Today's enterprises invest billions of dollars in marketing technology. But who controls the budget and owns decisions?
The Chief Marketing Officer (CMO) role has been around for a while now, but as more and more marketing activities are carried out in the digital space and with the help of technology, Chief Marketing Officers and Chief Information Officers (CIOs) have found themselves sharing the need to invest in technology.
As a result, the clear lines of division between roles and responsibilities are increasingly blurred.
For instance, CIOs are generally responsible for evaluating and implementing technology solutions for the enterprise, yet CMOs leading marketing initiatives have a vested interest in many of these solutions.
Who should bear responsibility for selecting and investing in a content management system, for instance? What about customer analytics tools, marketing automation, and customer relationship management (CRM) solutions?
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MarTech Spending Grows Across the Spectrum
CMOs spent $179.8 billion on paid media in the U.S. alone in 2014, and Gartner predicts that CMOs will outspend CIOs on IT by 2017. Some experts predict that spending on marketing technology will reach $120 billion by 2025, while mobile advertising spend is projected to hit $31.1 billion by 2017, with search advertising comprising approximately half of that total.
These increased spending trends point to the importance of technology as the cornerstone of modern marketing. According to Gartner's survey, companies are readily adopting new technologies for functions including:
- Customer Relationship Management (CRM): 56 percent have fully adopted; 32 percent partially adopted. Just four percent of respondents indicate that they have no plans to adopt CRM.
- Digital marketing: 48 percent of respondents have fully adopted digital marketing technology, while 35 percent have partially adopted digital marketing solutions. The remainder is evaluating providers or have plans to do so in the next two years; again, just four percent have no plans to adopt digital marketing technology.
- Database marketing: 46 percent have fully adopted database marketing tools; 30 percent have partially adopted a database marketing solution. Six percent of respondents have no plans to adopt database marketing technology.
- Marketing automation: 39 percent have fully adopted marketing automation, while another 39 percent have partially adopted this technology. Seven percent of respondents have no plans to implement marketing automation.
- Customer analytics: 26 percent have fully adopted customer analytics tools; 42 percent have partially adopted this technology. Thirteen percent report having no plans to do so.
Other technologies investigated in Gartner's survey have been adopted by fewer organizations to date, including mobile marketing (15 percent) and E-commerce tools (27 percent), although growth continues in these areas as well.
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CMOs Generally Command Budgets and Decision-Making on MarTech
With CMOs making investments in multiple technologies that support marketing, it's no surprise that there is some question regarding where the responsibility should lie for selecting, implementing, and managing the use of these technologies within the enterprise. Currently, CMOs bear responsibility for making most marketing technology-related decisions among enterprises:
- Marketing bears responsibility for selecting and managing marketing service providers at 83 percent of enterprises.
- Marketing chooses technology providers at 71 percent of companies.
- Marketing has control of the budget for consulting and design of marketing-related software at 75 percent of companies and for purchasing software-as-a-service at 47 percent of enterprises.
- At 43 percent of companies, marketing also controls the budget for external hosting of technology required to run any marketing-related software.
Both the CMO and CIO have an interest in impacting decision-making in technology, but they are driven by different motives.
CMOs vs. CIOs: Conflicting Motives
For CMOs, the importance of having control over such technologies enables them to select and implement the best tools to support marketing processes. They want to create a positive, engaging experience for their company's audience that's consistent across marketing channels, which are also increasing in number and devices.
They want to empower their marketing teams to adapt readily to ever-changing consumer demands and preferences, and they don't want to rely on IT in order to do so. In other words, CMOs are drawn to solutions that enable marketing to truly command marketing functions, in contrast to the culture of old in which marketing had to send requests to IT and wait for the IT department to have the bandwidth to address needs or implement features.
A growing variety of vendors in nearly every marketing technology category offer myriad features and benefits, and selecting the right tools for the job has a substantial impact on productivity and results.
For instance, there are dozens of business intelligence and analytics tools that fuel marketing programs with actionable data about their target audiences, competitive landscape, opportunities, and more. For CIOs, however, the interest is primarily focused on risk management and security. When CMOs implement solutions that facilitate better marketing outcomes yet introduce vulnerabilities in the enterprise network, conflict between roles is inevitable.
The Future is Collaboration
It's abundantly clear to most MarTech thought leaders that the only real solution to the conflicting motives of CMOs and CIOs is better collaboration. Effective collaboration can also help to break down silos, which has proven beneficial in other facets of modern enterprise operations as well, such as the integration of data and analytics across departments such as sales and marketing.
The better the modern enterprise is able to break down silos and promote streamlined information sharing, communication, and cooperation, the more effective the organization at meeting its objectives while keeping everyone happy (executives, departments and team leaders, employees, and customers).
It's not possible for the modern-day CIO and CMO to work in isolated conditions. Without input from the CIO, CMOs could implement technology that may prove disastrous for the company's security posture. Likewise, CIOs may not choose the best marketing technology without a clear picture of marketing's strategic direction, marketing goals, and business requirements. Plus, MarTech often produces greater volumes of useful data, yet IT can play a valuable role in managing data and translating raw data into actionable insights.
"That’s why many CMOs are waking up to the fact that IT can’t be treated like a back-office function anymore; rather, the CIO is becoming a strategic partner who is crucial to developing and executing marketing strategy," Matt Ariker, Martin Harrysson and Jesko Perrey explain in an August 2014 article from McKinsey.
Working Towards a Better Partnership Between Marketing and IT
Enterprises able to facilitate true partnerships between CIOs and CMOs and between IT and marketing as a whole stand to reap tremendous benefits: "Companies that are more data-driven are five percent more productive and six percent more profitable than other companies," according to a 2013 report from McKinsey. Authors Stefan Biesdorf, David Court, and Paul Willmott identified three key challenges, several years ago in 2013, that are arguably even more relevant today as enterprises strive towards better collaboration between CIOs and CMOs.
If your organization is seeking to cultivate a better relationship between marketing and IT functions and effectively create shared ownership of marketing technology investments and assets, these three key challenges serve as your roadmap for success:
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- Always map your investment priorities to your business strategy. What areas of focus hold the most promise for boosting revenues? Rather than make huge investments in technology and infrastructure to analyze all data, for instance, identify the key performance indicators (KPIs) that will best drive results and focus on these areas first to minimize total costs. And, by prioritizing investments based on real business needs, you'll get better engagement and buy-in from key executives and top-level management.
- Find the balance between speed, cost, and acceptance. Don't rush to implementation or prioritize minimal costs and end up with a solution that doesn't work well in practice. Ultimately, you'll spend more cleaning up such mishaps anyway than you would have if you had conducted comprehensive planning in the first place.
- Maintain a focus on frontline engagement and capabilities. Your technology must be end user-friendly. Include the front-line users of any technology in the planning and decision-making process to ensure that new solutions won't merely interrupt established workflows or, in some cases, be too complex for users to adopt or use effectively.
While CMOs and CIOs have conflicting motives, and both have a vested interest in ownership in technology decisions, there's a far greater value to be had with effective collaboration and shared ownership in both marketing technology and the underlying infrastructure that supports it.