decision-making. Marketers should act on the value of this information by sharing it outside of their department. Sales, customer service, design and user experience are just some areas that can benefit from marketing insights.
As the CMO’s budget and influence over messaging and applied technology grows, so too does their responsibility to move the company as a whole forward. The insights the CMO derives from data and interactions with the marketing stack represent a radical opportunity to build the successes of the marketing department into every facet of the business, further justifying the value of an increased marketing budget.
Integrate technologies intelligently
An effective marketing stack does more than neatly arrange a set of technologies, clearly articulate their myriad purposes and establish data points; it also uses the platforms that make it up intelligently, maximizing the individual potential of each technology by creating a system that is greater than the sum of its parts.
How do marketers do this? The answer: by choosing technologies that are complementary and primed for integration across platforms.
Choose complementary tech, and automate
According to Integrate, a marketing orchestration software company, automation and integration are the “secret sauce” to building a marketing stack that is both simple — marketers should strive for some level of simplicity given the sheer amount of information they manage — and effective.
At the same time, Clay Stobaugh, CMO of Wiley, tells CMO.com that CMOs should “choose just one best-of-breed enterprise platform partner for each part of the technology stack — CRM, content performance and search, automation, social, digital analytics, customer experience and digital commerce.”
Each of these technologies should have features that allow them to work together seamlessly, and marketers should consider those solutions which include APIs that allow work from one platform to be imported into another — automatically.
If the Stackies are any indication, marketing stacks and their visualizations can be extremely sophisticated — and complex. CMOs looking to create the most effective stacks for their organizations should be aware that complexity and sophistication are not always one and the same — and should remember that the most important part of building any stack is building with the principles of performance, data-responsivity and goal alignment as the foundation.
CMOs who create performance-led stacks with clearly articulated APIs and data-rich KPI monitoring systems will be able to answer easily to their performance imperative and build targeted account-based marketing plans, thereby justifying their increasing budgets. Those who don’t may find their budgets quickly slashed.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.