eMarketer Webinar: Marketing Technology—The Developments That Matter the Most in 2016

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Marketing Technology:

The Developments that Matter the

Most in 2016

Bryan Yeager

Senior Analyst

March 10, 2016


Marketing Technology

Steps into the Spotlight

© 2016 eMarketer Inc.Image Credit: MattysFlicks via Flickr. CC BY 2.0

Digital

Transformation

What does that

even mean?

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Businesses are adapting to changes in how and

where people spend their time with media

32.1%

2011

47.7%

2016

Source: eMarketer, Oct. 2015

26.0%

Non-Digital

Digital

Mobile Nonvoice

Time Spent

with Media by

US Adults


By the end of 2016 …

7 in 10 US internet users will use

over-the-top (OTT) video services

Source: eMarketer, Aug.–Nov. 2015

55% of US adult smartphone users will

be monthly mobile banking users

36% of US digital travel sales will come

from smartphones and tablets


Marketers are being tapped to spearhead more

digital transformation initiatives

“Grow revenues”was the top benefit of digital enterprise investments

according to C-level execs

Source: PricewaterhouseCoopers (PwC), Sept. 2015

Marketing execssecond only to CEOs for the top role working most effectively to

integrate and align IT with new business demands Source: Business Performance Innovation (BPI) Network, July 2015


Feeling the pressure of heightened expectations

“C-suite expectations from

their CMOs have skyrocketed.

In addition to their day jobs

orchestrating bread-and-butter

marketing, CMOs are expected to be

chief experience architects, chief

digital officers and be the board’s

consiglieres in the company’s digital

charge.”

—Kashyap Kompella, Research Director,

Real Story Group


Defining ‘digital’ depends on the role

Technology innovation-related activities

Customer-facing technology activities

Synonymous with IT

CMO CIO CDO

1

2

3

Source: PricewaterhouseCoopers (PwC), Sept. 2015

1

Tech investments in all parts of business 4

1

2

3 2

3

4 4


Focus on customers, data-driven initiatives make

marketers ideal for guiding transformation

“The biggest priorities for

digital transformation are

marketing related issues:

transforming the

customer experience,

commerce and marketing

communication.”

—Ashu Garg, General Partner,

Foundation Capital

“CMOs need to forge

tighter partnerships with

the CIOs and several

other functions within the

organization. … You

need a strategy for the

overall digital

transformation.”

—Kashyap Kompella,

Research Director, Real Story

Group


US marketing organizations now have a diverse

array of roles to support digital companies

Top existing roles

1. Social media (76%)

2. Marketing operations (65%)

3. Customer experience (56%)

4. Marketing technology (48%)

5. Innovation (48%)

Top roles to add

1. Content strategy (40%)

2. Digital transformation (30%)

3. Mobile (29%)

4. Data science (28%)

5. Marketing technology (24%)

Source: Assoc. of National Advertisers (ANA), Aug. 2015


Companies

still have a

long way to go

to achieve

their digital

transformation

goals


Some digital transformation goals are at odds

with marketers’ customary role

74%focused on

attracting new

customers in

2016

40%focused on

customer

retention in 2016

Source: Campaigner, Nov. 2015

Marketing Goals

for US Email

Marketers


Though some marketers place equal emphasis

on acquisition and retention

61.4%

expanding focus

on customer

acquisition

60.6%

Expanding focus

on retention,

loyalty and CRM

Source: Direct Marketing Association (DMA)/Winterberry Group, June 2015

Company Priorities

According to US

Marketing

Professionals


Marketers are excited for more customer

experience and engagement efforts

“Most exciting opportunity” for client-side marketers’

companies in 2016:

1. Optimizing the customer experience (22%)

2. Creating compelling content for digital experiences (16%)

3. Data-driven marketing that focuses on the individual (16%)

Source: Econsultancy, Dec. 2015


Marketers aim to solve new customer

experience problems with existing technologies

“We’ll sometimes forget about the fact

that we can also use a lot of these

same tools [we use for customer

acquisition] to enhance the overall

customer experience for our existing

customers.”

—Tip Rose, Vice President, Enterprise

Digital Marketing, Cardinal Health


The Expansion of the

Marketing Tech Landscape

Continues to Outpace

Consolidation


More spending on data-driven marketing and

advertising is causing tech budgets to swell

56.3%

68.6%

33.0%

24.0%

10.7%

6.8%

2015

2016

Increased No change Decreased

Source: Global Alliance of Data-Driven Marketing Associations (GDMA)/Winterberry Group, Sept. 2015

Change in data-driven ad/marketing spending by professionals worldwide


8 in 10

marketing execs in

North America

expected some type

of increase in

marketing technology

purchases


Innovation far exceeds the level of consolidation

in marketing technology

“There is certainly consolidation

happening, but the pace of

innovation does not seem to

have slowed. You’re still talking

about thousands of companies that

are trying to innovate in the space.”

—Scott Brinker, Editor, Chief Marketing

Technologist Blog


More than one-third of US client-side marketers

have worked with startups in the past year

36.0%

Top areas/tactics for which client-

side marketers work with startups

1. Social media (53%)

2. Content dev/management (49%)

3. Research/analytics (45%)

4. Mobile advertising (43%)

5. Marketing automation (39%)

Source: ANA/Consumer Technology Association (CTA), Sept. 2015


It’s common for marketers to work with several

tech providers to support their practice

1 in 5 reported

working with 11

or more

providers

Some concern

that existing

tech might not

be used to its

fullest potential


Constant re-evaluation is required to ensure

tools are optimally used

“It’s a constantly moving

universe of capabilities.

What we bought yesterday isn’t

going to be the same thing as what

we have in place tomorrow.”

—Cynthia Gumbert, Vice President,

Marketing Technology and Demand

Analytics, CA Technologies


-45.3%38.4%

Investment and M&A activity in the marketing

technology category remains strong

2014 2015

# of Deals

Value

978 979

$26.8B$19.4B

Source: Petsky Prunier, Jan. 2016

Marketing Technology Digital Advertising

2014 2015

# of Deals

Value

439 452

$13.1B$23.9B


Marketing Technology

Strategy Matures, but with

Room for Staying Agile


‘Adopted new

technologies’

topped the list of

changes made at

marketers’

companies within

the past year as

of July 2015


A best-of-breed tech approach is becoming more

popular among marketers

“Marketers are largely

going with a

heterogeneous approach.

They’re trying to

rationalize their

marketing stacks

and cutting down the

random stuff from all over

the landscape.”

—Scott Brinker, Editor, Chief

Marketing Technologist Blog

“When it comes to picking

new tools, a ‘best-of-

breed’ approach

prevails. It is also more

a necessity as the scope

and variety of marketing

use cases is quite large.”

—Kashyap Kompella,

Research Director, Real Story

Group


But it’s not all about the technology. Alignment

with content and sales helps drive success

“If you don't have a good

strategy and strong

alignment with

sales, you’re not going

to deliver the results that

you would like, in spite of

all the accolades that the

software may receive.”

—Tip Rose, Vice President,

Enterprise Digital Marketing,

Cardinal Health

“Marketing technology

experts cannot work

in a vacuum. They

need a set of processes,

content and strategy to

work with them to help

drive the return on

investment from that

technology.”

—Rishi Dave, CMO,

Dun & Bradstreet


Plenty of room for improvement when it comes

to marketing technology tools and investment

4 in 10 US marketers

disagreed that their

company had up-to-date

marketing technology

Just half of marketers

believed their company

was investing the right

amount in marketing

technology


Data-related tech gaps need immediate attention


The Nebulous Task of

‘Integration’ Becomes

Clearer and Easier to

Accomplish


Tech platform

integration

continues to

be a top tech

challenge for

marketers


Marketers are demanding more openness and

ability to integrate from tech vendors

“Culturally, I think anything that prevents

collaboration, open architecture and easy

integration defeats the purpose of

why you would go with

technology in the first place.”

—Chris Curtin, Chief Brand and Innovation

Marketing Officer, Visa


Marketing tech vendors large and small have

improved their ability to talk with other systems

“ Most of the major platform vendors have

grown their ecosystems, but so have the

individual marketing products. As anyone

who makes a marketing software product

now knows, they’re going to get the

integration question.”

—Scott Brinker, Editor, Chief Marketing

Technologist Blog


Connecting the rest of the company to the

marketing technology stack

4 to 6

months

most common amount of

time it takes US marketers

to fully integrate new tech

into marketing efforts

Source: Skyword, July 2015

US marketers’ challenges to

creating data-driven initiatives:

1. Breaking down data silos

between departments (61%)

2. Gathering and parsing data (56%)

3. Defining audience and customer

segments (56%)

Source: Forbes Insights/Turn, Sept. 2015


Marketing Technology and

Advertising Technology

Come Together


The marketer’s view: deciphering devices and

behaviors to deliver an optimal experience

“Customer” “Prospect” “Prospect” “Prospect”


Data is the catalyst for the collision of marketing

technology and advertising technology

“There is a critical shift happening where more

organizations are in the process of blending

these two worlds to get a more granular

and accurate view of their marketing. …

Increasingly, we see a transition happening from

audience-based marketing to more of a user-centric

focus. … We’re starting to look at each member’s

reservation pattern across platforms, such as the

app and the website, rather than looking at

reservation data in these groups separately.”

—Andrew Daley, Vice President, Marketing, Zipcar


Marketers actively exploring ways to more

effectively link first-party and third-party data

37% of CMOs

worldwide said

they were using

digital ad data

to better

understand

audiences in

their CRM

database


Data management platforms (DMPs) are being

integrated with other marketing technologies

22% were in strong

agreement about

using first-party

data to enhance

their ad campaigns


Collision of marketing tech and ad tech: it’s all

about the data

“It’s common in the industry to mix up

your data and analytics strategy with

your technology strategy and seeing the

two as the same. A lot of best-in-class

companies are defining their data strategy—

they’re asking, ‘What data do I have? How do I

leverage that data to build analytics? How do

I use that data in all my different

marketing technologies that I invest

in to drive an outcome?’”

—Rishi Dave, CMO, Dun & Bradstreet


Tech- and Data-Focused

Agencies Are in High

Demand


Senior

marketers

are placing a

significant

level of

importance on

the data and

analytics

capabilities of

their agencies


Analytics are in demand by several measures

Digital experience decision-makers worldwide said

they used third-party vendors the most for

performance analytics and reporting. (Forrester Consulting, June 2015)

4 in 10 US marketing professionals wanted their

agency partners to increase their focus on data and

related functions. (DMA/Winterberry Group, October 2015)

Analytical measurement and attribution services

topped list of most valuable marketing services

among US marketing execs. (The Relevancy Group, April 2015)


Agencies are evolving to meet changing needs

“The role of an agency is

undergoing

fundamental change.

I think there are agencies

that will become more

like technology

companies.”

—Ashu Garg, General Partner,

Foundation Capital

“We use partners who

have deeper subject

expertise within

specific platforms to

really help augment that

team so that we can be

more efficient.”

—Tip Rose, Vice President,

Enterprise Digital Marketing,

Cardinal Health


Agencies planned

to make large

investments in

digital analytics,

content

marketing, data

management

platforms and

mobile marketing


But make no

mistake: marketing

professionals still

find creative and

design capabilities

to be very important


Marketing Tech Developments in 2016: A Review

As the C-suite focuses on data, analytics and digital transformation,

marketing technology is stepping into the spotlight.

The expansion of the marketing tech landscape continues to outpace

consolidation.

Marketing technology strategies are maturing, but with room for

staying agile.

The nebulous task of “integration” is becoming clearer and easier to

accomplish.

Marketing technology and advertising technology are converging.

Tech- and data-focused agencies are in high demand.


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Bryan Yeager

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eMarketer Webinar: Marketing Technology—The Developments That Matter the Most in 2016

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Transcript of eMarketer Webinar: Marketing Technology—The Developments That Matter the Most in 2016