Disillusionment with Martech deepens as usage rates rise

The latest findings from the CMO Survey provide new perspectives on the current state of marketing strategies. A prominent theme highlighted in the survey is the increasing pressure on CMOs to demonstrate value and return on investment (ROI) in the midst of a changing marketing landscape.

Due to the varying questions asked in the Fall 2024 survey compared to the spring edition, a direct comparison between the two is not feasible. Instead, this analysis will concentrate on the martech section of the survey, drawing on other sections for context and hypotheses regarding the results.

Budget trends and challenges

Despite CMOs experiencing higher budgets, marketing budgets as a percentage of total company budgets have decreased, dropping to 10.1% in Fall 2024 from a peak of 13.8% in September 2022.

Furthermore, marketing budgets as a percentage of company revenue saw a decline from 10.1% in spring 2024 to 7.7% in Fall 2024, marking the lowest level in over three years.

When companies aim to boost revenue growth by cutting costs, marketing budgets are often the first to be affected, with executives opting to reduce them 44.6% of the time, more frequently than any other area.

Dive deeper: Strategies to enhance martech utilization

Martech investment and usage patterns

On the other hand, CMOs have slightly decreased martech spending as a proportion of the total marketing budget, down by 0.9% from spring 2024.

However, there was a 1.4% increase in martech usage during the same period, indicating potential stack consolidation or platform replacements to reduce costs.

Martech’s impact on performance and expectations

Marketing technology is still perceived to have an above-average impact on company performance, with a score of 4.8 on a scale of one to seven, unchanged from spring 2024.

Nevertheless, it falls short of expectations, as 54.9% of respondents expressed disappointment in its payoff, a more than 6% increase from the previous spring.

Dive deeper: Evaluating martech’s impact on company value

The survey also sheds light on how CMOs are utilizing martech platforms:

• Martech tools support 55% of marketing activities, leaving 45% without the use of such tools.
• Only 50% of martech tools are utilized in operations, down from 56% in spring, despite the close ties between martech and marketing functions.
• There is a slight decrease in the focus on enhancing data strategies and reducing data silos, dropping from 51% to 48%.
• The emphasis on marketing experimentation has also slightly declined, from 35.6% to 32.7%.

Collectively, the increase in martech disappointment could be linked to the reduction in martech usage across both marketing activities and company operations.

Recommendations for marketers: Maximizing martech ROI

Marketers encounter numerous challenges beyond the technology stack, but they can play a crucial role in maximizing the value and ROI of martech.

Reconsidering martech’s impact on MOps

Marketers should evaluate each martech platform (e.g., CRM, MAP, CDP) by asking:

• Can this platform reduce reliance on external vendors?

  • For instance, drag-and-drop platforms enable internal teams to create and deploy assets like social posts, templated emails, and SMS messages without third-party involvement.

• Can my team achieve better outcomes using this platform?

  • Could tools with easy-to-edit templates help enhance email communication frequency?

Enhancing customer data collection

Given that marketers are intimately involved in both data collection (e.g., website forms and in-app surveys) and its utilization in customer activation (e.g., campaign creation and deployment), they can influence data quality. Clean data is easier to process and unify across platforms (CDP, CRM, data warehouse), reducing the necessity for extensive ops/IT involvement and enabling quicker utilization.

Key questions to consider:

• Do we have processes in place to collect customer data as accurately as possible?
• Is there accessible data governance for marketers and stakeholders?

Balancing martech investment with performance expectations

While the CMO Fall Survey provides valuable insights, it also raises further questions regarding how companies allocate budgets for martech and effectively utilize these tools. The increasing importance of martech usage is evident. Though not all answers are readily available, marketers can enhance martech value by concentrating on process enhancements and data quality, as outlined above.

Dive deeper: Strategies for boosting martech utilization

FAQs:

1. What is the main theme highlighted in the recent CMO Survey results?
   The growing pressure on CMOs to demonstrate value and ROI amid a shifting marketing landscape.
2. How have marketing budgets as a percentage of company revenue changed in Fall 2024?
   Marketing budgets as a percentage of company revenue declined from 10.1% in spring 2024 to 7.7% in Fall 2024, the lowest level in over three years.
3. What is the impact of marketing technology on company performance according to the survey?
   Marketing technology is seen as having an above-average impact on company performance, scoring 4.8 on a scale of one to seven.
4. How are CMOs using martech platforms based on the survey results?
   Martech tools support 55% of marketing activities, leaving 45% not using these tools.
5. What are the key recommendations for marketers to maximize martech ROI?
   Marketers should reconsider martech’s impact on MOps and enhance customer data collection.