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

Image Credit: MattysFlicks via Flickr. CC BY 2.0
Digital
Transformation
What does that
even mean?

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

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