How to get the best ROI from your martech investment
- 04 February, 2016 07:39
Marketers have been on an aggressive march towards digitisation and are expected to spend $32.4 billion globally on marketing technology by the year 2018, according to IDC. But what many are struggling with is demonstrating martech’s positive ROI.
“With more solutions than ever flooding the marketing technology arena, you can’t blame marketers for being uncertain of the best way to proceed,” says managing director of advertising tech business InSkin Media, Matt Newcomb. “It’s easy to forget these technologies all exist to drive better campaign outcomes, giving marketers more control and more knowledge, not less.”
In a 2014 CMO Council report, less than half of marketers surveyed were found to be producing a positive ROI off the back of the technology they used. Ensighten’s chief strategy officer, Pelin Thorogood, predicts marketers will feel even hotter under the collar in 2016 when it comes to proving martech ROI.
“Something has to give,” she tells CMO. “This is why you’ll see marketers make stronger efforts to eliminate martech redundancies – for example, replacing traditional enterprise analytics with in-house solutions. You’ll also see marketers try to make these technologies work better together to produce better results through the use of a digital data layer, which standardises data definitions across siloed applications, and through the use of the universal customer profile.”
Managing director of programmatic vendor, Rocketfuel, JJ Eastwood, points to the rapid evolution of marketing and advertising industries thanks to changes in consumer behaviour, the explosion of new devices and advancements in marketing technology.
“In this new world of ever-proliferating data, marketers will be forced to move beyond profiles, segments and demographics and break the constraints of planning for channels in a silo,” he says. “This will put an end to data loss, latency and fractured views and ultimately gives marketers a full view of customers.”
For his part, Eastwood sees a growing trend towards unifying data platforms and functionality.
“This year, there will be a growing trend towards integrated DSP [demand-side platforms] and DMPs [data management platforms] that allow savvy marketers to optimise media spend across all addressable channels simultaneously.”
Linking martech investment to long-term strategy
Wherever the pain point might be, David M. Raab, principal of US-based marketing technology consultant, Raab Associates, believes the key to martech ROI is having a strategy. This requires a long-term approach that then guides tactical decisions.
“This gives you a way to assess specific opportunities by asking: Do they support my strategy?” he says. “More specifically, do they support my strategy better than alternative investments?”
Raab, who has more than 30 years’ experience as a marketer, consultant, author and analyst, suggests strategy itself exists at several levels.
“You start with a business strategy, such as excellent service to justify a premium price, then a marketing strategy, such as using highly personalised marketing to attract affluent customers who will pay extra for superior services,” he explains. “Then you look at a martech strategy, such as developing advanced personalisation capabilities for a consistent, coordinated experience across all channels.
“This strategy determines your technical requirements and overall architecture. Only once all that is in place can you start to acquire specific systems to fit into the planned architecture.”
There’s no one-size-fits all solution because strategies will differ, Raab says. As a result, he advises testing capabilities using external services before making a long-term investment in a particular system or platform.
“This might mean using an agency or a ‘software-as-a-service’ platform to try new media or promotion methods without committing to them fully,” he says. “If something works, you can make a larger commitment. This approach lets you try many new things, increasing the odds of success. Of course, whatever you try needs to be consistent with your marketing and business strategies.”
Australian managing director of digital agency, MullenLowe Profero, Dave Bentley, agrees marketers must build a clear vision and strategy for what their brand’s customer experience should be over the next three to five years.
“Take a new perspective and focus on what channels could truly add value for your customers, instead of focusing on what fits with your current marketing strategy,” he says. “Audit existing systems and identify gaps, then research and prototype technology platforms that fill those gaps. Work with agency partners that know how to integrate these technologies and specialise in designing and building customer-centric digital platforms.
“Then test, learn and optimise.”
Bentley says marketers should focus on very deliberate test, learn and optimise programs. At the same time, he recommends being open and flexible, noting test-and-learn may throw up insights that require changes to the strategy.
“There are so many leaps we’re making in digital that could and should add tremendous value to businesses, and in the long run drive significantly better ROI,” he continues. “However, it will take time and concerted effort to work out how best to use new innovations like marketing automation, personalisation engines with a content management system, and proximity-based marketing. Not to mention making the most of well-established platforms like Facebook, which is now a very powerful targeted advertising platform.
“My advice would be to start simple, but have a vision, strategy and roadmap to work towards, aiming to leverage these technologies towards drive stronger business results over time.”
Establish your ‘vital few’
For Oracle Marketing Cloud’s APAC regional director, Will Griffith, martech ROI also comes down to keeping it simple. To do this, he advises establishing your marketing ‘Vital Few’ before considering an investment.
“Work from the top down, define the vision, map the objectives to the vision and list out the goals that will get you there,” he advises. “Be harsh and cut out the non-core to leave yourself with your ‘Vital Few’. When it comes to martech investments, you shouldn’t even look at it if it doesn’t clearly align to one of your Vital Few objectives, goals and vision.
“Also, don’t re-invent the wheel. Find early adopter examples of companies in similar industries to you, understand what martech they are using, do a skills analysis of what you have in your organisation. Then initiate adoption of those marketing technologies being adopted by others and you have the right skillset to run with, and address your low hanging fruit to produce better results.”
Up next: How to integrate technology and blending tech with creativity
Leverage integrated technology
Experts agree integration is another area where many marketing teams can and should improve. In its recent State of Marketing Technology report, Squiz found 70 per cent of respondents have not even reached the halfway mark in integrating martech platforms.
“This is an obvious missed opportunity if these CMOs expect to get real results from their martech,” says the digital solutions company’s CEO, John-Paul Syriatowicz. “CMOs should be already leveraging integrations between their CRM and their website, their email automation system and their CRM, and more.
“Employing technology solutions that are fully integrated, so the end user has a single, unified digital view and experience, is essential for a smooth and interactive customer experience.”
Squiz’s technology report also found the most important digital goal in 2016 for marketers is integrating all platforms and channels. “Moreover, only 1.3 per cent of marketers described their marketing technology platforms as 100 per cent integrated,” Syriatowicz says.
Leveraging technology effectively also means maintaining good relationships between the marketing and IT teams.
“As the roles and responsibilities of the CMO and CTO continue to blend, the harmony of these two teams will rely on the understanding that although they may approach problems from different perspectives, they are all working towards the same goal,” Syriatowicz adds. “In order to maximise the impact of the technology, the experience and expertise of both teams will be crucial to the digital evolution of a business.”
Blend technology with creative strategy
Over at creative agency, Imagination, leveraging technology for the best results requires brands to truly buy into the strategic and creative process.
“My advice is to find an ongoing agency partner who you trust to bring you the best solutions for your business problems, not just solutions that fall in their area of specialty,” managing director, Anthony Gowthorp, says. “Tech solutions seldom succeed in isolation, and having a holistic creative strategy improves integration and boosts success rates.”
According to the managing director of customer experience software company MaritzCX, David Blakers, modern technologies, such as advanced CX platforms, offer marketers insights and knowledge that previous generations only dreamt of.
“With this in mind, investing in technologies that integrate well and effectively ‘talk’ to each other is essential,” he explains. “This is easier said than done of course, but it is worth the time and investment upfront to ensure best possible results.
“In the CX space, investing in technology that enables you to collect, analyse and then act on customer feedback in an automated manner ensures your CX team spends its time on analysis and action planning, rather than the operational components of a feedback program.”
All technology solutions are only as strong as their weakest component, continues Acxiom senior manager for client solutions, Peter Abbey.
“Often that will be the integration of silos of data,” he says. “The base building block is an accurate single view of the customer including their product holdings and interactions. But the nature of developing a single view of a customer is changing.
“When introducing new capabilities, the focus from the start must be on leverage. Start small, get marketers using the platform, and then incrementally grow capability based on real business needs. This keeps benefits in focus while at the same time provides the agility needed to meet technological and business change.”
Track and test mobile
If you aren’t already, you also need to track and test mobile, Rakuten Marketing managing director, Anthony Capano, says.
“I’m constantly surprised by the number of advertisers not accurately tracking mobile activity, and if they aren’t, then there is a great opportunity for CMOs to improve overall campaign ROI,” he says. “We had been expecting it for a while, but 2015 really did see some great advancement and growth in mobile, and 2016 won’t be any different. Tracking campaigns across devices will give you a greater insight into your overall performance.”
Head of digital at the Nest agency, Martin Hoegh-Guldberg, says the focus should be on creating better mobile experiences.
“From late 2014, the majority of all digital media was consumed on mobile devices as opposed to desktop computers,” he points out. “It’s no longer a question of mobile being important - it’s the key platform to focus on getting right. Every marketing and communications execution needs to start with mobile before considering other platforms. If it works on mobile, it will no doubt work on others.”
Hoegh-Guldberg believes simplicity has never been more important when investing in app technology.
“Mobile screens don’t cope with lots of information, features and functions,” he says. “They demand a clean and simple user experience that allows thick fingers to quickly complete desired tasks. And the more single-minded this experience, the better.”
On top of this, there needs to be a true value exchange with the app and its users. More than one quarter of all apps are abandoned after just one use, and only 2 per cent to 4 per cent are opened multiple times, Hoegh-Guldberg claims.
“You need to create a true value exchange so that if, the user gets something they want in return – something free or something of intrinsic value to them,” he says. “Without this, your mobile app will be abandoned and fall into the ever-growing graveyard of mobile experiences.”
Keep the end goal in mind
To better leverage technology to improve ROI and ultimately produce better results, oOH!media CMO, Micheala Chan, recommends starting with the end in mind, while being very clear on the business problem being solved.
“This is true for both B2B and B2C marketing,” she says. “You also need to have absolute clarity on the measurable business objectives across the marketing funnel. With this clarity, I believe marketers can apply the art of science in defining the marketing strategy or roadmap.”
By being clear on the end goal, Chan believes marketers can ensure senior leadership support by communicating progress and outcomes of the technology-driven marketing strategy across the business, including HR, sales, finance and IT.
“This will help guide and form a holistic marketing strategy and avoid fads, gimmicks, empty martech promises as well as siloed marketing technology applications,” she adds. “For marketers to develop a sustainable strategy that will produce better business results, technology is more than an enabler, it is the cost of entry for improved success in employee engagement, acquisition and retention of customers, industry leadership and of course, ultimately improved shareholder return.”
The advent of marketing technology has left a lot of marketers feeling like they need to be technologists, but Gowthorp says this doesn’t have to be the case.
“Marketers need to be marketers more than ever in the digital age,” he says. “I would suggest that good ROI is driven by simply knowing your brand’s identity, products and value proposition – not blithely pursuing a technology solution for its own sake.
“Start with the problem, and take that problem to someone who specialises in a range of creative and technology solutions. Stay a marketer and trust your experience, don’t just say, ‘I want an app’. The technology must follow the problem, not the other way around.”
Getting the best ROI on any tech spend comes down to the right people, measurement and level of investment, Blakers concludes.
“If you are not properly resourced with the right people, there is a real danger that the investment gets unused, or its value is not realised,” he warns. “You also need to minimise the investment at the pilot stage to reduce risk until the business case is proven.
“Finally, a better measurement of real ROI is ensuring that the activity is tracked to the closed sale, and not just to the lead, which can be very misleading. Ideally, CMOs should plan to get their investment dollars back quickly and aiming for a fourfold return over 24 months.”
Checklist for attaining a better martech ROICMO and co-founder of The Web Showroom, James Lawrence, shares his top tips for achieving a positive martech ROI:
- Develop an appropriate strategy and then find the best technology in which to execute the strategy with.
- Focus on the actual marketing problem you are facing and ask if this is the right technology to help you to solve it.
- Agree from the outset how the investment is to be measured. What metrics are to be considered relevant and what are the KPIs relevant to the specific organisation? Without these, it can be difficult to claim success over the reporting period.
- Have your mobile strategy solved. It’s frightening how many marketers still think through a 2010 prism. All marketers need to consider that most digital engagement with businesses in Australia is happening on mobile devices.
- Don’t rush into a purchase. Before putting pen to paper, have the entire implementation mapped out. Engage proven consultants.
- Map your martech stack. Look at what technology you are using at different stages of the buyers’ journey. Often it is quite illuminating in terms of strengths and weaknesses. It can also be good to show potential ripple effect when changing marketing technologies.