Why CMO Tech Spending Is Good For IT

By now, most CIOs have heard the Gartner prediction that chief marketing officers will outspend CIOs on technology by 2017. Whether or not you agree with that prediction, there's no question that marketers are now influential technology buyers, even if they're not taking swaths of responsibilities away from CIOs.

The onslaught of interactive marketing and digital commerce -- starting with the Web and email and more recently venturing into mobile and social interactions with customers -- is behind much of this technology spending. It has also put marketers under pressure to reconsider how they measure, manage and execute marketing across traditional channels, whether print, TV, radio, in-store, Web or call center.

Technology is finally doing to marketing what it did to financial markets two decades ago: driving it toward automation and real-time analysis, says marketing strategist David Meerman Scott, author of The New Rules of Marketing & PR.

On the automation front, specialized workflow systems with supporting asset management and collaboration features are helping marketers develop and execute campaigns at scale and with the speed demanded by fast-moving consumer trends. Analytics is bringing more precise measurement and, hopefully, better planning and smarter decision-making, both within individual marketing channels and across channels, letting companies adjust their investment mix for maximum impact.

Too many marketing organizations have been underinvesting in technology, relying instead on manual tracking using spreadsheets and email. But those old ways are breaking down given the demand for scale and speed. The future of marketing is going to be "much less art and much more science," says Meerman Scott.

The science relies on analytics, requiring plenty of data. This should be welcome news to IT pros, who are in the best position to help with the inevitable data management challenges. But CIOs "can't just wait for CMOs to say, 'Please help us,'" warns John Kennedy, VP of corporate marketing at IBM.

Only 10% of 550 marketing execs surveyed by the CMO Council put a priority on improving collaboration with their IT organizations this year, despite the fact that 43% of them plan to hire marketing or customer analytics talent, 41% plan to deploy email marketing automation and a third plan to deploy website performance optimization and mobile apps. If marketing and IT teams don't work together, this marketing tech spending won't reach its full potential. "CIOs have a role to play at all levels of marketing, particularly in aligning the technology so it can scale," Kennedy says.

Understand Marketing's Needs

One of the problems is that CIOs often don't get how the CMO role has changed. "The marketer's role has expanded from just driving demand and sales," Kennedy says. "Now they're also creating content, customer experiences and customer engagement" through Web, mobile and social channels.

IT leaders must map what marketing does these days to the emerging technology that backs various functions. The three main categories of marketing management systems, as defined in Gartner's Magic Quadrant, are CRM-based multichannel campaign management (MCCM), integrated marketing management (IMM) and marketing resource management (MRM). Automation and analytics show up in all three categories.

MCCM systems are used for such processes as managing loyalty-card programs and promotional content. Their decision-support capabilities let companies quickly change inbound and outbound marketing offerings. IMM systems track a project from start to finish: from developing marketing concepts and allocating resources (money and people) to creating, testing and executing campaigns and evaluating results and feeding that analysis back into the next concept-development phase. MRM systems have supported strategy and planning. They're now moving into operations by incorporating creative workflow management, asset management and fulfillment capabilities for the logos, videos and other materials used in marketing campaigns.

IBM was among the first big tech vendors to jump into marketing technology when it acquired Coremetrics (Web analytics) in 2010, followed in short order by acquisitions of Unica (MCCM and MRM), Sterling Commerce (e-commerce) and, in 2012, DemandTec (marketing analytics) and Tealeaf (customer experience analysis). Adobe acquired Web analytics vendor Omniture in 2009, expanding into MCCM. Teradata acquired Aprimo (MCCM, IMM and MRM) in 2010. SAS acquired Assetlink (MRM) in 2011.

Salesforce.com has focused on the social channel with its 2011 acquisition of Radian6 (social analytics) and Buddy Media (social marketing). Last year, Microsoft acquired MarketingPilot (IMM and MRM) and Infor acquired Orbis Global (MRM).

In the latest big marketing tech deal, Oracle announced in December plans to acquire Eloqua, which does MCCM. Competitors are downplaying Oracle's $871 million deal as mostly focused on business-to-business marketing, but Oracle could easily extend and integrate Eloqua's technology with its other assets to address consumer marketing, says Forrester analyst Rob Brosnan. Combined with other Oracle cloud apps such as Oracle Fusion CRM, Eloqua has the makings of a fresh replacement for Oracle's aging Siebel CRM platform, Brosnan says.

IT teams must understand the five groups within marketing organizations and the key technology investments they're making, Forrester contends. The list starts with CMOs at the top and then moves down to brand marketers, marketing operations, relationship marketers and interactive marketers (see below). Analytics is on the list at every level, and automation is needed at every level below the CMO.

What Marketing Technology Buyers Need
Group	Key Needs	Representative Technologies
CMO and other marketing leadership	Focus on all aspects of marketing. Key areas include measurement, strategy and marketing optimization.	> Marketing performance management > Marketing mix modeling > Attribution
Brand Marketer	Focus on building the brand and creating compelling brand content. Work with agencies, media buying firms and creative shops.	> Brand measurement > Marketing resource management (planning) > Asset management and localization
Marketing operations	Central organization that focuses on budgets, processes, vendor relationships and fulfillment.	> Marketing finance management > Marketing resource management (workflow) > Production and fulfillment management
Relationship Marketers	Emphasize customer insight development and direct communications.	> Descriptive and predictive analytics > Campaign management and marketing automation > Interaction management and contact optimization > Event-based marketing
Interactive marketers	Focus on digital advertising, itneractive marketing and emerging media strategy.	> E-mail, search, display, social and mobile > Web analytics and online testing > Behavioral targeting and recommendations > Audience management
Data: Forrester Research