Foundation Capital General Partner Ashu Garg predicts that over the next 10 years, marketers will spend 10 times what they currently spend on marketing technology. Specifically, he wrote in “MarTech and the Decade of the CMO,” that the $12 billion that CMOs currently spend on martech will grow to $120 billion by 2025.
For CMOs, this shouldn’t come as a surprise. We all know that the need for organizations to drive superior customer experiences is greater than ever. Brands need to be personal and contextual, while at the same time being efficient and finding new ways to innovate and differentiate.
Expansion and Consolidation
The good news is that there are more technology offerings available than ever before that claim to help companies achieve these goals. Scott Brinker’s widely shared supergraphic of the 2015 martech landscape shows a market doubled in size from just one year ago.
While the industry has grown, it can just as quickly consolidate. We have already seen the beginnings of this, but can expect to see more of what happened previously with ERP and CRM -- a shift from point solutions to integrated suites. This means the platform players will gobble up many of those start-ups and best of breed technologies. We’ll see technology increasingly converge across areas as customer experience emerges to cut across sales, marketing, service and potentially more.
What Does This Mean for the CMO?
Marketers need to take a step back and think about what this means for them and their organizations. The CMO’s purchasing power will continue to grow, with spend shifting more and more to digital.
Which brings us to the Chief Digital Officer's (CDO) role. With much talk around this new role -- and whether it’s the future or just a fad -- some predict CDOs will own the bulk of this budget. However, digital will still fall within the CMO’s reign. Marketers and the departments they reside in are evolving to adapt to the digital climate -- adding a new role to manage this would be redundant and not very strategic. But to survive and thrive, CMOs need to hire more data-savvy marketers.
They also need to buy marketing technology. But, to truly compete and connect with prospects and customers better, marketers shouldn’t rush out and select just any of the more than 1,800 vendors out there to fix their marketing or customer experience challenges. Start with an understanding of where the brand wants to compete and a strategy for how to address that. Then decide where technology is required to serve the need.
For example, if a brand serves a market with a small number of potential customers, automation may not be a big deal for volume, but it may need a way to tailor its web and mobile presence to specific companies and even specific individuals in that company. If an organization serves multiple geographies, it should consider local and cultural differences and how to address those needs. The bar is constantly being raised so it is more critical than ever to ensure technology agility.
The important thing for CMOs looking to positively impact their organizations in 2015 and beyond is to forecast ahead and plan. Don’t just buy a technology solution to address a current pain point, without examining how it fits into future plans and the company’s overall customer experience strategy.
Be the change agent within the company to not just fix marketing problems but to proactively identify new areas where technology can benefit the customer. As marketing becomes more accountable for its investments, a strategic eye toward technology purchases will pay dividends for both the company and the customer in the long run.