Another Year, Another Giant Marketing Technology Supergraphic: Chief martec released it’s annual martech landscape chart last week. The martech universe grew again – up 39%, to a total of 5,381 solutions. Just six short years ago, there were about 150.
With all these new tools, you might think that marketers are achieving better results than ever. And that CMO job turnover must be close to zero. In fact, if you visit most martech sites, you see a lot of quotes from marketing pros to the effect that this tool or that tool delivered “real ROI” or “quantifiable business impact.” But you don’t see quotes from CEOs, CFOs and board members to substantiate those claims.
So, who gets to define marketing success?
As we’ve all read, 2016 saw a record number of CMOs fired, and despite all the technology available. Few are embracing data-driven analytics that connect their work to revenue or other business-level results.
Recently an Accenture practice leader spoke in San Francisco about martech adoption, estimating that 60-70 percent of purchased martech is either sitting on the shelf or deployed only minimally. This number was echoed by Kevin Green, who has led big marketing ops organizations in companies like Dell. Earlier this spring, he reported that 61 percent of marketers have substantial amounts of “sub-optimized” martech software purchases. He related that number to an article in CIO that indicated that 37 percent of all software investments are shelf-ware.
If we assume that the 37% waste applies to marketing technology investments, then it’s safe to say that CMO’s will waste about $10B in 2018. (projected marketing technology spend in 2018 = $32.3B).
Let’s say that this number is high, even very high. So we’ll arbitrarily cut it in half to $5 billion. The opportunity cost on that sum is still huge. For example, how much would $5 billion increase earnings per share in the impacted companies?
The ramifications of this number are profound. Top analyst firms like Forrester and Gartner clearly have been proven correct about CMOs being the biggest buyer of technology today. But if almost 40 percent is underutilized or not deployed, then the narrative is considerably different.
Let me be very clear – the vast majority of these tools have great value. They just have value in their own specific niche areas.
They generate a lot of much needed data. The problem for marketers – and one that CEOs are growing keenly aware of – is that almost none of these 5300+ solutions deliver any insight into business impact and business value.
The industry needs to act before the many millions spent on martech become for marketing what Y2K was for IT.
Against this backdrop, colleagues and customers ask me where Proof sits in the marketing technology landscape. The short answer is that Proof is not part of the martech landscape.
Proof leverages data from across martech, sales tech, comms tech, ad tech, and other business tech. We also pull in third-party market data – for many of our customers.
This is all about understanding the effect of headwinds and tailwinds on the relationships between marketing, communications and sales. The data from all these disparate tools can be fed into Proof’s engine. Crunched with other internal and external data, and turned into calculated results that show whether the marketing effort worked or not.
Let’s look at video marketing for example. It’s a hot area of investment for CMOs, and several vendors are listed in the new landscape graphic. There is plenty of data (mostly from the vendors) that says using video in your emails increases open rates and ultimately increases leads. That’s important.
You can collect all kinds of data about how many people watched your video and for how long or how many of them shared it with someone else. Also good.
But does that mean that video, which is not a cheap investment on a tight marketing budget, ultimately contributes to revenue growth, profitability or cash flow improvement? And if it does, how long does it take to produce that impact?
If you aren’t using Proof, you can’t answer these sorts of questions. As we’ve seen in the past 15 months, that’s increasingly unacceptable to C-suites and board rooms.