4 Predictions for Martech in 2018

Posted on by Sam Melnick

What’s to come in the months ahead? Here’s four key martech predictions for the new year.

1. Smaller marketing budgets will lead to smaller tech stacks

Gartner found that marketing budgets are decreasing in 2018, and so is spend on martech.

This is less of a doomsday prediction, and more of a commentary on the state of the industry. While AI, predictive analytics and other buzzwords get much of our attention, the reality is most marketing organizations are simply not ready to fully take advantage of these advanced technologies.

Instead, those that were able to keep—and grow—their marketing budgets in 2018 have realized they need to take an honest look at their martech stack and make decisions about where to spend their limited budget. The foundational elements of data, technology and process are a focus for many organizations.

In 2018, more marketing leaders will reduce their spend on superfluous marketing technology to focus on optimizing their core tool sets, including CRM, marketing automation and marketing performance management.

2. A renaissance in back office technology is coming

The next martech renaissance will be focused on the back office, or strategic arm of the marketing organization.

That drop in marketing budgets from their peak (12.1% of company revenue in 2016) to 11.3% in 2017, is largely due part to marketing leaders being too distracted by tactics and execution, according to Gartner.

Much effort (and money) has been put into tools and tech that manages customer-facing execution, but there is a gap to those tools that connect the planning, budgeting and measurement. This is the brains of the operation, and those companies that are still using spreadsheets, slide decks and borrowed technologies from finance and sales will find their ability to execute limited.

This renaissance will be driven not only by the necessity of having less money to work with, but also the increasingly shortened tenures of CMOs. Given this pressure, we predict 2018 will see far more focus on these “back-office” or behind the scenes marketing processes, and related technology, as CMOs think more like PnL owners.

3. CMOs will find an ally in the CFO, or else

Many enterprise organizations are showing a renewed focus on better managing their budgets to optimize the impact of every dollar spent. This is because the CFO is holding the CMO to a very high standard, where marketers act as true stewards over their budget dollars, demonstrating accuracy, impact, and transparency—key traits to earning the trust of a CFO.

For marketing teams who succeed, 2018 will see a closer relationship between marketing and finance (especially as budgets are tightened.) Allocadia research found companies that expect larger budgets and increase in revenues are 3X more likely to align the CMO and CFO.

Those that haven’t figured out this critical relationship will need to do so in 2018, or likely be shown the door.

4. The next Chief of Staff to the CMO… MOPs

These changes are driven by the rapid increase in pressure brought upon every CMO, who today must be in total control of their organization and its results.

The trifecta described above (focus on back office marketing technologies, foundational capabilities, and accountability to the business) has created a new VIP on the marketing team marketing operations.

For many organizations, marketing operations has emerged as the most capable resource to step in, and help the CMO in their quest, especially with responsibilities related to data cleanliness and marketing resource management.

These trends indicate a larger movement in the marketing industry towards becoming a department laser-focused on business impact, stewardship over company resources, and visibility into results. Tomorrow’s marketing leader is accountable, ready to move quickly with speed and agility, and confident in where they spend each dollar.

Sam Melnick is the vice president of marketing at Allocadia.

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