There Could Be a Reckoning on the Way for Marketing Tech

Last updated: 11-14-2020

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There Could Be a Reckoning on the Way for Marketing Tech

Nearly 60% of executives say they expect moderate or severe cuts to marketing tech budgets in the coming months as pandemic-related belt-tightening prompts leaders to examine the effectiveness of such tools, according to a new report from research firm Gartner.

While previous research from Gartner had shown that mar tech was one of the few investment areas to emerge relatively unscathed by the first round of Covid-19 slashes to marketing spend, the new survey found that executives still struggle with how to get the most out of tech stacks.

Marketers say they only use about 58% of the capabilities of these tools on average, a stat that has remained flat since 2019. About 35% of the 387 mar-tech leaders surveyed for the report said they had already initiated steps to overhaul their stacks, while about 66% had delayed at least one previously approved purchase in the space because of impending cuts.

While the recession brought on by the pandemic is the direct impetus for the cuts, Gartner analyst Ben Bloom said experts have been expecting some kind of reckoning for the space since before Covid-19 as spending on areas like personalization mounted, but ROI numbers didn’t always seem to justify the growth.

“The substantial allocation of resources to marketing tech has had this risk the past couple years—that there is pretty heavy investment, but challenge delivering ROI,” Bloom said. “We’ve been seeing challenges due to this overinvestment, but it’s really come into sharp relief now.”

Gartner previously predicted last fall that about 80% of marketers who have invested in personalization will abandon such efforts by 2025 due to a lack of ROI, the risks involved in customer data management or both. That report recommended that brands instead use tech like AI and biometrics to find generalized behavioral insights instead of personal data.

“[Downsizing] could take the form of asking vendors for some relief from contractually obligated payment schedules; it could be asking for a right-sizing of the number of licenses, or something like that. But it could also be delaying the purchase of technology that IT teams might have really wanted,” Bloom said. “And so those kinds of challenges might definitely impact marketing plans and the ability to deliver on the customer experience.”

For marketers looking to ensure that they are running as tight of a mar-tech operation as possible, Gartner’s report recommends implementing regular audits of the tech stack, honing a strategy for choosing vendors, and focusing on internal talent and training.

“Regular audits can help teams to discover some of the technology that might be lurking there that that is underutilized,” Bloom said. “And we also think that teams really need to think about the components of talent and training that can drive increased collaboration with other parts of the organization.”


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