Research: Marketing Tech Is Broken. Here's How to Fix It.
Marketing leaders told us that they intend to spend 24% of their budgets on martech this year. Nearly a third (31%) of survey respondents noted that marketing spend on martech five years from now will increase by 55%. Few companies are unaffected by martech, and these budgetary trends suggest that its influence is accelerating.
In response to the question, 'How much impact are your current martech tools having on your company's performance?' the marketers reported an impact-score of 4.7 on a 7-point scale (1 = not at all and 7 = a great deal). A concerning 49% told us that their expected outcomes aren't matching the technology's real-world impact. They also told us that 44% of purchased martech tools remain unused.
The stark contrast between the large and growing investments in martech and its uneven performance raises two questions: 1) What factors underpin this gap, and 2) How should companies systematically manage their martech activities? Our findings suggest that the investment-performance disconnect arises from an overemphasis on martech's operational aspects when compared to its organizational ones.
The Martech Organization Report Card
To help redress this concern, we offer the Martech Organization Report Card. It summarizes the organizational 'best practices' for driving martech usage and effectiveness. It offers a systematic approach to identifying and remediating specific impediments to martech's integration into the company based on self-reported measures. Companies can benchmark their martech integration strategy on these ten best practices to help improve organizational elements.
1. Refocus attention—look past budget.
The CMO survey indicates that martech spend and performance are not related—more spend does not lead to more performance. This means that leaders should look past spending and think more about how they can better leverage these systems.
2. Pursue the right goals.
Leaders adopt martech for many reasons, including some problematic motivations like imitating a competitor or a fascination with shiny new marketing technologies. Our survey contrasted these motivations against those with stronger strategic intent, such as alignment with company objectives and strategy and enhancing customer value.
Results reveal that when organizations implement martech for strategic reasons they experience 20% higher usage rates and substantially greater impact. This premium likely emerges because strategically-sound motivations can position martech as a valuable decision-making resource rather than another marketing toy. A strategic focus is often more easily embraced.
3. Increase the reach of martech across the company.
Martech can be siloed into marketing. But marketing is typically more effective when tightly woven into the operations of the broader organization.
To test this idea, we measured how well martech tools enhance the performance of each part of a company's strategy across six strategy areas: marketing, CRM, sales, CX, customer insights, and operations. In some companies, only marketing and CRM benefited, while in others, the average performance benefits were more evenly spread across the six areas.
Results show that when martech's benefits are deployed company-wide, its overall organizational impact increases from 4.2 (narrower focus) to 5.4 (broader deployments) on the 7-point impact scale. To achieve cross-functional use, you should involve managers from across the company in martech adoption and goal setting. You should also increase training on the use of martech in each functional area.
4. Get the right people involved.
Survey data indicates that companies are not prioritizing martech talent. When asked to 'Rate the event to which you focus on the following activities when managing your martech strategy,' the lowest performing area is 'Hiring or retaining talent for managing/implementing martech strategy. Respondents rated retention 4.1 on the 7-point scale. By contrast, 'Optimizing or streamlining existing tools' commands far greater attention. Marketers rated it 5.3.
This imbalance needs addressing. Martech's objective value may weaken and its perceived credibility may be undermined if you haven't assembled the right team. Getting the most out of new martech solutions requires leaders to cultivate an always on-culture for learning and development. They should also establish dedicated programs for onboarding and productively using these solutions.
5. Bring genAI to the martech table.
Companies told us they use genAI in 15% of marketing activities, on average. Above-average users use genAI in 32.1% of marketing activities, while below average users leverage it only 4.3% of the time. Above-average users also experience a significantly higher (10-20%) martech impact score. For this reason, genAI and martech appear to be complementary assets. They make each other stronger and are often part of the same systems. Sadly, we heard of a marketer who builds a 27-step process to publish a single blog. That is totally unsustainable and unnecessary with genAI.
6. Empower marketing leadership.
A striking difference emerges in martech effectiveness based on leadership. In organizations where marketing leads martech initiatives (66% of companies surveyed), the impact is 25% higher than in those where other functions lead, including IT. This disparity highlights the value of a marketing-centric approach. Marketers' customer-focused perspective can foster more effective identification and deployment of technologies to address specific customer pain points and opportunities.
7. Include metrics for long-term impact.
Companies use a range of martech metrics. Some are short-term, such as lead generation, lead conversion, and content engagement. These are used by 60% or more of the companies surveyed. Some are long-term, such as customer satisfaction, loyalty, and lifetime value. These are used by half as many companies.
Companies who focus on longer-term metrics realize a greater lift in the impact of martech relative to the lift from short-term metrics, which makes the emphasis on short-term metrics surprising. If 'what gets measured gets managed' holds, the longer-term focus on customer relationships over transactions should equate to managers focusing on generating repeat business and loyalty for the company.
In addition, measures convey value. If martech focuses on tactical or short-term activities, it could be viewed as less valuable inside the company. Over time, this will likely undermine martech's credibility as a powerful strategic platform.
8. Infuse creativity to bolster martech impact.
Companies increase martech's effectiveness when they infuse it with creativity. To test this idea, we assessed leaders' responses to the question 'My organization's long-term success depends upon its ability to foster creative ideas that can transform the business' (where 1=strongly disagree to 7=strongly agree) and examined how they influenced the performance impact of martech. Results show that martech impact improves as creativity ratings increase. This is most likely to occur when the focus is on elements of the brand, social, and/or CRM strategy.
9. Keep a customer focus.
Tech systems can assume a life and entitlement of their own. One can become distracted from the key purpose of generating more revenue and lowering costs. To test this idea, we asked corporate leaders questions regarding their customer focus, such as the degree to which their company 'has clarity around identifying who your most engaged customers are,' 'can harness data focused on your most engaged customers,' and 'effectively use insights to manage your most engaged customers' (where 1=not at all to 7=very well). In all cases, companies that score higher on these customer-focused strategy tasks report higher martech performance.
10. Audit martech systems regularly.
Martech acquisition requires considerable effort and expense, and it's not uncommon for companies to have large teams or groups evaluating potential technologies for adoption. Once purchased, however, companies less commonly attend to the technology. While 'set it and forget' is easy, it commonly fails owing to non-use or gaps in the tech stack and rapidly shifting innovations in the space.
When asked, 'How regularly are your company's martech tools audited and evaluated, only 30.9% of respondents perform audits at a cadence of six months or less. Yet we find that martech impact drops significantly when companies wait more than a half year to evaluate. The inquiry, data, and discussions that surround evaluation are as important as the audit. The discussion coordinates martech's goals and reminds participants about its proper use. Done well, performance evaluations can remediate martech deficiencies and aid in the decision to cut underperforming components. Importantly, the audit can benefit from use cases and in-motion martech initiatives.
. . .
Companies are increasing their martech spend because it has the potential to increase customer demand and lower costs. Our evidence suggests that the realization of these benefits is, in part, due to whether martech is integrated into the fabric of the organization. Our Martech Organization Report Card offers leaders across the company a framework to take stock of their investments to optimize their impact.
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