Lately, Marketing has been purchasing a significant amount more of marketing-related technology and services using their own capital and expense budgets. Some of this purchasing is being done outside the control of the internal IT organization and some is being done in conjunction with IT. Gartner has made the bold prediction that by 2017, the CMO will spend more on IT than the CIO.
Let’s look at some of the facts from the Gartner 2013 US Marketing Spend Survey:
- The average percentage of revenue spent on marketing is 10.4 %
- Digital Marketing represents 1/3 of Total Marketing Spend
- Up to Half of all Digital Marketing is Outsourced
- Search Marketing topped the CMO’s list of Outsourced Activities
- Over 40% claim that the keys to Marketing success are 1) Corporate Web Site, 2)Social Marketing, and 3)Digital Advertising
Now, let’s look at some trends of why marketing is spending more and more on technology. First, we are living in the age of the customer. Customers now have real-time information about pricing, product features and competitors. As a result, they hold the advantages, and one of the few competitive advantages remaining for businesses is to concentrate on the knowledge of and engagement with customers. Josh Bernoff, a Forrester Research analyst stated in a recent report that companies must not only be customer focused, they must be customer obsessed, focusing their strategy, energy, and budget on processes that enhance knowledge of engagement with customers. Implementing a customer based strategy falls under marketing for most companies.
For the last 10 years, many organizations focused on Customer Relationship Management (CRM). Now the focus is on marketing automation. We are seeing many entrants in this market with solutions offered by Hubspot, Marketo, Salesforce Pardot, Oracle Eloqua, and Act-On. Much of this is driven by the rise in popularity of social media sites, mobile applications and other web-based tools. Marketing departments are now beginning to monetize ongoing consumer conversations using social media monitoring tools provided by companies like Hootsuite, SDL, SproutSocial, and Radian6. The social media opportunity is huge and even traditional IT companies such as HP have recently joined in. The number of players and the amount of noise in this area is growing rapidly.
Another key trend is the use of big data for marketing purposes. Data analytics and business intelligence allow marketing to sort through the noise of customer data to gather the right information that is needed for product innovation, advertising, and much more. The correct customer data provides marketers with what they need to not only understand customers have done, but to predict what they will do.
The vast majority of marketing applications are provided as cloud services. Most cloud services can be paid for using OPEX funds, allowing Marketing departments to purchase key applications services and completely bypassing IT investment governance.
Marketing is a major player in the push for Bring Your Own Device (BYOD). Marketers want to use various mobile computing devices; many are designers and are demanding to use Apple computers. If they do not get the support of IT, they simply bypass IT and do it anyway. IT may object, but you can guess who wins when the decision goes to the CEO. BYOD frustrates IT for many reasons; they do not like losing control of the desktop and the devices attached to the network. However, many IT departments have received mandates and have been tasked with making the enterprise Apple-friendly (and increasingly Android friendly) and to adopt to a number of other devices such as tablets and tv media devices. BYOD in combination with a diminishing IT budget and cheap enterprise hardware and software deals has resulted in an IT department that is lagging and no longer the innovator that they were considered to be in the past. Many IT departments have even been accused of holding their companies back and placing their organization at a competitive disadvantage. Once involved and heavily invested in by the C-suite, the CIO has now taken a back seat to the CMO, as consumers are driving what tech products and services they want at home and in the workplace. CIOs must now accept this trend or look for another job.
Marketing has been traditionally underserved by IT. Because of the lack of marketing domain knowledge in IT, many CMOs have hired their own CTOs to guide their technology strategies. The tension between marketing and IT is actually quite natural given the way most organizations are structured. IT and marketing simply have different incentives and priorities. IT is primarily concerned with stability, security, cost, standardization, and functional specs, whereas marketing is more concerned with speed, agility, innovation, market impact, differentiation, and customer experience. It’s not that IT doesn’t appreciate marketing’s priorities — or vice versa. It’s just that their incentives cause them to value their own respective priorities more.
According to a new study by Accenture Interactive, 60% of CMOs and 73% of CIOs say that technology is essential to marketing in the evolving digital landscape. Furthermore, 77% of CMOs and 56% of CIOs rank each other’s departments as part of the top five business units with which they need to collaborate. However, according to the same survey, only one of every ten executives surveyed believe the CMO-CIO relationship and collaboration is at the right level. If you are a project manager or business analyst in IT, encourage your CIO to more closely collaborate with the CMO. Ask to work on IT marketing projects and you will have a bright future.