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What technologies is marketing spending on?

Spencer Ante reports in today’s Wall Street Journal that As Economy Cools, IBM Furthers Focus on Marketers. The title and the short article are focused on IBM’s well-known emphasis on marketers, but the article is of more general interest in driving home the extent of one trend in corporate technology spending – the growth of marketing spending on technology – and provoking a number of questions about what it means. At only 600 or so words the article may be useful for some of you to forward to others in your organization that would benefit by thinking more about the effects of this trend.

The article quotes some recent Gartner research that marketing budgets are roughly 3 times IT budgets as a percentage of revenue, and grew between 2011 and 2012 while IT budgets shrank. Current marketing and IT budgets are both expected to increase, but with marketing budgets increasing at twice the rate of IT budgets – 9.0% vs 4.7%. Gartner has also predicted CMOs will have more control over technology spending than CIOs by 2017. Also, “In total, Gartner says companies spent up to $25 billion worldwide on marketing software last year, up from about $20 billion the previous year. Overall corporate software expenditures totaled $115 billion…”. These are impressive numbers, and our own experience based on discussions with our conference attendees, consulting clients, and other analysts and investors, suggests a broad consensus with the trend. Certainly IBM is big believer.

But the next level of detail is even more important for technology vendors and all CMOs who want to benchmark their competitors spending and strategies – for example, what are CMOs spending money on? what should they be spending on” and how do they organize their infrastructure to learn about, purchase, and manage new marketing technologies, and work with IT?

A vocal segment of the technology press suggest that the future of marketing is all about “social”. A favorite prediction of analysts is that the “Web is dead” and the future is all about mobile. Savvy marketers are beyond such oversimplifications. As important as social and mobile are, I think it is safe to say they are still a small percentage of the $25 billion Gartner number. I would love to be enlightened by anyone who has more details on what the percentage is, and what technology categories others think will benefit most from the increase in marketing spending.

Why is this?

Part of the reason are expensive legacy systems and infrastructures. But a bigger reason is that everyone (not just marketing) is learning. Most of the new technologies have some learning curve, but are not rocket science. The really steep curve is learning how to integrate and utilize new technologies, and especially data they provide, effectively – and that is something we all: technologists, marketers, analysts, will be learning about for awhile.

Learn more at Gilbane Boston.

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Marketing, Web Content Management, and Social Software

At the industry analyst session at Gilbane Boston last December, one of the points of discussion was how well spending on web content management systems had held up during the depths of the recession compared to other parts of IT budgets. Everyone on the panel agreed, and Forrester and IDC both mentioned research showing a healthy market for WCM and expected growth (if someone remembers the numbers please comment). This was a surprise to much of the audience, but obviously not to the vendors (well, at least to those reaping the benefit).

Why has/is web content management growing? The one word answer is ‘marketing’ – not vendor marketing, although they are mostly in tune with, and encouraging, the more aggressive pro-activeness of enterprise marketers. And why are marketing executives now better at demanding, and getting,  budgets for WCM? There are a number of reasons, including the paradoxical “to save money” (system costs have come down, large system service contracts costs have not, and SaaS solutions and open source solutions are growing). Most importantly however, is that most organizations have finally figured out that ‘marketing’ means ‘multi-channel, digital, and interactive/social marketing’. This is fundamental. The companies who took advantage of the recession to invest in learning what this means, experimenting with tools, customer interactions, and system integrations, have gotten a bit of a head start, but nobody can ignore this – this is not a ‘nice to have’.

Why is the focus on ‘web content management’ and not something else? All product categories are fluid, and eventually there will be a category, buzzword/phrase TBD, for multi-channel content management that includes tools for social, mobile, tablet, channels etc. But for the foreseeable future, the corporate website(s) will be the hub, however it is accessed.

Well, all I really meant to do in this post was point to the special guide to marketing-focused sessions at Gilbane San Francisco in May, but now you know why. These sessions will also be useful for those in IT (along with our technology track) who support marketing initiatives.

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