Strategy First - Which-50 · to business outcomes, and the extent to which ... 20% 16% STRATEGY FIRST: HOW MARKETERS CAN AVOID COMMON TECHNOLOGY PITFALLS AND DRIVE REAL ROI 3. Even

How marketers can avoid common technology

pitfalls and drive real ROI

Strategy First

2019

Introduction

Technology is widely recognised and understood as a central pillar of marketing — largely because marketers rely on technology to unlock the value of their consumer data assets. But lately, we have detected a growing discomfort among marketing leaders related to the value they’re extracting from their marketing technology investments.

A number of factors are causing this unease for CMOs and their teams, who are striving to use their data to deliver highly personalised, world-class brand experiences.

These include:

• Growing recognition that marketing clouds may not always be as integrated as portrayed by the vendors,

• Concern about the skills available in the market to master the platforms, and

• Unanswered questions about the relative responsibilities of other stakeholders.

On top of it all, the dormant giant of the digital age is stirring: privacy. Scandals such as Cambridge Analytica, along with big regulatory changes like GDPR and even the local debate over My Health Record, have consumers collectively feeling that the balance is not right. Marketers have picked up on this sentiment and recognise the importance of privacy as a core aspect of brand trust.

To investigate these issues, Which-50 partnered with Cheetah Digital to test the attitudes of marketers and other C-suite leaders with a national survey. We also conducted in-depth interviews with a dozen CMOs to provide context to the results.

The results of the study reveal demonstrate the centrality of marketing technology in marketing strategy. But the results also speak to a level of dissatisfaction with current outcomes, the difficulties of technology integration, and the evolving relationship that marketing leaders have with other stakeholders — especially in the IT organisation.

2STRATEGY FIRST: HOW MARKETERS CAN AVOID COMMON TECHNOLOGY PITFALLS AND DRIVE REAL ROI

We began by investigating how well marketing technology purchasing decisions are aligned to business outcomes, and the extent to which this drives decision-making.

The CMOs we interviewed were adamant: alignment is critical to success.

The emergence of buying committees, the importance of integration and the contribution of marketing to revenue mean that an increasing number of people and factors influence marketing technology decisions — even though marketing owns the process and budget. Predictably, more than 90 percent of marketers surveyed said they are involved in scoping the

requirements, and almost 60 per cent reported that IT also plays a role in this — as do other senior executives.

One in five marketers said the CEO gets involved as well.

Other senior executives — along with finance leaders — also play a big part in the cost-benefit analysis, with more than 40 percent of marketers recognising their contribution in each case.

Not surprisingly, marketing and IT share the responsibility for testing the solutions, and the IT team takes over when it comes to running a technical assessment.

Align Technology with Strategy

Involvement in Technology Buying Decision

Q12 Who was involved in the decision to purchase, upgrade or replace marketing technology, and which teams took the lead on certain parts of the decision? Please indicate which team(s) undertook the following tasks.

Scoping the Organisation`s Requirements

IT

Marketing

Finance

Board / CEO

Snr Management

Determining Products and Vendors

Testing Solutions Technical Assessment Cost Benefit Analysis of Marketing Outcome

20%

41%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

45%

81%

9%9%

33%

54%

5%

4%

6%

4%

14%

13%

44%

59%

90%87%

85%

84%

55%66%

20%

16%


Even inside the marketing clouds that sell the idea of a single unified solution, truth is far more circumspect.


Our interviews with CMOs revealed a very clear profile of a successful marketing technology buyer.

These leaders consistently displayed the

same qualities:

• They could describe clearly the strategy they wanted to pursue;

• They could articulate how they would achieve this and the role technology would play;

• They trusted the advance of their peers;

• They made decisions quickly;

We call these successful leaders the “Skilled Revolutionaries.” We also asked interview participants to describe the characteristics of less successful leaders they have worked with — these will be addressed these as well.

Skilled Revolutionaries clearly articulate goals and the path to success

Skilled Revolutionaries have a very clear sense of what their organisation and marketing goals are. They can link that to a clear idea of the marketing programs that will achieve their goals. The leaders we interviewed said this is where many fall short.

Furthermore, Skilled Revolutionaries are able to articulate clearly the foundational capabilities and technologies needed to run those programs.

The Best Leaders are the Best Buyers

After reviewing the current systems, the first questions these leaders ask are whether they are overpaying for the capabilities required to run their marketing program and whether they are paying for unnecessary functionality.

If the answer to either question is yes, they will look for a lower cost and lower complexity platform to achieve the same ends.

They also take a close look at the problems they are trying to solve and ask what foundational capabilities are needed, which platforms have those capabilities, what they cost, and whether they are affordable from a value equation perspective. It’s very transactional, one managing director told us.

“They can make the decision very quickly.

It’s very rarely a 25,000 page RFP and they generally know who they want to buy from.”

Another key characteristic of Skilled Revolutionaries is that they engage the whole organisation in the program. For instance, finance knows how to analyze the financial impact of the change, while HR understands the availability of skills to implement the change, and IT recognises the kinds of integrations that will be necessary and how difficult these will be to achieve.

Skilled Revolutionaries are able to articulate to the whole leadership team — as well as to their own marketing group and potential vendors — why they are replacing their technology solutions.


This is true whether they are moving to a cheaper platform with fewer features or a more expensive platform with more. And they can quickly assess the return on investment those two approaches are going to generate.

The C-suite generally believes its marketing leaders have the right stuff, though it is interesting that the CMOs we interviewed separately to do not necessarily agree.

In our survey, only seven percent C-suite executives rated the performance of marketing poorly and over 40 per cent rated it very high. Unfortunately, not all marketing leaders are Skilled Revolutionaries. So what about the other marketing technology buyers, who perhaps do not inspire the same level of admiration?

The Lucky Generalists and the Habituals

Our CMO interview participants broke the remaining marketing leaders into two groups.

We call the first group the “Lucky Generalists.”

While they share some of the qualities of the Skilled Revolutionaries, they lack a clear view of the programs and struggle to articulate specifics. They don’t make the link between strategic outcomes and foundational capabilities. Some of these mid-tier leaders will go on to develop their skills and join the top tier. But others won’t.

The final group of buyers is best described as “Habituals.”

These are the executives who outsource decision making.

A number of CMOs we spoke to described new marketing leaders coming into their organisation and bringing an over-familiarity with their vendor from a previous role into the job. These are the leaders who allow that familiarity to drive the decision, rather than studying the alignment of the vendor’s platform to the organisation’s goals.

How Marketing is Regarded by Other Departments

C - Suite

All

1% 01%

2%

Very Poor (1)

Poor(2)

Mediocre(3)

Average(4)

Good(5)

Very Good(6)

Excellent(7)

Average: 4.87

C-Suite: 5.32

Q6 How is the marketing department regarded by other departments in your organisation? Where 1 = very poor and 7 = excellent;

10%

0

20%

30%

40%

8%

20%

41%

32%29%

25%

15%

9%

5%

9%


Consistently these leaders displayed the same qualities, they could describe clearly the strategy they wanted to pursue, they could articulate how they would achieve this and the role technology would play, they trusted the advance of their peers, and they made decisions quickly.


The need to better utilise the brand’s data assets and the need to improve marketing execution to deliver ROI are the top reasons CMOs revisit their technology choices.

When we asked marketers to describe the role data plays in their business today, they told us that it is king — there is no strategy without it. So it is hardly surprising that one of the biggest reasons companies gave for changing marketing technology was to get more value from their data.

This was true of both the C-suite responses and for marketers in general. On the flip side, cost was not really an issue in the decision to change technology solutions.

Brands Revisit their Marketing Technology Choices to Improve ROI

In fact, reducing the cost of marketing activities was the least important consideration in deciding to purchase, upgrade or replace technology.

And the C-suite nominated cost less frequently than the marketers! This again reinforces the idea that the focus is on the return on the investment, rather than from the size of the investment itself.

This is not to say that price isn’t important. It still rates highly when it comes to determining which solution to choose And of course it remains a key feature of any business case. But the cost of current systems does not emerge as a trigger. Instead, the lead driver is all-around capabilities (and ideally, alignment with strategy).

How Well are the Data Assets of the Business Deployed?

Q8 How true are these statements for your organisation? 1 = strongly disagree, 7 = strongly agree

We understand the importance of data,we struggle to make good use of it;

Data is king, no marketing strategy without it;

There is a poor understanding on how to use customer data;

Senior management is good at visualising marketing activity data;

Our organisation uses data to deeply personalise customer interactions;

4.2

4.0

3.5

2.8

2.6


In fact, a range of factors drives the final decision. The functionality of the platform is most important, but compatibility with other systems and the training provided by the vendor also feature in the top three. Marketers and the C-suite were in complete alignment on these priorities.

The Importance of Developing Staff Capabilities

We decided to drill a little deeper by asking what would be the biggest concern if cost and functionality were not a factor. The ease of training staff featured very highly in the result, with 60 per cent nominating this as a key consideration — one of the strongest results in the survey. Security of data and the reputation of the provider also drew the support of the majority of survey respondents.

The issue of vendor support featured heavily in the discussions we had with CMOs, as well. Many felt their provider’s level of engagement fell away considerably after purchase, or that

vendors were too eager to push them into the partner channel.

When we asked marketers from the survey sample who expressed negative sentiments about what drove that negativity, the answers came down to promises not being kept.

“Our vendor did a marvelous job of selling us

a product suite that it couldn’t support.”

“Once the sale was done I got lots of

well-intentioned words and no action.”

“Initial training didn’t meet expectations

or requirements.”

Brands also investigated how to get more value from current systems before deciding to change.

Half the marketers surveyed said they had asked their vendors to provide additional training and support prior to going to market for a replacement.

What Drives the Need to Buy/Upgrade or Replace Martech?


The C-suite, in particular, explored bringing in an external party — independent of the vendor — to provide help.

Finally, when it came to selling the change internally in the business case justification, increased productivity, improved ROI, and the provision of analytics and insights rounded out the top three.

CMOs told us their companies understand the capacity of marketing technology to drive top-line growth and are willing to invest in new systems to deliver that outcome.

Integration issues are often worse than imagined

When we asked what caused the most problems after a purchasing decision is made, the mostcommon answers were technologicalintegration and finding (and keeping) skilled staff.

The skills problem is well understood, but some marketers expressed surprised at the amount of work required to integrate new offerings into the stack — and of course into other business systems, such as CRM, ERP and ecommerce.

The CMOs we interviewed told us that even within the marketing clouds that sell the idea of a single unified solution, the truth is far more circumspect.

Many marketing clouds are amalgamations of products acquired over several years, which do not always integrate well — even inside a vendor’s own cloud.

Interestingly, some marketers said they find themselves facing another integration challenge: trying to convince the IT department not to do every integration themselves when there are off-the-shelf solutions that can accelerate the work.


One of the biggest reasons companies gave for changing marketing technology was to get more value from their data.


One of the most important relationships to evolve over recent years is that between marketing and IT. It is a topic we investigated through both survey questions and interviews with CMOs.

While there is an acknowledgment that the relationship with IT has improved, there is still much to be done. One in five marketers still rate the relationship with the IT department as a fail (a score of 1 to 3 out of 7). That number climbs to more than half if you include those who gave the relationship a bare pass mark.

Asked to describe the cause of the problems, marketers cited:

• A lack of clarity about responsibilities (and the subsequent finger-pointing);

• Technology project bottlenecks;

• Poor integration between systems and IT’s unwillingness to use contemporary integration solutions;

• The impact of the corporate technology debt which has built up over time and makes integration into new systems difficult, or even risky;

As technology becomes more central to the success of marketing, the relationship with the IT department has gained greater currency. We asked marketing leaders to describe the changes they have seen in IT leadership over the last decade.

The Marketing and IT Relationship is Evolving

The good news is that, while there is still some potential for misunderstanding, the outlook is positive — at least among successful CMOs.

In fact, several CMOs offered that this greater alignment with IT was an important driver of their own success. It’s important to first understand why marketing and IT see the world differently. For much of the last 40 years, IT departments selected, installed and managed internal productivity tools for their organisations. Typically these platforms served a large number of unskilled users who needed to enter and manipulate information to do their daily jobs.

It becomes more difficult for IT leaders when they need to select, install and assist with specific platforms that will be used by a smaller number of much more skilled users — and when those users generate a great deal of value to the organisation.

Marketing technology and business intelligence tools (used by the finance department) are good examples of these platforms.

In the traditional IT world, the end-user just got what they were given and they weren’t really in a position to push back.

This proprietary lock on the platform choice was also a function of the fact that software typically ran in on-premise hardware, which the IT department controlled.


However, in marketing technology, the end-user is more likely the decision-maker, since they are also the value creators.

In this world, IT could never really gain the depth of knowledge to make decisions about the selection.

Interestingly, while the evolution of the software-as-a-service model may have put more decision-making power into the hands of CMOs, it is now also bringing the CIO back into the fold.

IT is re-engaging with marketing technology as companies focus on the requirement to keep consumer data secure and ensure its use meets ever-evolving privacy regulations.

That’s because a marketing technology solution delivers the best result when it is tightly integrated with both the marketing technology stack and other core systems.

How Well Marketing Understands Martech’s Fit with Other Tech Infrastructure

Data governance, user governance and security run horizontally across all platforms and, as the need to drive more personalised customer experiences has emerged, leadership in these areas brought IT back into the game.

Contemporary IT teams are now learning to drive horizontal decisioning across all platforms without the need to develop vertical expertise.

The CMOs we spoke to see this as a positive result, rather than as a challenge to their authority, because ultimately the customer — and therefore the brand — wins when systems are tightly integrated, always available and very secure.


One in five marketers still rate the relationship with the IT department as a fail (a score of 1 to 3 out of 7) and that number climbs to over half if you include those who only gave the relationship a bare pass mark.


Trust is central to a brand’s value.

As marketers strive to gain greater insights from consumer data, their approach to privacy and their efforts to keep that data secure become even more important.

Yet the marketers surveyed say their peers lack an understanding of the issue, and in many cases don’t seem to care about it.

The desire to provide their customers with genuinely helpful and personalised experiences sits high on the wishlist of many CMOs and marketing departments

Personalisation also Requires a Commitment to Privacy

Personalisation has been a big driver of marketing plans in recent years, but rapid changes in consumer sentiment amid a growing number of privacy scandals has left many senior marketers feeling like the ground has been pulled from under them.

The scope of regulatory changes like GDPR in Europe impacts brands worldwide. Many marketers admit to treating GDPR as a default, as they assume the regulatory environment is likely to get tougher in the future, not easier. But one marketer cautioned,

“A reflex reaction to GDPR is to follow rules rather than understand the why.“


Instead, this marketer said companies need to focus on communications that provide value to customers — not to the company. “Value is the currency, personalisation is a vehicle, privacy is a gate. With the right value, you can always get where you want to go,” the marketer said.

However, the evidence from our survey group suggests that, while marketers are on board with the new consumer privacy mindset, they are running into either resistance or disregard beyond the boundaries of their own department. We asked marketers if there is poor understanding of the challenges of privacy and personalisation outside the marketing department, and we received indicative responses like these.

“Not all departments understand how marketing

requires data to be able to provide a personalised

and relevant experience to customers. They also

don’t understand the different methods we use to

collect data, such as progressive profiling.”

“In theory, everyone understands, but we get continual questions with people trying to break

the SPAM Act, asking why we can do certain things but not others.”

“It’s at the core of what Marketing does, but teams who do not directly deal

with customers are less aware.”

“Most departments are unaware of the capabilities of marketing automation and online

advertising, and other departments aren’t exposed to data capture/data points,

nor do they care to know or understand

the value it has.”

Marketers, however, did acknowledge that they have a natural ally in the privacy debate inside their organisations. IT departments understand the issue, even if they tend to view it from a data security perspective rather than a brand value perspective.

Legal and Risk, however, were largely seen as having a ‘tick-a-box’ mentality, which made innovation more complicated. One marketer expressed surprise to us that, “Our business development team did not ask basic questions around data and privacy for a recent software project.”


The dormant giant of the digital age is stirring: privacy.


The Skills Gap Remains a Big Problem

Finally, the issue of access to skills remains as challenging as ever. CMOs told us that a scarcity of skills in the Australian market for some popular marketing technology tools creates risk for them.

They also complained that the post-sales support from vendors can be poor.

Finally, the issue of access to skills remains as challenging as ever. CMOs told us that a scarcity of skills in the Australian market for some popular marketing technology tools creates risk for them. They also complained that the post-sales support from vendors can be poor.

Importantly, they acknowledged that marketers have often been their own worst enemies in the past — for instance, if they failed to scope sufficient training adequately into the business plan.

CMOs told us that they believed part of the problem is the difference in scale between the Australian market and the North American market, from where many marketing technology clouds herald. US marketing tech vendors, they say, design their products for a much larger market, where skills are more abundant and many brands have marketing teams that are large enough to build in redundancy.

That is often not the case in Australia. Instead, as one CMO told us, “When someone on the team leaves, that’s when you learn whether you have really built capabilities rather than just hired skills.”


• Aligning the marketing strategy to the technology choice is critical and this is reflected in the finding that 90 percent of marketers say they are involved in scoping the requirements. But they also rely on the subject matter expertise of peers in other departments.

• The best marketing leaders put strategy first. They understand and can clearly articulate how various marketing technologies can help deliver that strategy. They will invest more

in new solutions that offer a better outcome just as readily as they will replace current

solutions with cheaper, more commoditised services when it makes sense.

• Marketers want to be able to plug and play with all the elements in their technology

stack, but they are frustrated by the difficulty of many integrations — both within popular marketing clouds and between marketing and other technologies.

• The seamless flow of data across the enterprise is necessary to deliver great experiences for customers. To do this marketers need allies — especially in the IT department. Our

research suggests that a disconnect between marketing and IT mindsets remains,

though the relationship is evolving and improving.

• Marketers know that the data-driven marketing world requires the consumer trust and

demands recognition of the consumer’s right to privacy. Marketers need their peers in

other departments to understand that data privacy and protection are not merely about

compliance — they are absolutely critical to creating trust and loyalty.

• Successful businesses place as much focus on hiring the right people as on partnering

with the right vendor. And they typically have an internal product owner who is responsible

for the adoption and utilisation of the tool, ensuring a high level of accountability.

Key Takeaways


The Which-50 Digital Intelligence Unit is a division of Which-50 Media. It provides strategy, advice, execution, distribution and analytics around content services for organisations involved in business

transformation.

Cheetah Digital’s enterprise solutions help Marketers build lifelong, loyal and profitable relationships with their customers.

Our Customer Engagement Platform empowers batch and real time first-party data to be activated within our Messaging and Loyalty Solutions. Both create hyper-personalized

interactions across a variety of online and offline channels, driving increased retention as well as profitability. These solutions help create experiences that move customers from acquisition

to emotional loyalty.

Over 2,100 companies across the globe, including American Airlines, Williams Sonoma, Hilton Hotels, Citibank and Vans, rely on Cheetah Digital to help them better deliver more relevant

offers, communications and experiences.

Cheetah Digital was recently named a Leader in The Forrester Wave™: Loyalty Technology Platforms, Q2 2019, and a winner of the 2019 Loyalty360 Top 10 Awards in the Top 10

Technology category.

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Strategy First - Which-50 · to business outcomes, and the extent to which ... 20% 16% STRATEGY FIRST: HOW MARKETERS CAN AVOID COMMON TECHNOLOGY PITFALLS AND DRIVE REAL ROI 3. Even