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Gartner rips CMOs over martech while business demands ‘more with less’

The tech analyst likens CMOs spending and utilization of martech to gambling with the marketing budget but the real culprit may well be short-term thinking in business

CMOs are buying and implementing marketing technology (martech) that their marketing teams aren’t using. That’s according to the latest Gartner 2023 CMO Spend and Strategy Survey:

“CMOs have seen technology investments tumble into new lows of unproductivity, with utilization rates falling from 58% in 2020 to 42% in 2022.”

As a result, 75% of the 410 CMOs and marketing leaders surveyed say they feel pressure to cut martech investments this year.

That all seems causal, but then the survey takes a strange turn. When Gartner asked CMOs where they will put their budget, the survey found that most plan to spend more on martech while cutting labor.

Gambling with the marketing budget

Gartner Marketing practice Chief of Research and VP Analyst Ewan McIntyre didn’t hold back in his assessment:

“Like gamblers looking to write-off their losses with the next bet, CMOs are attracted to the allure of newer technologies, no doubt amplified by the chatter around generative AI. They are hungry to see its potential to transform marketing campaigns and content creation. While this hunger to invest is understandable, it illustrates the sunk-cost fallacy that more tech is always better.”

Those are pretty strong words, but then McIntyre turns more pragmatic:

“The willingness to let the majority of their martech stack sit idle signifies a fundamental resource disconnect for CMOs. It’s difficult to imagine them leaving the same millions of dollars on the table for agencies or in-house resources. This trade-off of technology over people will not help marketing leaders accelerate out of the challenges a recession will bring.”

That seems to have more utility and is more in line with Gartner’s longstanding advice: get the right people in place, fix your processes, and then add technology. If you don’t do it in that order, you risk doing the wrong things, faster.

Pressure on marketing headcount

What the survey doesn’t seem to inquire about – at least publicly – is the pressure on headcount. It’s a big question too because when the economy turns south, marketing is the first-place businesses cut. This makes it virtually impossible for CMOs to make sustainable progress, even if they go about things just like the analysts recommend.

In other words, by the time they hire the right marketing people, improve their departmental processes, and finally procure marketing automation – the economy has gone through another cycle. The next thing they know, the CFO is looking for headcount cuts to save cash.

As Gartner says in its survey announcement:

“Seventy-five percent of CMOs are facing increased pressure to ‘do more with less’ to deliver profitable growth in 2023. Because of this, 86% of marketers said they must make significant changes to how the marketing function works to achieve sustainable results.”

Establish a marketing budget and stick to it

The word “changes” is often used as a euphemism for restructuring. Indeed, the only thing CMOs can invest in – in times like these – are levers that promise to drive productivity.

Ergo, CMOs invest martech.

I believe the real culprit here is short-term thinking in business. Just look at the graphic depicting the marketing budget as a percentage of revenue.

It’s 11.4% in 2020, the same year marketing bought a ton of martech. The year after, in 2021, they saw cuts of more than 40%.

Those cuts focused on people, so naturally, your martech utilization will drop. Even when the budget recovers, somewhat, in subsequent years, CMOs are hiring people that weren’t part of the vision that went with the procurement of that technology.

Marketing is cumulative. It requires consistency for optimal performance. Yet the incessant stutter steps businesses take prevent marketing from ever finding its cadence. Long-term planning – across people, processes and tech – is virtually impossible. That seems more like gambling to me.

If businesses want to see better utilization and ROI out of their investment in martech – then establish a marketing budget and stick to it.

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Image credit: DALL-E, “a robot looking very tired in the style of van Ghoh”

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