Data, Analytics and Technology Top the List for Marketing Investments
Probably a familiar scenario for many but a marketer’s wish list is often much larger than their budget. So where would marketers invest more if they had the budget? According to a recent survey by Merkle, almost one-third would invest more in data, analytics and technology. Additional areas of investment included digital (16%), paid media (10%) and search (10%).
When marketers do invest in martech and data platforms, they are using a combination of hosting inhouse and using outside vendors. Marketers understand the complexity and expertise required to run these functions and largely prefer to outsource these functions. Of those surveyed, 30% – 42% outsource platform and database support.
An increasing number of brands are increasing investments in the area of predictive analytics. Predictive analytics is the use of data, statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data. This branch of analytics is highly effective in creating hyper-personalized campaigns and experiences.
According to research by Ascend2, 56% of marketers believe that predictive analytics is the most effective AI app for personalization. However, 48% of marketers also state that this is one of the most difficult tactics to execute.
Research by Harvard Business Review highlighted that 61% of enterprise business leaders consider predictive analytics “very important” now, and an even higher 74% believing it will become so in the next two years.
Marketing Data Investments
Brands on average are only tapping into only 47% of their company’s first-party data potential. (MightyHive) A company’s own fist party data is considered one of the most valuable types of data and there is huge room for marketers to improve upon this usage.
Brands in particular plan to invest more in utilizing more of their first party digital data such as mobile app data, social data and online sales data.
In addition to first part data, brands are also investing in second and third party data. According to eConsultancy, brands who are realizing a strong ROI are investing in the following types of data:
- 81% – first party data
- 77% – second party data (this is first party data collected by trusted partners)
- 61% – third party data
If you are familiar with Scott Brinker’s Martech supergraphic listing all the available marketing technologies, you know there is no shortage of areas where to invest. This year, he listed 7,040 solutions!
The sheer number of martech solutions can be overwhelming. CMOs are spending more and more of their budget on these technologies. In a 2018 study by Gartner, respondents reported that, on average, they expected to spend 29% of their budget on marketing technology in 2018, up from 22% in 2017. This makes marketing tech the single biggest investment area for marketing resources.
On average, respondents in the survey spent $682,000 on marketing technology. This number is only continuing to climb. Some of the top areas where CMOs are investing include email marketing platforms, web content management and digital marketing analytics platforms.
B2B Marketing Spend
B2B marketing are also investing heavily in B2B marketers in technology, analytics and marketing programs to improve the customer experience as well as increase revenue according to Forrester Research.
According to the study, 71% of companies are increasing their marketing program budgets, including 37% who are increasing their program spending by 10% or more. It also found that 60% are spending more on marketing technology, including 26% who are increasing their spending by 10% or more.
What types of platforms are B2B marketers investing in? Forrester identified marketing technologies offering “high business value” and worthy of investment including:
- Account-based marketing platforms
- Customer-engagement marketing
- Event-management solutions
- Measurement and analytics
- Programmatic advertising
- Social engagement tools
Additional “high-value” marketing technologies include:
- Content marketing platforms
- Marketing automation platforms
- Social listening applications
- Webinar platforms
Personalization is Driving Investments
In such a highly competitive environment, for both B2B and B2C marketers, many of these investments are driven by the need to provide more personalized customer experiences. Consumers want personalized experiences and brands stand to benefit big. According to BI Intelligence:
- Personalization can lead to increased customer loyalty— 44% of respondents said they would likely become repeat buyers after a personalized shopping experience.
- It can also bolster sales, as 49% of consumers surveyed said they’ve purchased a product they weren’t planning on buying after receiving a personalized recommendation. Additionally, it can increase average order size, with 40% of shoppers reporting that they’ve spent more money on a purchase than planned because of a personalized shopping experience.
- Personalization can decrease returns on impulse buys. Eighty-five percent of shoppers who made a last-minute purchase from a personalized marketing message said they were happy with their order, and only 5% said they wanted to return the item.
In order to provide these personalization experiences, brands must know who their customers are, what they are most apt to purchase next, and then provide personalized, real-time campaigns using sophisticated technology. Investing heavily in data, technology and analytics only makes sense.
Learn more great tactics and strategies on how to provide highly personalized experiences across channels. Download our free Omnichannel Marketing ebook.