Coming to terms with marketing technology
- 22 September, 2014 09:32
Much has been written about the evolving and converging roles of CIOs and CMOs since Gartner thrust the issue to the fore in January 2012 by announcing that the CMO would outspend CIOs on IT by 2017.
The rise of the marketing technologist function is being driven by two factors. The first is the relentless march of technology to the point where technology now underpins most business functions.
But the cycles at which technology functions operate – involving long projects and solid governance – do not apply in the short-cycle, rapid innovation world of marketing. Therefore marketers have felt compelled to take responsibility for their technology needs.
The second and perhaps more profound driver of marketing IT spend has been the realisation by many organisations that their customers are actually important – and therefore spending money on systems to attract and retain them is important.
This was highlighted in IBM’s report Stepping up the challenge - CMO insights from the Global C-Suite Study, released earlier this year, which found customers had risen from the eighth most important concern in 2004 to be the one now.
Regardless of the reasons, the changes have left many CIOs needing to learn about a baffling array of technologies and products released with ever-increasing velocity. Indeed, the marketing technology blogger, Scott Brinker, has counted 947 different companies that provide software for marketers – up from just over 100 in 2011 – and by his own admission, his list is not comprehensive.
IDC has also completed a full accounting of marketing technologies, identifying 78 separate categories within that group. Group vice-president for IDC Research, Richard Vancil, suggests the best approach for any CIO wanting to familiarise themselves is to start with the areas and relationships they know best, by stepping in to those deployments that have inter-departmental impact or dependencies.
“The largest issue is tying together customer records that originate in marketing and then get passed on to other IT systems, such as CRM systems in the sales area,” he says.
“If there is no ‘single version of the truth’ for that customer record, and no sense of master data management, then it will be very difficult for marketing and sales to reconcile their mutual or separate contributions to creating a customer.”
The vendor community has attempted to provide some of this integration, through marketing automation tools such as Marketo and Eloqua. Platforms of technologies are also being pulled together, such as the Marketing Cloud solutions created by technology heavyweights Adobe, Salesforce.com and Oracle.
Managing partner for the technology agenda at Deloitte, Robert Hillard, says many clients are taking on this challenge themselves, bringing offerings from many suppliers together with CRM to create ‘customer platforms’.
“It is really important CIOs understand not just what the technology providers are doing, but are also thinking about the long-term trends,” he claims. “We are moving from CRM in the cloud to customer platforms in the cloud that enables a whole ecosystem of providers on top of them.”
A need for speed
The schism existing between marketing and technology is due, in part, to the speed at which the two groups operate. The often ephemeral nature of marketing projects has resulted in much faster project development and execution – almost the opposite of traditional IT.
According to Vancil, marketing departments have often operated in a style that resembles the agile development methodology now being adopted by many software development teams. Agile eschews the lengthy requirements and documentation stages of traditional waterfall development in favour of fast iterative deployment with constant testing and revision.
“Marketing's work is less predictable and less routine,” Vancil says. “Contrast this with the work of the IT department which by its nature must be predictable and routine, steady and secure. And so there is a cultural and work-style mismatch, at a very fundamental level, between IT and marketing.
“Each side of the table should be patient, tolerant and understanding of this. If they stand in the shoes of the other department, they will understand how they work the way they do.”
But that still leaves CIOs with responsibility for pulling all the pieces of the new toolset together. According to Accenture Australia’s technology lead, Jane Livesey, this means more than just improving core skills such as security and data integration.
“There is another set of skills, which is about how we architect in this environment,” she says. “This is because the solutions getting implemented are typically more SaaS-based. The skillset needs to be agile and responsive, but we also need to be able to facilitate that end-to-end and more structured capability. And that’s quite a skill.
“The concept of sticking with what they have is not always feasible in such a dynamic environment, particularly when they have a business that wants to consume technology at a far more rapid pace than ever.”
Vice-president and research director at Forrester Research, Frederic Giron, says IT departments need a culture and architecture that is more nimble and flexible.
“Agile is getting a lot of traction because the marketers need to have this speed to market,” he says. “It might not be the perfect solution at the end of the day, but they are not looking for the perfect solution, they are looking for something that works quickly and that they can throw out to the market and test quickly and learn from it.”
This is leading to large consultancies and vendors such as IBM increasingly working with IT functions to reshape processes along agile lines, including the use of cloud computing services to provide infrastructure quickly.
“You’re giving yourself a flexible infrastructure that can respond to campaigns, very quickly, very dynamically, in the way a CMO thinks,” says Brock Douglas, strategy and analytics leader for IBM Australia. “If you can change and transform the IT shop to be an agile shop, using cloud, using agile methods, you can start running it as campaigns and start drawing down more of an opex budget.”
Douglas rates mobility, cloud computing and analytics as being among the top five areas a CIO should be investing their time, but he adds another that might be less familiar for many IT workers.
“A criticism of an IT shop and skillset is historically they think like system engineers,” Douglas claims. “And that’s not surprising, but you get solutions and systems that are very engineering-focused, as opposed to user-experience focused. We need to train our IT people to be more in the creative space, more in the user-experience space.”
In one example, IBM has been working with the City of Melbourne to create a new interactive online experience for this year’s Melbourne Spring Fashion Week that helps shoppers hunt down the best retail bargains. This includes an interactive website with social media analytics that will help the City of Melbourne understand sentiment around popular shows and events across Fashion Week and in turn, help plan future events.
Making this new vision a reality take skills however – and they are proving to be in short supply. Hence the digitisations of marketing has created an opportunity for some systems integrators to step in to fill skills gaps, especially for smaller clients.
The managing director of mid-tier integrator Extend-IT, Peter Drum, says a large portion of his firm’s work is in marketing automation. Extend-T also manages core CRM applications for several clients, and will execute marketing campaigns as a bureau.
“It’s been a very solid stream of activity for us,” Drum says. “A lot of marketing managers will give responsibility to [advertising] agencies, and those are very good at brand, creative and campaign development. They’re not so good at implementation and execution of electronic campaigns, and the like.
“There is a gap there, and that is one that we have been able to fill.”
In many instances, a marketing-oriented client of 100 or more people might only have two or three IT staff, who might only perform support tasks, Drum notes. As a result, they lack the skills to tie the various elements of their marketing platform – such as CRM and campaign execution technologies – together.
“You can’t achieve full value without integration,” Drum continues. “If you really want to segment and target your messaging, you must have deep integration with CRM, and also a lot of understanding of that data as well.”
What is likely over time is that the barriers between marketing and technology functions will continue to fall. Vancil says it is therefore important IT learns the language of marketing to participate in its conversations.
“Marketers have their own vocabulary for many of their activities – just like any of the other departmental functions that IT supports,” he says. Learning is a two-way street however, with Vancil believing that marketing also needs to improve its operational and technical skill sets.
“In a recent survey that I conducted of top CMOs, the general consensus regarding skill sets is that at least 1/2 of all new marketing hires will have technical backgrounds,” Vancil says. “You just cannot be a good marketer today unless you are a good technologist."