Marketing teams are under pressure to improve ROI from the technology they’re paying for. Having a lean marketing tech stack has always made a lot of sense and in economic uncertain times like these, it makes more sense than ever. This article explores how you, as a marketer, plan and execute your business plan(s) while balancing the marketing budget and not overspending on marketing technology.
By: Niklas Nikolaidis on October 23, 2023 | Reading time: 5 minutes
How did we get here?
At one point, Chief Marketing Officers were spending more on technology than on staffing. Technology was perceived as the answer to all the external changes marketing was facing: Rapid marketing platform development together with external factors like privacy laws, platform changes from Apple and Google, and consumer channel fragmentation with new channels emerging (hello Tiktok!) created a market very few marketers were prepared for. Suddenly, just running Google Ads and Meta campaigns didn’t bring in the ROI it used to.
A couple of years after the martech spending peak, what’s happening is that technology that’s been bought is being used to a lesser degree.
Why is marketing technology being used to a lower degree?
Here’s a chart that’s either very worrying or wholesome, depending on which side of the marketing technology table you are on.
During the last three years, marketing technology utilization has decreased by 20 percentage points (!) from 58% to 38%. However, the downward trend of marketing technology utilization is not the same as saying that B2B no longer buy marketing technology due to a global pessimistic outlook on the economy or instability in certain regions.
What can cause this decrease?
- The macro-environment pushes companies to focus on cost efficiency and removing redundant technology. Staff reduction due to economic pressure could also cause technology usage to decrease, as marketing platforms need someone to own them and spend time in them.
- Post-pandemic transformation hangover where too many tools were purchased without really having a well-thought plan or roadmap for the technology.
- A reaction to hard-to-understand sales copy on marketing technology platform websites where B2B customers and pros need help understanding the real benefit and value of using that specific platform.
- Overlaps between platforms as tech providers want to capture a larger share-of-wallet from their customers, expanding and adding features that traditionally have been core pillars of adjacent platforms (CRM platforms adding marketing automation features, for example).
- Are we moving faster to a composable future where the marketing tooling we select will depend on how well it fits the overall technology stack rather than its full-service offering? (Best-of-breed vs single suite approach).
- Finally, marketing, in general, is more technical now, making it more crucial than ever to grasp what tools are needed to achieve the desired business outcome.
With this added complexity, how do you, as a marketer, plan and execute your business plan(s) while balancing the marketing budget and not overspending on marketing technology?
Even though the technology landscape is growing every year, remember that it’s better to start small when it comes to marketing technology.
- Experiment with as few use cases as possible until you’ve tested and learned what you need to move to the next level.
- Pay as little as possible until the tool’s feature has proven its value in your marketing operations. Start with open-source or free tiers and move on up from there.
Recommendation on how to increase marketing technology usage and cut costs
Here’s a 4-step process for making sure you are spending your marketing technology budget where you should spend it:
- Audit your current tech stack to find out
- Overlaps between different tools and connecting tools: Can one tool do more things than we first anticipated, and does it integrate with the same tools as other platforms we use?
- Usage vs cost: How much or often do we use the tool in question on a daily/weekly/monthly basis? Low usage and high prices mean all lights should blink red on your martech radar.
- Rank the tool’s importance from 1-5: If the tool scores a “1” then it’s time to remove it and save money, as you can most likely perform the same action elsewhere.
- You should arrive at an overview where you can identify overlaps, low utilization, and inefficient tech in your marketing stack.
- With the tools you’ve identified as 2-5 in importance, can you clearly see their part in driving revenue for you and driving business growth? How does each tool help you reach your KPIs? Or will it be that revenue enablement pillar for you in the next 1-2 years, so you need to keep it? Try to be brutally honest here and make sure that there is a straightforward job to be done for each tool. If not, cut it. While you clean up among platform devices, maximize value and invest in your business integrations, and see how the remaining ones can be amplified by integrating them for joint or broader use cases. (Abandoned cart retargeting, for example, where your CMS needs to integrate with your marketing automation tool and your paid acquisition channels)
- Assess your data situation and look at improving or eliminating any data you’re having issues with. Trust me, we dedicate too much time and effort to collecting way more data than we end up working with. This will amp up your marketing operations setup with cleaner data input.
- Consider consolidating some marketing activities within one platform, as this will reduce your costs and speed up marketing work. One additional gain is often that you will minimize risks of data loss or discrepancy between systems if it all happens in the same platform. Don’t forget to negotiate well if you choose this path as you will be in a favorable position.
Looking ahead, it’s a good time to rethink and re-imagine how you work with marketing technology and operations. Cutting costs isn’t as exciting as testing new platforms and features, but ensuring you have control of what you spend money on, is a prerequisite for marketers in the challenging and exciting years to come.
About the author
Niklas Nikolaidis is a Partner, Marketing Technology and Retail Media Lead at ARC Arise Consulting and Curamando, two leading digital consulting firms in the Nordics. He is also a Limited Partner at FirstPartyCapital, a venture fund focused on adtech, martech, and digital media startups in Europe and APAC.