DIGITAL MARKETING SERIES

MARKETING TECHNOLOGY DECISIONS IN A DATA-DRIVEN WORLDTHE TECHNOLOGY AND ORGANIZATIONAL STRUCTURE BEHIND SUCCESSFUL DIGITAL MARKETING

The recent onslaught of evolving commercial technology and the massive volume of data that has come with it has put the customer right at the center of everything. Customers are in control like never before and can make purchasing decisions at any time, through any channel. Herein lies an overwhelming challenge for the marketers driving enterprise brands. Companies must be prepared not only to understand customer behavior, but also to be ready to react and engage on the fly. Subsequently, sophisticated marketing technology capabilities must evolve to partner with data-driven marketing initiatives. Technology solutions must be viewed as the foundation of consistent omni-channel customer experiences.

So if it is the responsibility of marketers to understand, interact, and engage appropriately — essentially deliver complex data-driven marketing campaigns — then what technologies are necessary?

FURTHER QUESTIONS ABOUND:• How should an organization structure itself

to capitalize on marketing and technology skill sets?

• Is this technology funded by the marketing or IT department?

• Should management of new tech resources be outsourced or handled in-house?

• Which internal team now “owns” the customer?

These and many other questions face businesses that intend to grow in the mercurial digital marketing landscape.

Marketing leaders must address the critical role of their technology decisions, and companies must take a fresh look at their internal marketing and IT organizations to meet the customer’s omni-channel demands.

INTRODUCTION

- MarTech presentation, “Chief Marketing Technologists Symbolize Marketing’s Changing Role,” Laura McLellen, Gartner (August 2014).

Data technology requires attention from all facets of the marketing organization to address the effects of digital disruption.

MAJOR IMPACTS TO MARKETING

The Customer is Now in Charge

The Sales Funnel is Blown to Bits

The Economy is All About the Experience

Data is the Driver of Decisions

Innovative Technology Underlies it All

DATA-DRIVEN MARKETINGMost marketers in corporations use data in some fashion to support their marketing initiatives and expect to leverage it even more in the near future. Large enterprises routinely use data to guide their marketing approach, and even smaller companies use it for ad hoc campaigns. Data has clearly shown its value to marketers surveyed by Teradata in their recent “Data-Driven Marketing Survey, Global (2013).” Half of the respondents said that data has helped them both increase revenue and reduce costs.

Teradata defines data-driven marketing as the process of collecting and connecting large amounts of online data with traditional offline data, rapidly analyzing and gaining cross-channel insights about customers, and then bringing that insight to market via a highly-personalized marketing campaign tailored to the customer at his/her point of need.

– Lisa Arthur, CMO, Teradata Marketing Applications

2013 Teradata Data-Driven Marketing Survey, Global

BENEFIT OF USING DATA IN MAKING DECISIONS

More Accurate Decision

Better Business Result (revenue, profit, etc.)

More Efficient Use of Resources, Reduced Cost

Identified a New Opportunity, New Competitive Advantage

Faster Decision

None/Not Sure/Other/ Can’t Remember

58%

49%

44%

43%

31%

10%

So if data is improving results, why do some marketers live with a nagging sense of unease? It could be that they have huge amounts of unstructured data to amass and somehow merge with more traditional sources of customer information collected from numerous disparate sources. Marketers know that it is this amalgamation that provides the most accurate insights into customer behavior, but how do they know they’re getting everything that’s available in time to use the information appropriately?

This disconnect between desired value and reality has many marketers throwing up their hands, mostly because they (70 percent of them) don’t manage the data or the data analysis process within their organizations. Usually data-related functions reside in the IT department, and it is commonly a huge challenge for marketers to access the information they need, when they need it.

Customer-focused organizations are learning that marketing and IT departments need to collaborate and learn how to work to meet business needs, not necessarily the existing, outdated corporate structures. Numerous industry studies have been released in recent months, all showing that marketers who have more direct control over customer data are much closer to achieving their data-driven marketing goals than those who have to go through the IT department or even outside vendors.

DATA IS THE MOST UNDERUTILIZED ASSET

HAVE A FULL VIEW OF THE CUSTOMER

50% 18%

In order to launch true data-driven marketing initiatives, marketing and IT leadership must forge strategic partnerships to implement an analytic process and real-time decision-making solution to glean customer insights from a tangle of data.

With 42 percent of global marketers agreeing that lack of process is the primary difficulty in implementing data-driven decisions, creating a culture around data insights is a good place to start. Processes need to be created within marketing departments to ensure that data insights are brought to market as quickly as possible.

“ THE FIRST STEP TO FIXING ANY ISSUE IS ACKNOWLEDGING IT IS A PROBLEM.”

Teradata Data-Driven Marketing Survey 2013, Global

TOP OBSTACLES TO DATA-DRIVEN MARKETING

Lack of Process to Bring Insights Into Decision Making

Technology Inadequate, Outdated

Financial – Not a High Funding Priority

Team Skills/Talent

Lack of Knowledge/Consensus Around Importance

Inability to Show Measurable Benefit, ROI

Lack of Needed Data

42%

39%

35%

31%

27%

25%

22%

THE ROLE OF MARKETING TECHNOLOGY

In order for businesses to truly execute data-driven marketing initiatives, a major shift in thinking needs to occur regarding the marketer’s need to drive the technology behind their efforts. New marketing technology solutions are being introduced to address the frenzy of customer data at hand.

Obviously, both marketing and IT teams are struggling to define and address the opportunity of data-driven marketing. But the key thing to recognize about marketing technology is this: process must come first.

Businesses simply have to find a way to operationalize the insights revealed from data analysis. So it is critical for marketers to understand and communicate what they are trying to accomplish before engaging IT.

Scott Brinker, Chiefmartec.com

STRATEGY

STRATEGY

STRATEGY

TECHNOLOGY

TECHNOLOGY

TECHNOLOGY

Linear Strategy First

Linear Technology First

Circular, Both Intertwined

That’s not to say that IT takes a support-only role. In fact, far from it. Influential marketers know how to engage IT throughout their processes, not only because the technology group facilitates execution, but also for their point of view. Often, strategies can be created based on new technology and updates. Together, marketing and IT can shape the customer experience, and that, ultimately, impacts overall business.

Designing and delivering customer experiences has always been marketing’s role, but now digital is the medium to deliver those experiences. So, it follows that marketers become familiar with the technology behind digital marketing.

So While Technology Is Not To Be Relegated To A Subordinate Role, It Is Also True That Marketers Must Now Step Up And Become More Tech Savvy.

There is strength and validity in the often-differing approaches and priorities from both marketing and technology leaders. It is therefore so important not just to give lip service to the collaboration between the two groups, but also to pro-actively establish lines of communication to vet out common goals and priorities.

When making a technology purchasing decision, IT will be more likely to make a cost-based decision, taking into account both hard and soft costs of deployment and ongoing support. While budget-based evaluation is critical, the lowest-cost technology solution may not provide everything the marketers need and can’t be the single determining factor when the customer experience is at stake.

One way of ensuring optimal collaboration is by implementing a Marketing Technologist role in the organization that can wear both hats and understand both marketing needs and technology requirements. (Note: The Marketing Technologist role is discussed in more detail later.)

THE MARKETING TECHNOLOGY LANDSCAPE

Source: “Big Data Marketing,” Lisa Arthur

The reality of data-driven marketing has certainly captured the attention of technology providers. If ERP was the darling of the 1990s and CRM in the 2000s, we are now in the decade of marketing tech. Very promising technology solutions are democratizing the marketing landscape, and as a result, marketing professionals find themselves evaluating technology platforms and making IT purchasing decisions like never before.

The combination of big data with sophisticated analytics tools lets marketers have the control they have needed for years. And what would any of that be without automation?

According to Lisa Arthur, Chief Marketing Officer, Teradata Applications, companies “need to put the processes and tools in place that enable them to execute on those insights.”

The marketing lingo continues, and although it has been redundantly talked about across the marketing industry in recent years, marketers still struggle to foster a “data-driven,” “one-to-one,” “near-real-time” customer conversation based on a “360 degree view.” Ultimately, marketers must capture and aggregate data using complex technology to glean one version of truth about the customer. That single view comes only when the data resides in a single place — a data warehouse. Marketers must then employ technologies to ensure there is no data latency or lag time. Otherwise, multi-step campaigns cannot be implemented easily and efficiently.

A COMPLEX ECOSYSTEMTo say that the marketing ecosystem and data surrounding it has grown in complexity is an understatement. For years, what passed for technology associated with marketing was a spreadsheet and database — and almost always owned and managed by the media or publishing company.

With the growth of the Internet and online communications in the 1990s, data became instantly available to companies. A variety of marketing

technology companies sprouted to take advantage of these new capabilities. A handful of companies continued to inspire steady growth until around 2012 when there was a veritable explosion of marketing technology companies, swelling to almost a thousand by some estimates.

The resulting ecosystem is fraught with buzzwords and jargon that can make finding the right solution a challenge. Essentially, now most marketing technology falls into one of six different categories.

1 Online Services, including Facebook, Google, and Twitter, empower marketers to spread their message.

2 Infrastructure and Storage Solutions such as data warehousing and cloud computing have eliminated many of the barriers to data-driven marketing.

3 Marketing Management Platforms include integrated marketing clouds, marketing automation, and e-commerce engines that dramatically increase the efficiency of marketing and enable marketing to scale like never before.

4 Marketing Integration Solutions such as data management, tag management, cloud connectors, user management, and API systems help maximize investments and create advantage.

5 Marketing Applications, such as advertising, email, social media, SEO, content marketing, and marketing apps simplify many essential marketing functions.

6 Marketing Operations Technology provide analytics, asset management, and agile marketing management to enable marketers to make the biggest business decisions with confidence.

CHOOSING A TECHNOLOGY SOLUTIONSo how can a data-driven marketing organization maintain balance, yet stay poised to scale with the rapidly shifting technology groundswell? It’s important to understand three fundamental technology scenarios — suite, platform, and portfolio — and see how each stacks up against business needs.

Scott Brinker, Chiefmartec.com

A Marketing Technology Suite is essentially what it sounds like – one solution from a vendor to meet a company’s marketing technology needs. Selecting a suite eliminates much of the guesswork and projections about which components to implement for a marketing technology solution. With a suite, all the tech components and services are geared to work together.

As with almost everything tech-related, a suite comes up against challenges because data-driven marketing is still being defined, so the elements — web sites, email, mobile, social, etc. — keep it in a state of flux. Adding elements is possible, but each addition puts a bump in the road toward cohesive and clean architecture.

A Marketing Technology Platform, in contrast, opens up a suite format and allows for additional solutions to be added to its foundation. A platform typically has one crucial purpose, and that is to act as the base or master data repository that other software can leverage. Cloud-based technology platforms allow for easy creation and deployment of digital assets as well as advanced analytics so that companies can respond and engage with customers more efficiently.

Data-driven marketing requires that the entire user journey from awareness and engagement to adoption and advocacy is tracked and nurtured. All of this then needs detailed analytics so that it can be measured and optimized. An enterprise marketing platform will connect all the customer, content, and analytics data to provide real-time, actionable insights.

SUITE PLATFORM PORTFOLIO

A Marketing Technology Portfolio takes more of an à la carte approach to its solutions, offering several different products from which to choose. In essence, the solutions are not hardwired to work together. Changes are more easily executed in a portfolio scenario and speed to implementation is relatively quick, but it’s important to consider that a portfolio is not as integrated as other options.

ANTICIPATING CHANGEBecause marketing now involves so many moving parts and variables, and the marketplace itself is under constant change, many organizations are adopting agile marketing management principles where possible. Agile marketing borrows many of the ideas from agile software development to address modern complexity.

Because agile enables the project to move in small increments and values data over opinions, it gives marketers the ability to hit their objective even as it moves unexpectedly in an unpredictable market.

Additionally, because each project is essentially a series of small experiments on the way to the ultimate goal, the organization can take risks with individual steps they couldn’t afford to with the entire project at stake. The result is unique organizational learnings that will serve as a competitive advantage on future projects.

MARKETING TECHNOLOGY INVESTMENT

Strategic direction is only as powerful as the investment that supports it. We’ve been talking about personalization for years. Now, through digital marketing, custom analytics, and marketing as a service, the appetite is real, and true personalization is the future. Only a customer-centric strategy that combines technology and data can deliver sustainable opportunities for businesses to drive top-line growth through continuously more personalized data-driven marketing strategies.

– Darryl McDonald, President, Teradata Marketing Applications

Only a few years ago, Gartner analysts predicted that by 2017, CMOs would spend more on IT than their counterpart CIOs. This is not as far fetched as it may have once sounded given the technology ecosystem that supports marketing. Obviously, marketing is drastically becoming more technology-based, managing big data is critical to achieving competitive advantage, and marketing budgets are often larger and growing faster than IT budgets.

As we now understand, digital marketing technology is a cornerstone of business growth. CMOs and CIOs will need to forge unified organizations and collective budgets to work most effectively toward advancing customer relationships and ultimate loyalty to their brand.

Looking as far down the road as 2019, Teradata’s recent report in conjunction with Econsultancy, “Enterprise Priorities in Digital Marketing,” foretells a continual shift in digital marketing spending. As this trend continues, we will eventually see the balance between “traditional” marketing spend and digital marketing budget to the point that the two cannot be easily distinguished from one another.

- Enterprise Priorities in Digital Marketing, Econsultancy with Teradata, September 2014

As big data is top-of-mind for executives worldwide, using the right tools to understand big data has the power to completely transform entire enterprises.

Numerous industry reports tell us that CMOs are allocating 3 to 5 percent of their budgets to technology, and some are even approaching 10 percent as marketing budgets keep pace with revenue rates. These trends are good news for marketers and are also a clear indication that executive leaders are ready to put additional marketing investment up against marketing initiatives that demonstrate measurable momentum.

FIVE YEAR PROJECTED CHANGE IN DIGITAL MARKETING BUDGET SHARE

75% 72% 70% 67% 64% 60%

25% 28% 30% 33% 36% 40%

Traditional Spending

2014 2015 2016 2017 2018 2019

Digital Spending

The upswing in digital budgets is not just a shift from traditional to digital; a growing portion of marketing budgets is now allocated for technology. A recent Gartner study found that 67 percent of marketing departments plan to increase their spending on technology-related activities over the next two years. In addition, 61 percent are increasing capital expenditures on technology, and 65 percent are increasing budgets for service providers that have technology-related offerings.

In this converging landscape, CMOs and their teams are learning valuable lessons. They are getting better at defining and prioritizing technology investments based on their needs and

IMPACT: INNOVATIVE TECHNOLOGY UNDERLIES IT ALL

Capital Expenditures for Technology

Technology Expenses

Cross-Charged Expenses From

Internal IT

Expenses For Marketing Service Providers

opportunities. Proving ROI (return on investment) from marketing is nothing new, but given the allocations now being poured into marketing technology, justifying the spend with quantifiable results has never been more critical.

Given the inundation of customer data, one fact rises to the top: companies that avoid implementing marketing technology to make sense of data have an uncertain future. Nearly 80 percent of executives responding to Gartner also agreed that companies that did not embrace big data would lose their competitive advantage — and possibly face extinction.

OVER THE NEXT 2 YEARS, DO YOU EXPECT YOUR ORGANIZATION TO INCREASE OR DECREASE INVESTMENTS IN THESE AREAS?

3% 1% 2% 3%3% 3%6%

61% 67%50% 65%

9% 8% 5%

30% 23%40%

27%

39% 44%

32%

43%

22% 23% 18% 22%

Expect Significant Decrease

Expect Slight Decrease

No Change

Expect Slight Increase

Expect Significant Increase

TRANSFORMING IT TO SUPPORT DIGITAL MARKETING

Companies looking for strong digital marketing performance have to address the transformation of their IT functions, which now face the new demands of automated processes, sophisticated analytics, and hyper-connected customers. In efforts to cope, they may cut and paste solutions to address ad hoc marketing requests, which just creates more confusion and moves them further away from a smooth infrastructure.

The internal digitization of marketing functions will change the demands on your company’s IT department in three critical ways:

1 Omni-channel marketing and customer engagement evolve every day, requiring increasingly sophisticated technology.

2 Everything matters now. It used to be that efficiency was the driver, but now time-to-market, reliability, and security all vie for attention from IT leadership.

3 Greater investments in marketing technology solutions lead to more senior management visibility into the IT department’s ability to meet data-driven marketing needs.

Transforming the IT function to deliver what marketing requires can be an overwhelming prospect, but there are a few improvement measures that will facilitate the process and optimize digitization for the organization.

Centralized Leadership Of Digital Marketing Technologies can provide a clear view of priorities. This is especially important for shared services such as web and customer data. Some companies create a digital center of excellence to sort through requirements and consider needs across multiple teams.

New IT And Digital Marketing Talent can bring fresh perspectives and experience in leading technology practices. Companies should also look at new ways to scale the workforce to deliver against unplanned demand. This could include team augmentation by a third-party services team of digital marketing experts to manage particular elements of their overall marketing plan. For example, email marketing creation and deployment could be managed by a trusted vendor, freeing up internal talent to focus on strategy.

Scalable Cloud-Based Infrastructure combined with a lean infrastructure allow businesses to both launch their solutions quicker and satisfy demanding customers with relevant, real-time engagement.

High Quality, Integrated Data is required by sophisticated technologies such as predictive analytics.

A BLENDED ORGANIZATION

In the world of data-driven marketing, a company’s choice of technology solutions significantly affects how the business both influences its target audiences and how the audiences perceive the business’ brand. Managing all this technology can be a daunting proposition when companies need to decide on platforms for content management, marketing automation, CRM, campaign management, digital messaging, and so on.

As mentioned earlier, both marketing and IT must work together with the common objective of providing omni-channel experiences for customers. Both groups are experiencing major shifts, moving toward the point of convergence where the customer sits.

In one popular marketing technology book, Converge: Transforming Business at the Intersection of Marketing and Technology, authors Bob Lord and Ray Velez explain, “In today’s world the biggest challenge is that the consumer experiences are a reflection of how the companies are organized.”

Because companies are fragmented in the way they operate, they cannot create that connected and seamless experience for the customer they so desperately need. Companies have to knock down the silos of marketing and IT to deliver a fluid customer experience. An appreciation and understanding for what each group contributes to the customer experience will drive the new blended organization comprised of marketing technologists and IT professionals that understand the nuances of marketing.

To distill it even further, the marketing executives are looking at marketing capabilities, brand, agencies, speed, analytics, and agility while the IT professionals are looking at architecture, functionality, security, scale, and performance.

• Chief Marketing Officers

• Chief Digital Officers

• Chief Marketing Technologists

• Chief Marketing Technology Officers

• Chief Information Officers

• Chief Technology Officers

• Chief Strategy Officers

• Chief Innovation Officers

• Chief Experience Officers

• Chief Customer Officers

• VP/Director Marketing

• VP/Director IT

• VP/Director Digital Marketing

• VP/Director Digital Strategy

• VP/Director Customer Intelligence

• VP/Director Marketing Technology

• VP/Director Marketing Innovation

• VP/Director Marketing Operations

• VP/Director Marketing Analytics

• VP/Director Demand Generation

• VP/Director Growth

• VP/Director Product Marketing

• VP/Director CRM

• VP/Director E-commerce

HYBRIDS OF MARKETING AND TECH RESPONSIBILITIES

MARKETING LEADERSHIP TITLES

A BLENDED STRUCTURE LEADS TO NEW ROLESEmerging at the center of this blended transformation is a new executive leadership role — the Chief Marketing Technologist (CMT). Although the position may have different naming conventions, the job description is much the same: aligning marketing technology with business goals, serving as a liaison to IT, and evaluating and choosing technology providers.

Regardless of the title, CMT leaders establish a technology vision for the marketing organization, which is essential. They champion greater experimentation and more agile management to meet marketing demands. And they are change agents, working within the marketing organization as well as across the company’s leadership team to create competitive advantages that are best executed through a holistic strategy.

Working in conjunction with the CIO, the CMT may create a center of excellence where both IT pros and marketing leaders collaborate to advance the business’ goals. Decisions must also be made regarding where the critical skill sets should reside, how they’re budgeted, and what the reporting lines are. Such strategies can often be determined by mapping the stages and value of data throughout the customer journey and defining the appropriate capabilities and responsibilities. In data-driven companies, skill sets should not be distinguished or defined solely by business unit, marketing, or IT.

AT THE NEXUSThe CMT sits at the intersection of four groups of stakeholders, serving as a liaison and aligning goals, support, and strategy.

The Chief Marketing

Technologist

The CIO and the IT

Organization

Outside Software and Service Providers

The CMO and Other Senior

Marketing Executives

The Broader Marketing Team

Regardless of how the organization is structured, the use of big data and complex marketing technologies is at the heart of successful data-driven marketing. When working as a team,

however, the CMT and CIO can build a winning relationship that has huge benefits for the enterprise as well as the customer.

DETAIL OF ORGANIZATIONS THAT HAVE A CHIEF MARKETING TECHNOLOGIST

2013 Study 2014 Study

100%

64%

75%

88%

79%79%73%76%

68%

92%

71%

71%

60%

85%

73%

82%

71%75%

67%

77%

66%

79%

92%

81%

70%

72%

78%

Tota

l

$500M-<

$1B

$1B-<

$2B

$2B+

B2B B2CBoth

Finan

cial S

ervic

es

/Insu

ranc

e

High-

Tech

/Tele

com

Manuf

actu

ring

Media

Retail

Health

care

Gover

nmen

t

Source: Gartner (January 2014)

SUMMARYMarketers today find themselves on ever-shifting sands. Not only are digital channels constantly expanding and regenerating, but also there is growing pressure on marketers to embrace and understand the burgeoning technologies that are transforming modern marketing. The marketing and information technology arms of today’s organizations need to join together to create a unified, well-oiled marketing machine that provides each and every customer with a relevant, personalized marketing experience.

To achieve that holistic, pertinent brand expression, marketers need to get a grasp on the technical backend capabilities of today’s business-critical marketing technologies such as automation, CRM, and digital messaging; and likewise, IT must try to understand marketing goals and consider those goals when making technology decisions. This evolution of roles could provoke an organizational evolution, so corporations must be amenable to restructuring and letting the business scaffolding evolve alongside the emerging technological.

Marketing and technology are now (and must continue to be) inextricably linked, so it’s critical to tear down the wall between them and create a unified approach with user experience and customer preferences always guiding decisions. Today’s connected customers dictate the marketing experience, so companies must give the people what they want: a smart, relevant dialogue, with data driving the topic of conversation.

LEARN HOW MARKETING AND TECHNOLOGY TEAMS ARE LINKING ARMS TO DELIVER SUCCESSFUL DIGITAL

MARKETING CAMPAIGNS

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