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An old saying goes that marketers only care about two things – the logo and the Pantone color.
Well, the advent of digital technology 25 years ago certainly changed that.
But has it gone too far?
New research suggests that in a few years, marketers will only be doing one thing: managing their technology. That's right – no more ads, no more content – just 100% button pressing, dashboard reading and automating everything.
Yikes! You said AI would include marketers in the matrix, but it could also just be about martech in general.
So what should you do?
We asked Robert Rose, CMI's chief strategy advisor, for his opinion. Watch this video or continue reading:
Marketers have been engaging with marketing technology for two decades. More and more technology is finding its way into marketing activities. The average marketing department today is more like a NASA control room than a place to create impactful content that changes the behavior of your intended customers.
In fact, this week Scott Brinker released his famous Marketing Technology Landscape Report for 2024 (registration required). It includes over 14,000 providers – 27% more than last year's 11,000 providers.
According to the report, marketing departments are using fewer apps – in most cases, the average reduction is 6 to 10%. But despite these declines, the number of applications in use is still staggering. Small businesses use an average of 162 apps and companies with over 10,000 employees use 650 marketing technology applications in 2024.
Surprise from the CMO survey
But the CMO survey shows more clearly that technology is fundamentally changing marketing.
The 32nd edition, released last month, covers marketing spend, performance, leadership and, of course, technology, particularly the growth of generative AI.
The following didn't surprise me.
In most companies, AI is still not a fundamental part of martech. Only 10% of companies use large language models. Another 39% have never used these tools. The remaining half (51%) are either evaluating or testing these tools.
These results reflect what I've observed over the last eight months or so: most companies don't know how to integrate generative AI and remain in experimentation mode.
This surprised me: Marketing's share of the company's budget is around 10%, continuing the downward trend of the last two years. However, the marketing budget as a percentage of sales increased from 9.2% in fall 2023 to 10.1%.
What does that mean? In most companies, marketing budgets grew more slowly than in other departments. They increased, but not as much as in other business functions.
But this really surprised me: marketing technology now accounts for 20% of the total marketing budget. And marketers expect that share to rise to 31% in the next five years.
Let that sink in.
Technology spending is expected to increase by an average of 9%, but budgets are expected to increase by an average of 8%.
CMOs seem to be indicating that over the next five years, every penny (plus a few quarters) of marketing budget increases will go to marketing technology.
Mistakes in technical strategy
Of course that won't come true. Nevertheless, the trend remains worrying.
Too often, marketing chases technology as a strategy panacea. Marketing departments typically use the latest technology to add features that become their strategic approach. They are less likely to examine their strategic approach and then figure out whether the latest technology can help them execute.
The CMO survey numbers are a clear warning signal for marketers.
But it is not a warning to stop purchasing new technologies. Marketing is changing and evolving, and there are technologies available to help you scale better and work more efficiently and effectively. It's a warning sign to realign your marketing systems.
So what do I mean by marketing systems?
Most marketing technologies are designed for a job function in a specific part of marketing. The Demand Gen team spends their time on the marketing automation system and analytics. The web team spends its time on CMS and web analytics. The email team invests their time in the email newsletter solution. The sales team spends their time on the CRM system, and it goes on and on.
Is it any wonder that companies engaged in generative AI produce hundreds of use cases, all isolated in their isolated functional requirements?
Take this big ROI step
Take a moment and look not at what you are marketing, but at how you are marketing as a business. Are you all working in technology silos? Or do you collaborate across integrated processes and workflows that go beyond technology tools?
Think about it this way.
According to the CMO survey, marketing teams use about half (56%) of the technology solutions they purchase. That means 44% of marketing technology spend goes unused.
So if you believe the finding that 20% of all marketing budgets go into technology, around 9% of the marketing budget literally ends up in the toilet. What would you do with a 9% budget increase? They would probably put it to good use.
These numbers serve as a warning – or a promise – that it's worth getting your marketing systems (operations) to work together.
It could be the biggest ROI initiative you can undertake.
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Cover image by Joseph Kalinowski/Content Marketing Institute
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
