STORIES

MarTech :

Marketing Transformation – The MarTech Effect

By: Lisa Horwich @ Pallas Research

I get a lot of newsletters in my inbox these days and many of the headlines read like this:

“Learn How to Engage with Customer Using AI”
“The Key for Data-Driven Marketers? Real-time Customer Analytics”
“Artificial Intelligence is Ever More Critical to Brand Strategy”

This led me to want to learn more about Marketing Technologies like AI, Machine Learning and Real-Time Analytics and why companies are investing large amounts of their overall marketing budgets on these MarTech tools. I was also fortunate enough to be invited to speak on the topic at the latest QRCA Conference in January.

As I mentioned in an earlier article the folks at Gartner predicted CMO’s would spend more on IT than CIO’s by the year 2017. Not only did this prediction come true, it happened a year earlier than expected. In addition, Marketing departments are spending more on MarTech than they do on any other expense line item – that means more than they spend on Agencies, Paid Media and Labor.

If you are anything like me this leads to an ever-important question…. why??? What has changed in marketing that could account for this shift in spending?

There is no one thing that accounts for the shift, but rather three primary drivers:

Most CMO’s now share P&L responsibility – instead of just being a ‘cost center’, Marketing is looked on as part of revenue generation.
Marketing funds and designs cross-functional Customer Experience (CX) initiatives, along with ‘owning’ the digital commerce channel. If you think of CX as a whole from generating awareness until post-sales feedback, it makes sense that marketing is in charge.
Finally – and arguably most importantly – with the soaring costs involved in attracting, maintaining and growing the customer base, marketing now has to justify the ROI (return on investment) of their activities.

Resulting from this increase in MarTech spending is a rapid rise in companies offering solutions. In just the past seven years, the number has gone from 150 in 2011 to over 7,000 last year.

What types of solutions are their companies offering? The nice folks at Chiefmartec organized them into six categories:

Advertising and Promotion
Content & Experience
Social & Relationships
Commerce & Sales
Data
Management

Here’s a larger image of last year’s companies:

In subsequent chapters we will deep dive into some of the technologies and the impact they have on traditional marketing disciplines, especially market research.

ABOUT THE AUTHOR

Lisa Horwich - Pallas Research

Lisa specializes in sophisticated, strategic market research and competitive intelligence. With over 15 years of marketing experience, including communications/brand management and product marketing, Lisa uncovers the ‘why’ behind data helping companies get the information they need to make smart decisions. Lisa specializes in business-to-business research helping companies understand their customers’ point of view through data analysis, focus groups and in-depth interviews.