Things were looking up for marketing technology budgets mere months ago. As late as August 2020, CMOs across the nation told Gartner, Inc. that amid hiring freezes and layoffs, budgets surrounding martech were expected to remain strong. Money poured into digital channels as customers flocked online.
By November, however, that optimism had faded. Gartner now reports that nearly 60% of marketing leaders expect moderate to severe cuts to their martech budgets.
What happened?
Martech certainly didn’t become less important. But as the pandemic drags on, money is increasingly tight. While looking for ways to cut costs, brands have discovered that marketing teams aren’t using everything that’s already at their fingertips.
Gartner reveals that marcom firms utilize only 58% of their martech stacks’ full breadth of capabilities. It’s a number that has remained flat since 2019.
“Low levels of utilization present a real risk for marketing organizations, particularly in light of looming budget cuts or ones that have already hit,” says Ben Bloom, senior director analyst in Gartner’s marketing practice. “Three-quarters of marketing organizations that are facing cuts to martech budgets also struggle with utilization.
“That’s a real gut punch—one that demands attention to streamlining technology acquisition and improving usage.”
What Are These Martech Tools?
A martech stack is the full suite of technology that marketing teams use to shepherd customers through their buying journeys. Think CRM, social media, email, web analytics, and other tools used for marketing automation, sales enablement, paid media, engagement and more.
If that sounds like an overwhelming vat of resources, it is. Chiefmartec.com published this helpful chart known as the Martech 5000. However, it has rapidly outgrown its name to include 8,000 martech tools.
Since 2011, the martech landscape has grown 5,233%. And one in five solutions found in this year’s martech landscape weren’t even there last year—almost the equivalent of the entire 2015 martech landscape.
Marketing organizations have embraced these resources in a big way. Gartner found a 30-point shift in the preference for integrated martech stacks over best-in-class solutions (one branded solution to rule them all) practically overnight. Martech stacks jumped from a 29% preference in 2019 to a 59% preference in 2020.
“The first generation of marketing suites were generally closed solutions, without open APIs or ecosystems of third-party apps, writes Cheifmartec.com editor Scott Brinker. “They promised to include everything a marketer could ever want in one box. But as the martech landscape expanded exponentially, the dream that one company could build it all slipped out of reach.”
With marketing experts like Neil Patel evangelizing that brands will fall behind without a diverse set of tools, there’s no wonder the march for more tools has continued to this day.
Harnessing It All
With so many options, though, marketing teams have become overrun with solutions. When each team member can grab a new app for every need, as they need it, work becomes siloed, less collaborative and, ultimately, less effective.
Accenture studied the phenomenon and concluded that the top challenge for 30% of marketing teams is siloed systems and data. A surprising 60% of creatives were forced to abandon great ideas during the past year solely because of a lack of time, despite the many tools available to them.
Throwing more money for more tools into the mix hasn’t helped. Remember that brands are utilizing only 58% of their martech stacks’ capabilities already. This realization may be driving the shift in martech budgets and priorities.
As Gartner reports, success hinges less on the various technologies selected and more on the people and processes involved. There’s a lack of cross-functional collaboration, solutions with unused features, and disorganized and siloed customer data. The result? An overall complexity of the current martech ecosystem getting in the way.
These days, finding the right marketing tools isn’t the problem. The challenge, as Brinker puts it, is in having a “backbone for marketing, sales, and customer service. It’s less about trying to do all the things anyone could ever want [than trying] to be the common foundation that connects all of them together.”
Without that backbone, teams have acquired more martech tools without a unified strategy or even organizational knowledge on how to use them to their fullest potentials.
The Big Clean-Up of 2021
Gartner’s 2020 martech research offers actions marketing teams can take to use what they have and get more bang for their buck. This involves reprioritizing new technologies and maximizing utlity.
“Despite the hype around fancy solutions with embedded AI/ML capabilities, the digital marketing leader in your work-life probably doesn’t need more technology,” Bloom says in a press release.
The findings from the research include running both a martech stack audit (you may not even know what you have) and a skillset audit (to assess what your team is capable of utilizing). Then, building on those audits, support continuous training and keep updated martech roadmaps and benchmarks.
It may not be a fun holiday exercise, but it could be the best thing you do all year. Once you take stock of the resources you already have at your disposal, the prospect of running a tight ship in 2021 will seem less daunting.