Published on the 09/07/2020 | Written by Heather Wright
Tech hype not living up to reality of life…
Analytics, personalisation and martech have taken a dive when it comes to CMO’s strategic priorities with brand strategy instead coming into focus more clearly as a direct result of the pandemic.
Gartner’s CMO Spend Survey 2020 shows analytics has dropped nearly 10 percentage points year on year, with just 27 percent of CMOs ranking it as a top three priority.
Why? Well, says Gartner, it’s because marketers are continuing to struggle to build even rudimentary analytics capabilities.
“A fine line exists between optimism and hubris.”
Personalisation is also on the downward slide – just 14 percent of CMOs ranked it as a top three priority, giving credence to earlier Gartner predictions that 85 percent of marketers will abandon their personalisation efforts by 2025 due to a lack of ROI and/or the perils of customer data management.
Bouncing up the list is brand strategy, which just last year was at the bottom of the list. Now, it’s leapt into the top three at 33 percent – ahead of analytics, personalisation and martech.
That’s yet another thing we can blame on – or perhaps in this case, attribute to – Covid.
“Brand awareness and relevance in time of strife is more important than ever,” says report co-author Ewan McIntyre, a Gartner VP analyst.
“We are seeing successful brands take action that is authentically connected to their brand strategy and value proposition.”
Meanwhile, martech investments have managed to remain unscathed – so far. They make up 26 percent of marketing budgets in 2020, with 68 percent of CMOs expecting to increase their investment in the tech over the next 12 months. That’s despite an ongoing challenge of utilisation of martech, with marketers reportedly only using 58 percent of their marketing technology stack’s full capabilities.
“CMOs believe technology will help them navigate through difficult times and recover faster, and thus will continue to shield these investments – like customer data platforms, mobile marketing platforms and digital commerce – from further cost efficiencies,” McIntyre says.
So that’s the good news for now, but it could all change, with Gartner warning that if martech investments continue to not deliver the returns expected, they could become an easy target for future cuts.
That’s a warning that Gartner is also giving when it comes to marketing analytics, something it says is the single largest area of investment when it comes to marketing programmes and operational areas that do more of the heavy lifting.
“Business cases for funding rely on a perception that data and experimentation will transform marketing,” it warns of the investment in data-driven marketing. “Failure to deliver against inflated expectations may come at the expense of future funding commitments.”
The report also shows that marketers are ‘significantly out of step with other members of the c-suite’ when it comes to their outlook – one which in the case of marketers may be ‘overly positive’ Garner says. Most CMOs believed the global economic outlook will have a positive impact on their business in the next 18 to 24 months.
“Although CMOs remain optimistic about marketing’s future fiscal health, a fine line exists between optimism and hubris,” the report says.
The CMO optimism is ironic, given that the report also notes that marketing budgets have dropped to the lowest levels since 2014 – and that’s not something you can attribute to Covid, with flat growth for a number of years showing the writing has been on the wall for some time.
Last year, however, saw budgets drop, albeit by a small margin, moving from 11.2 percent of company revenue to 10.5 percent.
Just over half (56 percent) of CEOs reported they expect to increase marketing investment, well behind the 74 percent expecting to increase IT budget, or the 60 percent planning to increase R&D and innovation budget.