How to spend it: Stark lessons from Gartner’s CMO survey
The results of Gartner’s CMO Spend Survey 2020 are in. Against the backdrop of Covid-19 the big question was: how are marketers intending to fuel growth in 2021?
A striking finding was that CMOs appear much more optimistic than the rest of the C-suite. While CEOs and CFOs are scenario-planning for a second wave of the pandemic, CMOs are budgeting for a swift return to normal in 2021 with many, in fact, projecting an increase in investments across resource areas and digital channels.
Gartner warns that marketers need to have a realistic view of the coming financial obstacles if they are to survive the shocks of the current climate. “The brands that succeed in uncertain times are those that recognize the change around them and adjust to it, rather than wait for things to go back to normal,” advises Ewan McIntyre, vice president analyst for Gartner Marketers.
Marketers are in a challenging position: They’re both the potential targets for another round of budget constraints and the growth drivers for their organizations. CMOs, therefore, are hedging their bets by looking at how they can drive growth even as second wave scenario planning continues.
Now is a great time for marketers to balance their approach by taking a hard look at their technology stack and where they’ll get the best returns from their spend. Here are my top 3 takeaways from the report:
Martech: use it or lose it
It’s a sign of marketers’ enduring faith in technology that martech budgets have so far avoided cuts. In fact, 68% of CMOs expect to increase investment over the next 12 months in a bid to accelerate bounce back. However, Gartner warns that more technology is not necessarily the answer and rarely delivers the promised short-cut. Most companies are already saddled with a burden of unused martech, with marketing leaders confessing to using just 58% of their stack’s existing capabilities.
It takes time for the dream to fade, but the survey revealed that marketers are starting to wise up to the martech reality gap. When looking at the percentage of CMOs citing which investments have their top priority, you can see that change in strategy in two key areas:
- Analytics, while still a top priority, has dropped 10% year-over-year as marketers struggle to build even basic capabilities
- Personalization has also been demoted, dropping to just 14%, due to poor ROI, consumer backlash and regulatory challenges around customer data management. The trend reinforces Gartner’s bold prediction that personalization will be all but dead by 2025.
I’ve written before about the problem of martech overload and that the impacts extend far beyond the problems of failed utilization and wasted investment. Scott Brinker pins the issue succinctly in his article: Marteck stack utilization is a misguided metric: “Everything we do costs something in time, effort, resources, complexity, and/or impact on customers. So if it’s not adding value, it’s at the very least an opportunity cost on other value creation activities we could be investing in.”
With budgets under threat, marketers would be wise to take a close look at their existing technology investments and whether they are truly delivering value before shelling out for more. Which brings me to my next point.
Lead with the head
A second, more positive, finding from the survey is that brand strategy has leapt from near bottom of CMOs list of priorities to top the table, as marketers scramble to re-attune to their markets and secure their place by delivering authenticity, relevance and value. The fact that strategy has for the first time overtaken tools represents a welcome reality check as marketers step back from the technology arms race and do some hard thinking up front.
As marketers get back to basics, it’s a golden opportunity for enterprises to reassess their technology stacks, cut the slack and emerge with a more productive alignment of tools and business goals. As Gartner advises, now is the time for CMOs to “build a plan that sets out the costs that can be eliminated, the essential costs that must be shielded and the costs where greater efficiency and ROI can be delivered.”
The future is flexible
While Gartner pleads caution and warns marketers to prepare for further cuts, the pandemic has accelerated the move to online for both businesses and their customers. With digital now the dominant channel, marketers need elasticity to embrace the available opportunity. But how to square the circle of financial uncertainty with rising demand?
History has taught us that the companies that won out in previous recessions, accelerate in the turns. Rather than slashing budgets, successful companies focus on strategy, scalability and optimizing costs: What you spend now will impact you down the line.
Many brands are finding the answer in SaaS. Moving digital operations to the cloud enables companies to free-up cash, increase agility and de-risk their technology investment. And this is especially true of your CMS. Prior to the arrival of Covid-19 many companies were preparing to transition to the cloud to realise precisely these benefits, but the pandemic has massively accelerated the trend.
Because Crownpeak DXM is SaaS, our customers pay only for what they need, and can immediately scale to meet demand. The majority of resource and infrastructure costs are reduced or eliminated, saving our customers 30% or more on previous carrying costs (try the math for yourself). While marketers everywhere face the likelihood of an enforced diet, the good news is that by making smart spending decisions now and cutting the slack, enterprises can emerge with a leaner, more agile and effective marketing machine.
To speed transformation during these challenging times, for a limited time we’re offering the opportunity to migrate to Crownpeak for free.