Martech budgets are falling to historic lows just as generative AI arrives in martech stacks. So, how do marketing leaders make the case for expensive new tools while being pressured to produce profitable growth? Creating value from technology investments requires coordinating both martech and multichannel strategies.
Martech at a crossroads: Rebalancing budgets and adopting generative AI
Years of aggressive investment in martech have produced tech stacks that may be replete with capabilities but are rarely used effectively, or sometimes much at all, by marketers. Recent Gartner research shows complexity depresses usage, calling into question why CMOs have invested so much for so little adoption. Increasingly, we find leaders redirecting budget to paid media spend where it can drive growth. This is occurring at the moment that generative AI arrives, promising to boost marketer productivity.
In a somewhat ironic twist, marketing leaders are faced with a choice of how to respond: rebalance budgets for growth and ROI through media or purchase more technology to make effective use of the tools they already own.
For example, in the last decade marketers rapidly adopted multichannel hubs to orchestrate journeys across touchpoints and better target customers with personalized marketing. However, the extra complexity in data integrations, analytics and content creation hampers usage to the point where only 1 in 6 marketers use most of their hub’s capabilities. Orchestrating journeys also slows production because of the extra coordination and development work in building journeys
Multichannel hubs are only one example of a seemingly inescapable cycle: Something changes, maybe an innovation or a new channel comes along — marketers respond by buying technology, only to find later that the results didn’t live up to their hype. This cycle happens so frequently that Gartner named it the “trough of disillusionment.”
So when a new technology comes along, marketers face a choice: Ignore it or adopt it? Should they wisely optimize what they have? Or is it more better to make the leap? Which will give them a competitive advantage?
Dig deeper: Do CMOs really understand how their teams use martech?
Boosting value by coordinating martech and multichannel together
You can escape this dilemma by coordinating martech and multichannel strategy together and embracing a new playbook to determine whether to iterate or transform.
First, assess your key business challenges in two key dimensions. Do the challenges require a new change in customer engagement, perhaps to more frequent interactions across a broader range of channels? And do those challenges require a major shift in martech? Suppose your organization has already laid a strong foundation with modern technologies and is ready to implement AI. In that case, you just need to execute and iterate your strategy, developing it for your market.
Some challenges — such as leveraging generative AI — may require a transformative investment of attention and resources. For some organizations, using a mobile app to boost engagement requires a real leap forward, necessitating a significant change in the tools marketers use and how they use them.
With AI, however, all marketers are forced to contemplate this decision: optimize what you have or make a major leap into the unknown. Be wise and wait, or leap before competitors figure it out.
To determine which course to take, ask questions like “How much do you think generative AI will transform your industry and how fast?” or “What is your current martech utilization?” or “How well aligned is your martech stack to your multichannel needs?”
When considering an influx of channels and difficulties with customer journey orchestration, take the same approach to a multichannel dilemma. Either optimize proven channels and keep investing in the same ones or completely realign channels toward valuable customer outcomes.
Ask questions such as “How competitive is the customer experience in my industry?” and “How engaged do customers want to be with my brand?” and “How many interactions do customers want per month? Is that number increasing? If so, how fast?”
To coordinate the adoption of novel martech capabilities and their effective use in multichannel programs, you can either iterate or transform using one of four strategies.
1. Accelerate: Enhance existing martech and multichannel strategies
Use reliable methods such as martech audits and roadmaps to provide incremental enhancements for both martech and multichannel needs. Regularly reevaluate the position to ensure the roadmap is moving at the right speed and direction.
In terms of marketing technology, look for overlaps between capabilities and consolidate redundant tools. Additionally, identify high-potential opportunities in the channel strategy where customer journeys can be amplified.
2. Revive: Prioritize engagement with a channel-adaptive strategy
Focus on strengthening the partnership between IT and marketing by building a shared digital vision. This will ensure alignment and collaboration between the two departments. Also, consider adding new channels or routes-to-market based on the business goals and customer needs.
Expanding your martech use cases to support journeys that adapt to needs revealed by real-time signals is recommended. Rebuild journeys using the voice of the customer and quantitative research to understand their needs and create an effective channel strategy.
Dig deeper: How to do an AI implementation for your marketing team
3. Augment: Develop capabilities from novel martech
Develop a strategy that aligns your marketing technology investments with your multichannel marketing efforts. Utilize size-of-opportunity modeling to analyze emerging use cases, assessing their feasibility and impact. Collaborating closely with marketing teams ensures that transformations deliver maximum benefit and utilization.
When it comes to marketing technology, prioritize generative AI use cases that can be leveraged across multiple marketing tools, optimizing efficiency and effectiveness. Additionally, the channel strategy should be built by reconstructing customer journeys using the voice of the customer and quantitative research to gain a deep understanding of their needs and preferences.
4. Revolutionize: Pilot new go-to-market models with AI
Develop a strategy that coordinates marketing technology investments and multichannel marketing programs by following these key recommendations:
- Evaluate the potential by gauging customer receptivity to a higher level of engagement, ensuring that any new initiatives align with customer preferences.
- Assess the time available to generate a new self-perpetuating engagement cycle, considering the resources and capabilities required. Seek composability in marketing technologies to increase adaptiveness and flexibility in your marketing stack.
- The channel strategy should involve upskilling multichannel teams and restructuring the budget to support adaptivity, allowing seamless integration and optimization across various channels.
This new framework for grounding both martech and multichannel strategies will help you mitigate the high-stakes and interdependent decisions surrounding AI.
Audrey Brosnan is a Senior Director Analyst in the Gartner Marketing Practice. She presented live on this subject and others at the 2024 Gartner Marketing Symposium/Xpo, June 3-5 in Denver, CO.
Dig deeper: AI in marketing: Examples to help your team today
Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.
