Martech investments are on the rise (again). According to a recent Gartner study, investment in martech currently makes up 29% of the average company’s overall marketing budget. Technological investment has even surpassed the 24% budget allocation for in-house marketing labor. CMOs and senior business leaders, therefore, see martech as highly effective, but are they focusing too little on their employees?
Martech experts weigh in to explain why companies are investing in martech more, and whether human capital is less important than technology for businesses today.
Are Martech Investments Effective?
There’s no doubt martech is useful, but many are questioning whether technology justifies the costs. “Without a mature martech stack companies cannot compete in the marketplace effectively or efficiently,” said Jeffrey Fleischman, CMO at Altimetrik. Choosing martech solutions, however, isn’t just a matter of checking off a box, but entails building the capability to deliver engaging digital experiences that fuel sales and customer retention and loyalty. That’s why marketers should focus less on the ROI of martech and instead determine whether the investment is necessary to support the company’s business strategy and drive positive business outcomes.
That said, there are some KPIs that measure the business outcomes of martech. “Today it’s easier to leverage sophisticated content and optimization tools to launch and test go-to-market strategies, and understand what’s working best or uncover new learning in real-time,” said Fleischman. It’s no longer necessary to wait weeks or months for the results of a marketing campaign because martech drives measurable and tangible results. That means companies can adjust their digital marketing strategies in real-time to achieve a higher ROI on their technological investments.
Wesley Ward, head of marketing & merchandising at Hausera, agrees that martech is critical for most modern businesses, and digital commerce companies in particular. But he believes the ROI of any technology investment depends on a number of factors. “The results vary by the size of the business and the type of martech solution being used,” he explained. Marketers, therefore, should measure each individual martech solution in the context of their broader digital experience ecosystem.
Polly Kay, senior marketing manager at English Blinds, believes martech investments are worth it. “[However,] the full martech suite is highly diverse, identifying the ones that will provide value for you and discounting those that will be of limited usefulness is not always simple.” Ward said businesses, “should only be purchasing martech solutions if they believe the solutions can lower cost of acquisition, improve customer lifetime value, improve marketing spend efficiency or reduce cost.” It’s not just about investing in martech solutions, but making smart investments in technologies that marketers can actually leverage to benefit the company.
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Where Human Capital Fits in
While martech may be a necessity in the digital age, it’s still crucial that companies hire, retain and train marketing professionals to see any real success with their campaigns. “Martech is only of value when overseen by knowledgeable marketers because martech can provide insights and assist with the execution of campaigns, but it can’t do the thinking for you,” said Kay. Companies, therefore, need to invest in training their employees to use martech effectively and cannot assume technology will drive results on its own.
“Too often the easy part is buying new technology or data tools, but the devil is in the details,” said Fleishman. These details include a deep understanding of the company’s target market and end-to-end customer journey so that marketers can choose the right technologies. With this in mind, Fleishman has no doubt that “martech is giving employees incredible leverage and bandwidth to accomplish far more than ever before.” But software is increasingly sophisticated, so they can’t be used to their full potential without proper training and expertise.
“Much as is the case within other industries where automation has erased many traditional roles, martech hasn’t negated the need for, nor the value of human capital — it has just created new needs and roles in place of the ones it has replaced,” said Kay. Technological innovation often makes companies question whether employees remain necessary, but it’s likely that there will always be tasks only humans can accomplish.