As CMOs start to outspend CIOs, collaboration remains key

Digital marketing budgets are set to increase by 8 percent for 2015, according to a report from Gartner that projects CMO spending for the rest of the year. The survey reached across six different industries: high tech, financial services, manufacturing, retail and transportation, media, and hospitality. It consisted of 315 marketing decision-makers from companies with revenue totaling $500 million per year or greater.

The results show marketing has a growing influence on technology spending, with CMOs slated to spend more than CIOs by the year 2017. In fact, companies reported that 25 percent of their annual budget was spent on digital marketing efforts in 2014; and out of those companies, 51 percent plan to increase digital marketing budgets in 2015.

The adoption of marketing technology has grown in a number of areas, including CRM, digital marketing, database marketing, marketing automation, customer analytics, mobile marketing and ecommerce. Digital marketing has experienced major growth, according to the study, with companies now viewing marketing and digital marketing as one cohesive strategy.

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Marketing is totally responsible for choosing and managing marketing service providers at 83 percent of companies and choosing technology providers at 71 percent of companies. Marketing’s reach extends to software, as well, with 75 percent of companies reporting that marketing controls the budget for consulting and design of marketing-related software. Additionally, 47 percent of companies report that marketing controls the budget for software purchased as a service, while 43 percent responded that its marketing budget extends to external hosting of technology to run marketing-related software.

Marketing means money

Part of the shift comes from the fact that websites are now more than destinations to simply learn more about a company or product, according to Chris Vennitti, vice president of HireStrategy. Instead, websites have become revenue-generating machines, and a lot of that responsibility has fallen on the shoulders of marketing teams. This is especially important with the rise of mobile marketing and targeted advertising.

“Fueling this trend is the use of programmatic media, which allows marketers to target the audience they want and automate bidding rules for ads based on the business value they deliver. Nevertheless, the survey suggested that in 2015, digital advertising will share its top ranking with mobile marketing,” Gartner said in a press release.

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Couple the growth in targeted advertising with the fact that company websites need to have a strong focus on customer experience, according to Gartner, and it’s easy to understand why marketing has its eye -- and budget -- set on refining the experience for end users. "Customer experience is also considered by many companies to be the top innovation project, just edging out product innovation," says Jake Sorofman, research director at Gartner, in a statement.

So what does this mean for IT? Well, the future of IT will probably involve more collaboration with marketing, as the department brings in more technology. “Technology professionals will become more adept in driving business and revenue instead of solely supporting growth,” says Vennitti, “And IT initiatives will be based around working hand-in-hand with marketing to develop new products as opposed to just systems to support the business.”

Collaboration starts with the CIO and CMO

As for the relationship between CMOs and CIOs? It’s going to involve a lot more collaboration, but as Vennitti points out, “CIOs and CMOs have already started to work more collaboratively,” since this growth in marketing technology budgets started back in 2011. “There is a lot of cross-interviewing of potential internal IT candidates between the new departments, which helps drive new product design ideas and promotes growth.”

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Of course, as plenty of companies have learned that with new software and technologies also comes the risk for data breaches and hacking. “It can be more difficult to keep track of security measures and maintain risk-management processes with other departments taking over budget,” says Vennitti.

In the past, IT has always been responsible for ensuring a company stays secure, but that reach has grown more difficult as technology becomes more pervasive. It’s difficult to oversee employee’s digital use on the individual level, let alone entire teams adopting new software.

Vennitti says IT will need to increase its focus on risk management with marketing by leveraging that relationship to ensure marketing has the tools it needs and that the company stays safe and secure. It’s clear that technology in the workplace isn’t going anywhere, so the big take away from the study is the need for a strong relationship between IT and marketing, and that starts with CMOs and CIOs.