That said, I’m surprised how many CMOs still keep their distance from the tech part of their function. The days of a CMO delegating the martech strategy to their MOps team are at an end. The emergence of generative AI, particularly ChatGPT, has changed everything. 

This article explores why today’s CMOs should prioritize marketing technology strategy and create internal policies for using generative AI.

Why CMOs need to be technology aware

The case for CMO engagement in technology was already compelling:

• Technology enables everything that marketing does. Bad technology choices will impact marketing performance.
• Technology accounts for ~25% of the marketing budget and significantly contributes to customer acquisition costs (CAC). There is a direct relationship between spending and CAC and, ultimately customer lifetime value (CLTV).
• Technology is the source of business intelligence about customers and their behavior, critical information in formulating a marketing strategy. Inaccurate or incomplete information will make strategy formulation difficult.

Dig deeprer: Why CMOs must be the company’s biggest advocates for digitalization

The impact of ChatGPT on marketing

There is no longer a clear demarcation line between technology and content. It’s now feasible to leverage AI to create text, video and animations. More importantly, ChatGPT’s simple user interface has the potential to completely transform how companies engage with their customers and deliver information. 

For me, the simple video that HubSpot produced to introduce Chatspot.ai drove this home. In 19 minutes, Dharmesh Shah, Founder and CTO at HubSpot, demonstrates the power and potential of AI visually and understandably. Every marketer should watch this video and think about how this type of interface and technology might augment and improve the customer journey and experience. 

As vendors introduce new AI-enabled capabilities, it will require reevaluating the components of the martech stack and potentially replacing anchor systems that have been in place for a long time. It’s worth noting that historically, in times of great innovation, new technology leaders emerge and that’s likely to be the case with AI. 

What today might look like mature and stable technology categories (e.g., CRM, marketing automation) may look entirely different within the next five years. Today’s market leaders may not be the leaders of tomorrow. It’s often much easier to start building from the ground up than deal with the technology legacy (a.k.a., technology tax) of an existing platform when trying to provide a leap in innovation. It’s important not to be complacent and to stay on top of shifts and changes. 

Complicating the evolution of the martech stack is the normal cycle of marketing hype associated with “shiny new things.” Companies are adding AI to their product descriptions without actually delivering anything that leverages AI. 

The challenge is to separate legitimate from non-legitimate claims. A straightforward way to test is to look at the size of the data set a vendor is using to deliver their capabilities. Regardless of product category, if a vendor is not working with a large dataset, they aren’t leveraging AI. To be effective, AI needs a large training set of data in order to learn. 

In addition, if a product leverages AI, it doesn’t always mean it is a better choice than an equivalent product that doesn’t leverage AI. It’s important to understand what differentiation their use of AI actually delivers.

A further complication is that a lot of venture capital is going into technology companies focused on leveraging AI to deliver a broad range of new capabilities. There is already an extensive category of generative AI products and an equally robust category of AI detection tools. 

Not all of these companies will make it. At some point, the market will become saturated with investment, the venture capitalists will move on and some companies will implode. 

Dig deeper: AI in marketing: 7 areas where it shines and struggles

The CMO and ChatGPT  

The CMO’s job is to understand where AI, particularly generative AI, fits within the marketing strategy. 

Making that decision requires an understanding of the capabilities and limitations of the technology, the products that deliver those capabilities and the associated ethical and compliance issues that surround AI. 

Italy, for example, has banned ChatGPT (at least temporarily) over concerns that the training data OpenAI used contravened GDPR. Copyrighting AI-generated content is a grey area at the moment. The U.S. Copyright Office has said it will consider copyrights on a case-by-case basis. This is something that is going to evolve over time.

CMOs should consider internal policies around the use of generative AI. I’m more than happy for my team to leverage generative AI for inspiration around email flows and to create multiple versions of content for A/B testing. At the same time, I want to ensure that we proceed cautiously with AI-generated articles, blog posts and other content that may get flagged and penalized by the search engines for being AI-generated. 

While it’s not clear how well search engines can detect AI content today, it’s definitely an area of focus for them, particularly given the concerns related to spreading disinformation and deep fake imagery.

As generative AI gets more sophisticated, so will the technology for detecting it. There’s no point in investing in AI-generated content if it will be buried by a search engine. 

Dig deeper: How CMOs should respond to ChatGPT’s marketing impact

This is not the time to question the value of your content marketing team

One thing that ChatGPT will not eliminate is the need for human content creators — at least not yet. ChatGPT and other generative AI tools can be great content assistants and, at some level, content creators. But they are not a replacement for your content team. 

These tools look back at the data they have. Without data about your new product, they can’t effectively write about it or deliver the nuances of your value proposition and positioning. Marketing strategy, creative direction and decisions need a human touch and will for the foreseeable future. 

The need to articulate an AI strategy

At some point, in an executive or board meeting, CMOs will be asked to articulate how AI fits into the marketing strategy. While the CMO should be able to call on their technology head to talk about technical details, products and implementation, they should be the ones to talk about the overall strategy. 

To be clear, AI and ChatGPT are not synonymous. ChatGPT is a natural language processing tool driven by AI technology that allows you to have human-like conversations and much more with the chatbot. It exists under the category of generative AI. AI technology as an enabler exists in many different algorithms. You can have a ChatGPT strategy, and that may be your starting point for embracing AI, but it shouldn’t be characterized as your overall AI strategy. 

AI has tremendous potential across many marketing categories. For example, it can be leveraged to define micro-market segments, adapt the customer journey and deliver a high degree of personalization. Many of the tools in your stack today may already be leveraging AI. 

Where does the CMO go from here?

Today’s CMOs should prioritize marketing technology strategy and work hand in hand with their technology lead. Advances in AI will serve as a forcing function in this regard. 

If the CMO does not own the AI and technology strategy, they cannot effectively create an overall marketing strategy. It is imperative that a CMO be able to articulate how they will achieve their marketing strategy, and technology is very much a critical piece of that.

CMOs do not have to be deeply technical. They do, however, need to understand the following:

• What’s in their marketing technology stack.
• How each technology product contributes to the marketing function and supports their marketing strategy.
• The relationship between their technology expenditures and customer acquisition costs.
• Where AI (in all forms) has the potential to add value and/or disrupt their marketing stack.
• Know enough about martech stack to manage the technology team and its performance effectively.

At the end of the day, it is the CMO who is measured on marketing’s success. If success is impeded by poor technology choices, the CMO is and should be accountable. 

For those CMOs who have not yet crossed the divide and immersed themselves in marketing technology, I recommend the following:

• Subscribe to the Marketing AI Institute newsletter to keep abreast of the latest in AI and its implications for marketing. The Marketing AI Institute also hosts valuable events and provides training on marketing-related AI applications.
• Read the CabinetM MarTech Innovation report. Each quarter CabinetM publishes a roundup of new MarTech products announced in the quarter. (Note: This is not a lead collector for CabinetM, it is provided as a non-gated resource.) Alternatively, task your technology team with giving you a quarterly update on technology advances and new products they believe will add value to your marketing plan.
• Reach out to your key vendors, request information on their AI strategy and plans, and then monitor progress against that.
• Ensure that your organization has a single source of truth for all the technology being used to support marketing and sales in a form that you can review and assess. You may need to request that additional data fields be added to their tracking and reporting to get at the information that is most meaningful to you.
• Establish regular review meetings with your technology head and use these meetings to:
  • Collaborate on developing a technology strategy.
  • Discuss current technology utilization, performance and spend.
  • Identify gaps and opportunities.
• Don’t be afraid to dig in and ask questions. As a CMO, you are not expected to know the details of the technology architecture and integrations. Your job is to translate that architecture and strategy into a plan your C-suite colleagues and the company board will understand.
• And of course, keep reading MarTech.

The post Why CMOs must cross the technical divide appeared first on MarTech.

At CabinetM, we’ve built a marketing technology directory of 15,000+ products to drive our marketing technology management tools. Managing a directory of this size means keeping track of new products, new categories, acquisitions and their associated name changes, as well as unfortunate company and product implosions. 

For the last six years, we’ve published this information weekly in our Friday newsletter to help marketing teams stay abreast of shifts and changes. In late 2020, we decided to take a quarterly view to look at trends in product and category direction. Since then, we’ve been publishing our MarTech Innovation Report every quarter. What follows are the key findings from our 2022 year-end report.

New product launches

In 2022 there were 376 new product announcements reflecting the output of the investment made in marketing technology companies in the previous two years. This was a significant jump from 225 in 2021. 

Investment

In contrast, investment in martech companies dropped from $39.8B in 2021 to $28.4B in 2022. It’s important to note that these numbers do not include investment in AI content creation startups which we did not start to track until late Q4.

This would certainly have increased the overall numbers for 2021 and 2022 but may not have impacted the relationship between the two years.

We believe that economic uncertainty and martech “investment fatigue” were key factors in the downturn in investment. 

Mergers and acquisitions

Looking at M&A activity in 2022, there were 246 acquisitions for a total value of $54.9B in disclosed purchase amounts compared to 196 in 2021 for a higher total value of $101B in disclosed purchase amounts. 

Martech in 2023 and beyond

So where does this leave martech as we move into 2023? 

With so much uncertainty about the global economy, most companies are taking a more conservative approach to marketing, marketing spend and technology. Budgets are tightening and the pressure to meet revenue objectives will be intense.

Against this backdrop, there continues to be a steady drumbeat about the need to consolidate the number of tools in the industry and individual martech stacks. With more than 15,000 products on offer, it does not appear that the industry is consolidating as a whole. 

Reducing the number of products in individual martech stacks continues to be a topic of conversation. This is a simple and unrealistic answer to budget constraints.

If reducing the number of products negatively impacts revenue, what have you accomplished? Technology expenses may shrink but the cost of customer acquisition will rise and revenue goals will be missed. 

Rather than focus on reducing the number of tools to reduce expenses, marketing teams should rationalize their stacks to eliminate contract, product and functional redundancies and discard products that no one is using.

At the same time, there should be an ongoing evaluation of stacks to ensure that tools are fully utilized, contributing to marketing and corporate objectives and performing as expected.

It continues to astonish me how few companies know what’s actually in their stack or how well those products are performing. Sooner or later there will be a reckoning and hopefully, it will be because of budget overruns and not because of data privacy or security issues which is a real risk when flying blind.

If it were up to me, I’d anoint 2023 as the “year of stack rationalization.”

Dig deeper: 5 strategies B2B marketing and sales teams can bank on as markets tighten

You ain’t seen nothin’ yet

Despite economic concerns and what may be a difficult year for the industry, the outlook for martech looks great. There’s a tendency to say that the technology landscape is too big and over-invested, to which I say “ridiculous.”

Martech is not one homogenous industry it is made up of more than 500 different categories some of which have been over-invested (how many more CRMs do we need?), while others are brand new and generating a ton of excitement (i.e., AI-driven content). 

Innovation in our industry is driven by changing consumer behavior, new channels to market, an increasingly fragmented prospect base, regulations and technology innovation.

Scott Brinker captures this in his article, “2023 will be a chaotic year for martech, yet the start of a massive wave of growth” — a must-read for anyone in and around the industry. 

Brinker predicts that growth in the next seven years will dwarf anything that we’ve seen to date driven by what he refers to as new technology S-curves which he defines as:

• Artificial intelligence (AI)
• Augmented and virtual reality (AR/VR)
• Composability
• Web3 

I’d add data to this list (collection, compliance, compilation and enabling personalization).

I’m with him… there’s so much innovation ahead. In the meantime, use this year to rationalize, review and refine your stack.

You may download CabinetM’s full 2022 year-end MarTech Innovation report here. (Note: The report is not gated and downloading will not result in annoying emails and phone calls.) 

The post The state of martech in 2023 appeared first on MarTech.

I’m not a natural writer nor do I love writing. I find writing difficult and facing a blank page daunting. Nonetheless, it consumes a significant portion of my work week. Thus, the idea of using artificial intelligence (AI) to generate content is very appealing. 

Should we be skeptical of AI-generated content?

At the moment, there is a wave of negativity around using AI to generate content. This is not surprising given the newness of the technology and the sense that we are opening Pandora’s Box.

Concerns seem to fall into one of three categories:

• Content overload. A belief that we are making it too easy to drown our prospects and customers with poorly written, meaningless content.
• Authenticity. A fear that we’ll lose authenticity and honesty in our communications and weaken the connection and relationship we have with our customers. 
• Search engine impact. A worry about the impact of AI-generated content on search engine rankings. At present, Google considers AI-generated content to be spam and therefore against their webmaster guidelines. 

I understand these concerns but to me, they are addressable. Quality, quantity and authenticity will be moderated by the analytics we rely on to refine customer journey maps and show us what makes for engaging content. 

Our analytics tools are evolving quickly and many now leverage machine learning to provide us with actionable insights and recommendations. These tools will ultimately ensure that we do not fall into a habit of spamming prospects just because it is easy to do so. 

As for Google treating AI-generated content as spam, the search engine can’t easily discern which content is AI-generated unless it looks and feels like spam. In this case, they should hide it. 

Good content is good content regardless of how it is generated. And as AI capabilities evolve over time, I’m confident Google will find a way to deal with it appropriately.

Dig deeper: Can you use AI-generated content without hurting your page rankings?

4 common use cases for AI writing tools

AI content generation capabilities are still in their infancy. We are not yet in a place where we can rely on an algorithm to write a complete article or blog post without a human editing the output — and I’m not sure we will ever get there. 

The AI content generation tools on the market today position themselves for the most part as “writing assistants” and not “writers,” which is a big distinction. Their value propositions center around:

• Productivity and time savings.
• SEO improvement through identifying and using keywords.
• Better quality of writing due to grammar analysis.

Currently, AI-generated content adds value in several situations.

1: Overcoming the blank page fear factor

Recently, I was struggling to get started writing an article about the relationship between martech and the bigger function of marketing. 

As an experiment, I signed up for a trial of Jasper.ai and created a title and a one-sentence article overview, added some keywords and selected a tone of voice. 

Almost immediately Jasper returned three paragraphs that were reasonably well-written though a little redundant. They served as a great jumping-off point. 

In the end, I used one sentence in its entirety and deleted the rest. I did, however, use the thoughts in the  AI-generated text to help structure my article. All in all, a really good experience.

2: Refining text

A teammate who was spending a lot of her time writing emails leveraged her trial of Jasper.ai to see if she could improve the content of our emails and was really happy with the results. 

She’s a great promotional writer. But for those struggling with promotional writing, having a tool to improve and refine content is extremely valuable. In her case, it gave her some great material for A/B tests.

3: Inspiration and outlines

AI content tools are a good starting place when you know what you want to write about but aren’t sure what you should cover. 

They’ll come up with a recommended outline to help you think about your article or e-book structure.

4: Slogans, social posts, bios and more

Many tools go beyond blog posts and cover all types of business communications. They can be extremely helpful when you are writing ad copy or social posts and need multiple variants to test.

Some tools veer into personal communications and offer content for resignation letters, wedding vows, birthday cards, cover letters and more.

A little creepy, perhaps, but potentially useful for those who find these communications challenging.

Dig deeper: The AI content creation space is growing

17 popular AI writing tools today

Exploring tools for generating AI text content took me down a rabbit hole. There are far more options than I would ever have imagined.

Most tools come with a wide variety of templates and have plagiarism and grammar checkers. Some tools focus on a particular specialty (i.e., paraphrasing) or a specific medium (i.e., social or web content).

Additionally, the tools I looked at were very reasonably priced, making them easy to test to find the one that delivers the best content for you.

In no particular order, here’s a list of popular AI writing tools today.

You be the judge: Testing the AI content writing tools

As I looked at the tools above, I submitted my opening paragraph to those that offered paraphrasing as a service. Some are better than others, but overall, they are pretty impressive. You can see the results below.

(I resisted the temptation to rewrite my opening paragraph. If I had done so, I would have started with the paragraph from Contentbot.ai.)

My original paragraph

“I write a lot. I contribute to two publications, write marketing collateral for my company and generate numerous bits and pieces to support customer engagement every week. I’m not a natural writer nor do I love writing. I find writing difficult and facing a blank page daunting. Nonetheless, writing consumes a significant portion of my work week. The idea of using AI to generate content is very appealing.” 

Contentbot.ai

“Writing is the bane of my existence. I don’t consider myself a writer and yet I write every single day. This is especially challenging when I’m faced with a blank page or trying to rearrange words to make a sentence flow better. Whether I’m writing marketing emails, creating a blog, or contributing to my publications, I spend a considerable amount of time coming up with quality content for our audience. The idea of using AI to generate content is very engaging.”

Quillbot

“I write a lot. Every week, I produce multiple items to enhance customer engagement, write marketing content for my company and contribute to two magazines. I’m not a born writer and I don’t particularly enjoy it. I have trouble writing and the thought of a blank page is intimidating. However, writing takes up a sizable chunk of my work week. The thought of generating content with AI is quite alluring.”

Writesonic 

“I contribute to two publications, create marketing materials for my firm and produce a variety of bits and pieces to help customers stay connected every week. I’m not a natural writer nor do I adore writing. I find composing difficult and staring at an empt,y page frightening. Despite this, I spend a considerable amount of time writing. The notion of using AI to create content is very alluring.”

Copymatic 

“I write a lot. I contribute to two publications, write marketing collateral for my company and generate numerous bits and pieces every week. I’m not a natural writer and don’t enjoy writing that much. Still, it takes up a significant portion of my work week. The idea of using AI to generate content sounds ideal.”

I did go beyond paraphrasing and had one tool generate a blog post. 

My request: Write an article on the use of AI content in marketing in an informal tone. 

The result wasn’t something I’d publish, but it did give me some ideas. Here’s what I got back:

Introduction
The term AI-generated content refers to content created by the use of artificial intelligence systems. These systems can generate text, audio or video based on information that they’ve learned from large amounts of data. The purpose of this technology is to help marketers and other businesses create content that looks natural and authentic while saving time in the process.

AI content is here.
AI content is here to stay. It’s not a fad or trend. AI-generated content is here to stay and will continue to grow in popularity as the technology behind it becomes more sophisticated, accessible and affordable. For example, Google just launched a new product called “Cloud AutoML Vision” which uses machine learning to automatically label images—a task typically reserved for humans!

Because AI generates relevant ideas that you can customize into brand-specific content (or even just use as inspiration), it can save you time and money while simultaneously increasing your brand’s visibility online.

AI also offers marketers an opportunity to reach new audiences by providing them with solutions they didn’t even know they needed until they saw them advertised online through  AI-generated content campaigns that target their specific interests/hobbies/passions etc.

Conclusion
Content is key to the marketing strategy of any business. The type of content can vary from blog posts to videos, but it’s important for companies to create consistent quality materials that will engage their audience and help them make buying decisions.  AI-generated content is becoming a popular tool for marketers as it helps them automate some of their processes, but also allows them more time to focus on other things like creating original content or managing social media accounts.

Another test was to have Rytr create blog headlines and keywords using the same “the use of  AI-generated content in marketing” topic. Again, it produced some good ideas.

• What is AI-generated content and how can it benefit your brand marketing efforts?
  • Keywords: content creation software, ai copywriting tool, ai writer, content generator
• The complete guide to AI-generated content marketing
  • Keywords: ai writing app, how ai can help with marketing needs, what is an ai assistant for marketing
• AI-generated blogs & texts: A great way to increase SEO and website traffic
  • Keywords: blog generator, story generator, auto write emails, auto content generator
• How to use AI-generating tools together with traditional content-creation techniques in the modern world of marketing
  • Keyword: ai copywriting tool

I was most excited to try Quillbot’s summarizer tool in the hope that it would be a good resource for creating an abstract for the articles I write. Sadly, that didn’t work as I hoped. This is how it summarized this article: 

“There is a wave of negativity around using AI to generate content. Quality, quantity and authenticity will be moderated by the analytics we rely on. Google can’t easily discern which content is  AI-generated unless it looks and feels like spam in which case, they should hide it. Exploring tools for generating AI text content took me down a rabbit hole. Most tools come with a wide variety of templates and plagiarism and grammar checkers. Some tools are focused on a particular specialty such as paraphrasing or a specific medium such as social or web content.”

AI-powered writing tools can assist — not replace — people

I’m enthusiastic about the value these tools will bring to creating marketing content. I’m in the camp of looking for an assist rather than using a tool as an alternative to me writing. 

After doing a little more digging, I expect to subscribe to 2-3 of these tools. On the flip side, I told my husband about this article, and the look of horror on his face would be hard to replicate. 

He is a business school professor and immediately jumped to the potential for disaster if students used these tools to paraphrase each other’s work or as a way to write an essay. 

It will take some creative thought to think about the best way to address the use of AI content generation in the academic environment and elsewhere. 

We are heading into new territory with AI-generated content, and there’s still a lot to figure out. What I know for sure is that it will be a disruptive force in the world of content creation. As marketers, we need to figure out how to harness its power without losing the “why” and “for whom” we are writing.

And though this article deals with text generation, I thought I’d see if I could use an AI generator to create an image to go along with the text. I went to Nightcafe and typed in “Robot typing text”, selected “Modern Comic” as the style and asked for four images. I’m very pleased with the results and am happily heading into my next rabbit hole.

The post 17 AI-powered writing tools and how to make best use of them appeared first on MarTech.

For us, as a martech management platform, it’s any product that supports developing and managing the customer experience or contributes to acquiring, engaging and retaining customers. This eliminates artificial lines between marketing, sales and customer success or between adtech, salestech, etc. However, the reality is we add any product to our directory of 15,000+ products that a customer wants to include in their martech stack. As a result, we sometimes stray slightly beyond the boundaries of our own definition.

To manage a directory of this size means keeping track of many things: new products, new categories, acquisitions and name changes, and company and product implosions. We used to publish this quarterly and our newest MarTech Innovation Report just came out. It’s not gated, so you can download without triggering annoying emails and phone calls!

What’s clear from our data is that martech continues to be a healthy industry.

Dig deeper: 5 steps to martech stack success

New product announcements jumped to 124 in Q2 2022, up from 49 in Q1 and by far the most in the past two years. These cover a wide range of product categories, but the top five of these are remarkably consistent – advertising, analytics, segmentation, customer engagement and experience, and data management. 

Innovation is driven by investment. While some say there are too many martech solutions and the sector is over-invested, that’s not what the money shows. We are still seeing significant investment activity in established players and startups. We believe we are reaching a peak point with regard to the number of companies. In the U.S., we are seeing close to an equal number of companies/products entering and exiting the market each year. 

Innovation and investment

In looking at investment amounts, we saw a significant dip in Q2 2022. This dip aligns with the general downturn in investments reported by the New York Times on July 7^th. According to the New York Times “investments in U.S. tech start-ups plunged 23 percent over the last three months.

At the other end of the spectrum, acquisitions have stayed steady over the last seven quarters with an uptick this year. Across the last seven quarters the most common categories of companies that were acquired were: 

• Advertising
• Analytics
• Audience segmentation
• Campaign management
• Content marketing
• Conversational marketing
• Customer journey/lifecycle management
• Customer engagement
• Customer experience
• Customer service
• Data management
• Email
• Events
• Marketing automation
• Payments
• Personalization
• Product life cycle management
• Productivity and workflow
• Social media
• Video
• Web performance and security

In addition to tracking external martech trends, we also look at data from the nearly 1,000 stacks managed on our platform. This helps us see which products are most popular and which products surround key anchor platforms. The stacks range in size from 25 to 250 products, are a mix of B2B and B2B, and are in different stages of documentation. Once you move beyond foundational platforms (CRM, CDP, Marketing Automation etc.) stacks quickly start to look very different; the long tail of products found in stacks is very long. We’re routinely asked what products typically sit alongside the larger platforms. To that end we’ve started to catalog the top products that surround major platforms.  Our first Stackmate Report was released last month and covers marketing automation platforms. This is also an ungated report. 

The post A look at martech investment and innovation appeared first on MarTech.

 It’s virtually impossible to benchmark stacks from a size perspective due to a lack of consistency regarding:

• The categories to be included  – Only marketing tech or marketing tech + sales tech + adtech (some consider ad tech entirely separate from martech) + service tech + data sources? Note: we see data sources showing up more and more in tech stacks.
• The types of products included – Generally it’s purchased products, internally developed ones and those acquired and managed by agencies on the company’s behalf. But what about free products? Our data shows most companies don’t bother tracking them because it’s seen as too difficult or unimportant because it doesn’t impact the budget. This is a mistake. Some free products are critically important gems that are important to know about. 
• How comprehensive it is – Some companies choose to look only at their critical foundational platforms. We, on the other hand, catalog every single piece of technology we use.
• The scope – Some companies have one comprehensive source of truth (aka stack), while others manage technology at a department, business unit or geographical perspective and manage multiple stacks. We’ve even seen companies building stacks for specific marketing objectives e.g., lead acquisition, engagement etc.

Dig deeper: Here’s how startups and small companies should build their marketing stacks

In building your stack, don’t focus on trying to find a guide to tell you how big your stack should be. Instead work from the ground up:

1. Establish your foundational technology infrastructure

For most companies this includes:

• A way to create campaign materials.
• A system to be your source-of-truth for data.
• A way to manage prospect and customer relationships.
• A means to acquire and nurture leads and engage customers.
• One or more systems to support collaboration.
• Tools to analyze and assess results.
• Tools to manage assets, budgets and technology, and a platform to facilitate online sales if needed.

You may not need discrete tools for each function, depending on your environment your marketing automation platform may also function as your CRM and email platform.

2. Consider things beyond core functionality:

• Suitability for the size and skills of your team. If you choose a product that is too complex than your team can handle, it will never be fully utilized and you will not get enough of a return on your investment.
• How well everything works together. Can critical data get where it needs to go? Find out if your products can easily integrate before you buy them. Otherwise you will have to develop custom integration code (depending on the system it could be a six-figure cost).
• Scalability. You should be able to use your foundational elements for 3-5 years. That means they must be able to grow with the company. It’s a huge task to swap systems out, taking from six to 18 months to do. 
• Cost. It’s important to understand on a product-by-product basis and at the stack level how your purchases factor in and impact customer acquisition costs (CAC).

3. What do you need to achieve your objectives?

With more than 9,000 martech products on the market, how do you sort through them? Your marketing goals will focus your efforts in the right place. Also, it’s critically important to consider whether the technology you already have can handle your expected future needs. One of the key contributors to stack bloat is redundant functionality within the stack. This is caused by looking at each set of technology requirements on its own and not considering the stack as a whole.

Remember, the need to create new campaigns, leverage new channels, improve targeting, etc., means you are going to add more technology to your stack. That’s okay, as long as you keep the CAC impact in mind. 

Is smaller better?

There’s an idea going around that we should all make our stacks smaller via consolidation. The argument is that a smaller stack will be easier to manage and less costly – but will it? Replacing five products with one product doesn’t guarantee easier stack management and lower costs. A new product could add a new level of complexity and require a long implementation and onboarding period and extensive training. It could also cost significantly more than the products that are being replaced.  

Consolidation is a favorite theme of vendors with large multi-function systems that want you to use their product over everything else. There are times when this makes sense, particularly when integrations are involved, but there are plenty of times when it doesn’t. As yet there is no single platform that can deliver the functionality needed across the stack so don’t waste any time thinking about that.   

Consolidation can be needed when a stack gets out of control due to lack of centralized oversight and purchasing. Then bloat becomes obvious through skyrocketing expenses without the ability to demonstrate return on investment. We’ve worked through this process with a number of customers and in every situation it’s because of redundant contracts, products and functionality. If you have processes in place to prevent this, your only risk of bloat is keeping products that didn’t live up to expectations or no longer serve your marketing objectives. This is easily avoided by establishing performance benchmarks and conducting regular stack reviews. 

If we can’t define the optimum size of a tech stack then we certainly can’t look at a stack and say “that needs to be consolidated.”  Stop worrying about stack size, the perfect size for your stack is one that ensures you meet your marketing objectives in a cost-effective way.

The post My stack is bigger than your stack, so what? appeared first on MarTech.

For products where there is a tangible cost benefit in the form of new revenue, measurable productivity improvements, or cost savings, a straight-forward ROI calculation is workable.

The ROI formula

((Gain – Cost)/Cost) x 100 = ROI%

Some notes about leveraging this formula:

1. Time period: Three years is the most common period for calculating gain. 
2. Costs: Costs should include all expenses to implement and manage the product for the three-year period not just the monthly or annual subscription costs. This includes training expenses. 
3. In calculating the gain and costs it’s important to consider the trajectory of both if you expect to add more product users over the three-year time period. 
4. An initial ROI calculation is a best estimate, the only way to validate the ROI is to implement the product and revisit your assumptions regularly over time. Measuring actual ROI will provide data that will be valuable in projecting ROI for new products that are similar in structure or value. 
5. Document your detailed assumptions, it’s the only way you’ll be able to revisit the calculation. 
6. Set standards where possible. For example: If you are calculating productivity savings you want to make sure that everyone in the organization is using the same hourly rate for each job function.
7. If you are not sure how to approach this calculation, ask your vendor for help. They should understand the value they bring to your environment and anecdotal data from other customers.  
8. Some of these calculations will be complicated due to multiple quantifiable benefits. For example: When I look at my product, value can be quantified by reduced technology expenses, productivity gains, cost avoidance, and a host of additional minor elements. If you can get to a desired ROI without quantifying every single element then good enough. The more complicated and the more variables the harder to maintain. Focus on the elements with the biggest impact. 

For some products it’s virtually impossible to quantify the ROI which has got me thinking about how to qualitatively assess the products in my stack and the overall stack itself.

In a previous life, I was involved in an angel investment group and one of the most difficult tasks in funding early-stage startups was to assign a value (valuation) to a company. There are at least eight different formulas (probably more) for calculating valuation but they all are calculated using company financials. In an early-stage venture, company financials are a best guess so any calculation done against those is going to be flawed.  For that reason, most of the angel community relies on a combination of looking at valuations for similar companies and some form of qualitative assessment, the most common being The Berkus Method. The Berkus Method identifies five critical risk factors — idea, team, prototype, relationships/build-on-demand, and sales — and an investor assigns a dollar value to each based on the company’s progress in each area to reach a final valuation number. 

A ‘Berkus Method’ for martech

We need a Berkus Method equivalent for marketing technology, a method that provides the ability to quickly assess the value of the products we use and the stack overall. Instead of assigning a cash value to each component, the idea would be to assign a rating. I’ve been thinking about the key components and have come up with the following as a first draft:

1. Satisfies the use case for which it was acquired.
2. Extensible to support additional use cases.
3. Integrates with other products in the stack.
4. Ease of deployment and use.
5. Data contributor.
6. Data source.
7. Contributes to driving revenue and customer lifetime value.
8. Contributes to lowering customer acquisition costs.
9. Contributes to creating a positive customer experience.
10. Contributes to customer engagement.
11. Enables new marketing capabilities.
12. Enables new marketing channels.
13. Supports data compliance requirements.
14. Enhances security.
15. Critical to marketing.

For each component, the user would assess contribution on a scale (1 to 5 or 1 to 10) and then total the assessments and divide by the number of components rated.  Not every component would be relevant to every product so the number of components rated would be variable product to product. Are these the right components? Should there be more or less?

I’d love some help from our MarTech community in refining this idea, finalizing the component list and thinking through how to extend this to create an overall stack value. Please reach out directly with your thoughts.  Have any of you created something like this or an alternative within your organization that you would be willing to share? With more and more money being spent on marketing technology now is the time to jump on this before we are under or pressure to reduce technology costs.

Footnotes

Investing in new business tech: How to calculate ROI;

Top benefits of calculating ROI for technology investments;

Calculating ROI on Information Technology projects;

7 Tips for How to Calculate ROI Percentage for Technology Investments.

The post The formula for calculating martech ROI appeared first on MarTech.

Startups are very different from established companies from a marketing perspective. They have no established brand position, limited personnel and little to no budget for technology. They may be entering uncharted territory by defining a new market category or jumping into an already crowded space with well-established competitors. So, where to begin?

Marketing objectives

You can’t be successful in building your tech stack without first creating well-defined marketing objectives. You should have 3-5 high-level achievable objectives for the year (no more, or you’ll drive yourself insane). They should be aligned with the company’s business objectives and current position in the market (don’t set an objective for market leadership when you have no product or no revenue – it’s not achievable nor believable).

Here are some guidelines.

If you are entering an already established market category, your first objective should be related to positioning and differentiating the company and creating brand awareness. Creating a new market category should be about market education and socializing the new category. Do not create a new category if you don’t have to. I’ve done it twice under duress, and it requires a huge investment in market education and hard work to ensure that there is a line item for your product in your customer’s budget. In addition, if you define a new category and remain the only company in that category it is not a category. It is just a marketing description.

Your second objective should be related to the most important thing you need to do in the coming year, e.g., drive leads, revenue, launch a product, etc. You can customize your objectives to support your particular goals. As you write your objectives, you should identify the metrics that will define success for each objective so that you can quantify what you are trying to achieve.

Technology requirements

When you are clear on your objectives, you can then define how you will achieve those objectives in a marketing plan. Content marketing will be a large component of your marketing plan for most startups because it is cost-effective and impactful. With your marketing plan in hand, it becomes straightforward to build a technology plan. You need to look at each component of your marketing plan and define where you need technology to support each component and what you need the technology to do.

Experienced marketing operations professionals will be the first to tell you to start by defining what the technology needs to do before determining what type of technology you need. Don’t start with a technology shopping list, e.g., CRM, email platform, analytics, etc. Even though you may instinctively know that you need a CRM system to satisfy a need to manage contacts, to select the right one for your environment you need a clear definition of what it needs to be able to do for you. Continuing with CRM as an example – besides managing contacts, do you need it to send emails individually and to lists? Do you need it to create a pipeline structure in a specific way? What sort of reports do you need to generate? Does it need to give you the ability to create landing pages? With a comprehensive list of needs in hand, you can identify the types of technology required in your stack, and in many cases, you may find that one type of technology addresses multiple needs.

Cheatsheet

It’s important to do the work noted above, but as a starting point, I can confidently say you’ll most likely need the following components in your stack:

• Source of lead data.
• CRM to manage contacts.
• Email platform or marketing automation system (note: some CRMs will provide you with enough of this capability to get you started).
• A variety of content creation and management tools.
• An analytics platform (could be as simple as Google Analytics).
• A social media management platform.
• Productivity and collaboration tools.

The work defining functional needs will be vital in selecting the right vendor for each of these categories. As you think about functional requirements, don’t forget to think about which pieces of your stack will need to integrate with one another frequently, which will dictate your vendor options.

Choosing the technology that’s right for you

Once you’ve determined the type of technology you need in your stack, two critical factors in choosing the right vendors for your environment are cost and skills. Most startups are budget constrained, and marketing technology frequently follows programs and people when it comes to the budget. That’s the bad news; the good news is that numerous excellent products are free, cost very little or offer significant discounts to startups, so you should get what you need within your budget constraints. And, remember you are not selecting technology that will be in place forever. As a startup, get what you need for the immediate future.

By nature, startups move fast, and startup employees generally perform multiple functions. Your team members must become “jacks of all trades,” leaving little time to master complex tools. Finding tools that are easy to implement and use is critical. Not every tool will be intuitive, and your team may need some new skills to leverage them properly. Invest in training. There are free programs and webinars as well as courses that charge for participating. You’ll get a great return by empowering your team to keep learning.

What next?

If you follow the guidelines above, you’ll have no trouble building your initial stack, and you’ll establish good discipline around technology selection at the same time, which will serve you well in the future. However, recognizing that some of you are under a lot of pressure and want to know what to put in your stack, I’ll share two things:

1) My company’s martech stack, which is continually evolving as we test and try new things.

2) The most popular tools in use by businesses with less than 100 people, which we’ve extracted from the aggregated data on our stack management platform:

Ever wonder how frequently marketing software is replaced?
Here’s the answer.

Download the 2022 MarTech Replacement Survey!

The post Here’s how startups and small companies should build their marketing stacks appeared first on MarTech.

Have you ever been in a meeting and had someone turn to you and say, “What do you think about Product X?” which turns out to be some obscure solution they’ve tripped over or read about? I know I have. Those questions often come from someone wanting to appear informed or to grandstand, but they always make me feel like I’m not on top of things when I haven’t heard of the product.

It’s impossible to be a walking, talking expert about every technology — or even technology category — in the marketing landscape. For that to be possible, you would have to have been born on the planet Krypton, which no longer exists. Nonetheless, staying abreast of shifts and technology changes in the industry is part of the marketing and marketing operations function, and there are several significant challenges in doing that:

The martech industry is continually evolving

Emergent channels, as well as changes and fragmentation in customer behavior, serve as catalysts for new product categories and products. In the last ten years, we’ve seen the introduction of CDPs, podcasting platforms and virtual event tools, for example. At CabinetM, we do our best to keep track of new product announcements and consistently see 200+ new product announcements a year. In 2021, more than $35B in funding went to marketing technology companies.

Marketing and, by default, martech is additive

As new channels and marketing practices are introduced, they rarely replace something already in place. More often, they become another layer in the marketing program. Email didn’t replace direct mail. Social media didn’t replace email, and digital advertising hasn’t replaced print advertising, etc. Budget priorities may shift, but the program layers generally don’t. We take approximately the same number of products out of our database each year that we add due to companies retiring products or closing down.

Today, we have over 15,000 products in our martech database. Are we at stasis? Not yet. There are still tools to be uncovered. We receive on average 20-30 requests to add tools to our database a month. Ex-U.S. companies are not fully represented in our database or anyone else’s. It will take time to cover the world. The definition of martech keeps expanding. For example, most marketing departments consider workflow management tools part of their technology portfolio, though some argue that workflow management isn’t a martech category. My best estimate is that we’ll ultimately reach stasis at over 20,000 products.

Dig deeper: What’s in your marketing stack? We’re partnering with CabinetM to find out

Keeping up with the acquisitions

Martech is a very acquisitive industry. In 2021 we saw 196 acquisitions worth $101 billion. If you have been keeping up with acquisitions in the past year and a half, this little quiz will be a breeze. Who acquired these companies in the past 18 months?**

• Slack was acquired by ______
• Segment was acquired by ______
• Workfront was acquired by ______
• Mailchimp was acquired by ______
• Momentive was acquired by ______

Post-acquisition brings changes in product functionality, usually starting with integration capabilities. Salesforce’s acquisition of Slack allows the company to scale up a powerful collaboration tool with existing integration tools, workflow automation, and collaboration to improve productivity among internal teams and better communication between vendors and customers.

Acquiring companies generally rebrand the products they acquire and often adopt a phased approach to rebranding. Phase I, the existing brand remains in place under the umbrella of the new parent, Phase II, the new parent’s name merges with the existing brand (e.g., Twilio Segment), and then finally, Phase III is a complete name change. I’m a fan of the phased approach though I have to admit I often get lost at Phase III and struggle to remember new names.

General shifts and changes in product portfolios

Rebranding is not limited to acquisition environments. Companies rebrand and reposition products all the time due to changes in focus, sales approach, product functionality, and in the case of the large platform providers, the need to clearly represent the volume and relationship of the products in their portfolio.

Many companies have moved away from a singular list of products to categorizing products by function. SaaS companies often catalog market tools by industry – healthcare, finance, hospitality, etc. and are now increasingly also cataloging tools based on customer departments or needs – like marketing, sales, commerce and customer service. Salesforce, Adobe and Twilio are just three of the many companies that have changed their approach to presenting products. 

I was surprised to see HubSpot change its position from marketing automation to CRM, but they’ve done a beautiful job of conveying how their CRM capability serves as the glue for the rest of offerings, which makes sense from a marketing position but also from the perspective of how their product offerings are used. I asked Ellie Flanagan from HubSpot what drove the positioning change, and she said, “Many people think of HubSpot purely as a marketing automation provider, so we needed to refresh our positioning to reflect the full breadth of the platform today. A CRM platform promises a single source of truth that empowers front office teams to deepen their relationships with customers and provide a best-in-class experience. Our new positioning enables us to better highlight the aspects of our platform and approach that set us apart from the competition.”

Given all these challenges, how do you unleash your superpowers to stay on top of the shifts and changes in the martech industry?

1. Your worth is not in knowing a list of 15,000+ tools; it’s in knowing the products and categories that could be game-changers in your environment. Pick the critical categories for your use case, carve out time to keep on top of those, or share the load with your teammates and meet for a monthly communal debrief.
   
2. In line with point 1, you should have a clear view and framework for where you are headed over the next one to two years. Let that guide you to new categories to watch. Make sure that you are saving market reports and product information related to categories and products of interest. Having a long-term view will have the added benefit of ensuring that you look at the big picture when making near-term product decisions.
   
3. In the same way that you are continually looking at the performance and implementation of the products in your stack, you should make sure you are following the news from the vendors in your stack to ensure that you keep abreast of a) name changes that may cause confusion later; b) sales and support changes in the event of acquisition; and c) new functionality that may be of value in your environment. If an acquisition brings a better integration between two products in your stack, it could significantly improve performance. If resources are stretched thin, then focus on those mission-critical platforms in your stack.
   
4. Some marketing operations leaders carve out a “Vendor Day” once a month or quarter to listen to new vendor pitches. This is a good way to learn about new products, and you can use these sessions to question vendors about broader market trends.

Finally, some advice for you if you have to deal with the annoying know-it-all in the meeting who tries to put you on the spot about some new or obscure technology. Throw back your cape, put your hands on your hips and assert your martech dominance by saying, “No, I’m not aware of Product X, we’re currently focused on the following areas [insert areas here], and are looking at [insert new categories] for the future. Do you think we should be looking at Product X, and what benefits do you think it will bring to our marketing plan?”

Most of the time, they’ll back off, but sometimes they may have something valuable to contribute, in which case you should recruit them to be your trusty sidekick!

** Quiz Answers:

Salesforce acquired Slack

Twilio acquired Segment

Adobe acquired Workfront

Intuit acquired Mailchimp

Zendesk acquired Momentive

The post Navigating the evolving martech landscape appeared first on MarTech.

With technology now consuming 29% of the marketing budget, companies are putting the brakes on independent purchasing and tasking marketing with establishing a formal technology evaluation and purchasing process that ensures that the ROI for technology purchases is aligned with business performance and objectives. 

I’m surprised at how recent this process development is for many companies and thought it would be interesting to pull together a group of marketing operations leaders who have been tasked with developing a purchasing process to discuss how they approached this activity, and to learn what’s worked, what hasn’t, and what the challenges were along the way. We’ll be diving into this during our Martech panel but here’s a sneak peek at some of the issues they’ve had to grapple with.

Stakeholders

Who are the stakeholders, and what are their responsibilities? How many are too many? How do you avoid being bogged down by naysayers? How do you stop bureaucracy creeping into the system?

One or more processes

Is it possible to create a single process that supports the evaluation and purchasing of an expensive, complex product such as a marketing automation platform and is at the same time flexible enough to handle a $9.99 subscription for a product with limited features?

Distributed versus centralized purchasing

What’s the best organizational approach to technology purchasing – distributed or centralized? What are the advantages and disadvantages of each? I’d vote for distributed purchasing with centralized oversight – it will be interesting to hear what my panelists think.

Best of breed versus single solution versus platform ecosystem

I happen to believe that the best approach to purchasing technology is a combination of best of breed, single solution and platform ecosystem but many organizations are hamstrung by opposing ideological beliefs. How do you work through a fundamental issue such as this?  

Closing the gate after everyone has bolted

It would be nice to start with a clean slate and build a new process on top of that; the reality is that for most of us we are jumping into an environment that has been operating without a process for years. Where do you start? Is it necessary to go back and rationalize all the purchase decisions that have been made to move forward, or do you focus on the future? 

Priority management

It used to be that the number of products that could be purchased was gated by how many the IT department could install in any given period. Today, most products don’t require IT support, so how do you handle competing requests for new products? Is there a limit to the number of new products that can be integrated into the stack in any given year? Is it necessary to retire one product to bring in another? 

Keeping everyone heading in the right direction

Several marketing operations executives have told me that it is an ongoing challenge to keep everyone moving in the right direction and adhering to a process. I’ve heard it described as herding cats or playing an eternal game of Whack-a-Mole. How do you keep everyone engaged in the process? How do you avoid renegade purchasing?

I’m sure there will be a lively discussion among our panelists with input from the audience. These are the nuts-and-bolts issues that are so important to developing and executing a coherent strategy.

I am looking forward to seeing everyone on the 18th!

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