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May 14, 2015

8

Digital Marketing Architecture: CMO Martech Playbook

by Ravi Kalakota

“i don’t think retail is dead. Mediocre retail experiences are dead.”   Neil Blumenthal, CEO @ Warby Parker

“In e-commerce, lines are blurring fast across Ads/Content/Products/Transactions.” Mary Meeker, Internet Report, 2017

Seismic shifts are putting customers in control.  New innovations like mobile Augmented Reality (AR), Conversational-AI are changing the landscape of what’s possible in terms of consumer experience.  This is truly an exciting time to be in marketing technology (MarTech) and data-driven marketing. Lot of innovation, experimentation and chaos.

Marketing technology (MarTech) is composed of the following: data, analytics, sales and marketing automation, email, predictive tools, commerce technology, shopper marketing and payments.

MarTechHighLevelWhy this tremendous growth in Martech? The customer lifecycle around acquisition, engagement, commerce and retention is going through a major upheaval. Changing buyer behaviors forced companies to change how they market and sell. Instead of the classic CRM and “inside-out” approaches, a new wave of “outside-in” fresh rethinking around engagement, experience and micro-targeting is taking place.

Chief marketing officers are already outspending CIOs on tech as they race to bring marketing to the B2C and B2B digital world. According to Gartner’s CMO Spend Survey, marketing budgets remain steady at >10% of company revenue. However, the growth and investments are all in digital marketing space as firms focus on millennials,  online customer experience, micro-targeting and multi-channel engagement.

Marketing technology budgets appear to be growing  faster for revenue-related capabilities than more internal efficiency improvements.  Also cutting-edge marketing technology is becoming legacy quickly.  The effectiveness of the generation #1 digital marketing playbook is eroding with mobile-centric usage patterns, ad blockers, and  spam filters. Consumers are now empowered with new and better control over interruptions from marketers. Buying lists, blasting emails, and cold-calling were no longer effective.

A new digital engagement playbook enabled by next generation martech is needed.

Good -> Great… Marketing Technology Architecture

As the race to become digital and engage prospects/customers gains momentum in every industry, CMOs are faced with an interesting challenge they never had to deal with before:

  • What is an efficient and effective digital architecture?
  • What does a “good” architecture look like?
  • What does world-class mean with respect to sales, marketing, service and commerce technology?
  • What is an effective mobile engagement architecture? What is the best way to systematically approach Mobile Onboarding, Activation and Retention (MOAR)?
  • How to make investments that align with a strategic customer engagement plan and not a tactical “plug-the-hole” gap fillers?

Marketing technologies and customer touchpoints are evolving on a near-daily basis, creating new customer engagement models. It doesn’t take genius to realize that an effective front-office investment in a digital marketing architecture is key for long-term growth at every firm.

The strategic goal for every firm is pretty much the same:

  1. Better Targeting: Reaching prospects and converting them into leads
  2. More Integration across the customer lifecycle, channels and multi-stage marketing
  3. Effective Personalization: Dynamic, personalized content across touch points
  4. Insightful Analytics to mine data and create novel experiences

Below is an example of a Digital Marketing architecture from Informatica.  This firm uses Marketo for marketing automation, Salesforce.com for CRM and support, Adobe suite for content management (DRM), inbound marketing ((e.g., SEO, blogging, video, ebooks, infographics, and social media)  and targeting, Demandbase for portals and a variety of Web analytics, sales analytics and reporting tools.

DigitalMarketingStack

Breaking down technology silos and building a single unifying view that enables firms to put end-customers at the center and engage with them seamlessly across all touch points is not easy.

Digital Marketing Reference Architecture

Customers are very savvy. They don’t want to be blatantly marketed to, and they are quite adept at screening out mass emails or generic messages. However, customers are willing to engage with relevant content, and they’re willing to build relationships with companies that they (or their social network) like.

The modern marketer is at a crossroads to meet the challenges of a customer centric world.

In order to engage in a relevant customer dialogue, the marketing strategy that most firms are adopting (often called “multi-step drip campaigns”) attempt to nurture relationships with customers patiently, over time, and move them through their purchase journey.  This requires the complex integration of numerous features/components in the advertising, inbound and outbound marketing, and sales reference architecture (shown below) to create a seamless experience. This is what a Chief Marketing Technology officer typically worries about.

Three key reasons why you need an effective digital ad-tech, marketing and sales architecture: (1) Digital customer lifecycle and journey management; (2) Enables managed innovation within the enterprise; (3) Critical for program, portfolio and project management.

CMO view of Digital Architecture

Source: LiquidHub, Lumapartners and other industry sources

2015 Marketing Technology Landscape

B2C and B2B customers have transformed how they consume information, research products and services, make purchasing decisions and share their views and experiences.

Today, savvy customers are blocking out the tactics from the traditional marketing and sales playbook, such “interrupts” as banner ads, cold calls, unsolicited emails and generic messages.  Customers are taking more control of the purchasing process, including by using social media, key opinion leaders, and search engines to research products and services.

Despite this landscape transformation, most businesses are using an outdated marketing and sales playbook that is essentially the same today as it was a decade ago. To compete effectively,  businesses need to deliver new experiences by adopting new strategies and technologies to attract, engage and delight customers.

Scott Brinker has painted the 2015 marketing technology landscape in what has become his famous annual marketing ecosystem supergraphic. The landscape shows the speed at which the marketing technology industry (martech) continues to expand, now with 1876 companies in 43 categories.  The big vendors are acquiring firms rapidly to beef up their capabilities:

  • cloud-based marketing automation providers such as Marketo, Act-On, Eloqua (a division of Oracle), Pardot (acquired by ExactTarget in October 2012), ExactTarget (acquired by salesforce.com in July 2013) and HubSpot;
  • traditional database marketing software vendors such as Aprimo (a division of Teradata), SAS Institute and Unica (a division of IBM);
  • email marketing software vendors, such as Responsys (proposed to be acquired by Oracle) and Silverpop (aquired by IBM)
  • large-scale enterprise suites such as Salesfroce.com,  Oracle,  SAP, Infor, Microsoft.

MarketingTechnology

Chief Marketing Technology Office

Companies are leveraging technology to help accelerate the pace of change.  With all the multi-billion $$ investments taking place in MarTech, we are seeing the establishment of a marketing technology office, lead by a Chief Marketing Technologist, to help bridge the gap between marketing and IT.

The figure below illustrates the reporting structure for this emerging role.

CMTO

Summary

Peter Drucker once said, “Predicting the future is pointless, but it is possible to identify trends that have significant effects.”

Marketers (and CMOs) are increasingly confused by all the tech in the space as every vendor has a different spin, architecture and reference model.

As pressure continues to build for today’s marketer, they also are dealing with the need to become more and more customer-centric. Forrester calls it customer-obsession and ‘age of the customer’. Every business talks about focusing on the customer. But few actually deliver. Why? Because marketing technology is becoming very fragmented.  And it’s confusing to the customer because marketing and IT can’t connect process and data. True customer-centricity is still aspirational for most corporations.

My suggestion… Keep it simple, and start with the basics.

Additional References and Notes

  1. The CMO Council has very detailed Internet Marketing,  Mobile Marketing,  Direct Marketing, Marketing Operations and Marketing Spend Data
  2. Digital Marketing lingo is evolving….  Lead Scoring, Landing Pages, Digital Advertising, Programmatic Advertising, Microsites, Mobile Analytics, Sales Analytics, A/B or Multivariate Testing, Content Marketing, Mobile Advertising, E-commerce, Email Marketing, Social Media, Retargeting,  Affiliates, Search, Predictive Analytics, Optimization, Customer Feedback
  3. An Architecture is the fundamental organization of something, embodied in: (1)  its components, (2) their relationships to each other and the environment, (3) and the principles governing its design and evolution. [The Open Group]
  4. Enterprise Architecture is: (1) The organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the firm’s operating model;  (2) A conceptual blueprint that defines the structure and operation of an organization.  The intent of an enterprise architecture is to determine how an organization can most effectively achieve its current and future objectives.  [The Open Group]
  5. Terrance Kawaja (tkawaja@lumapartners.com) did a really nice job of categorizing companies across the  Display Ad Tech Landscape into discrete categories. One way to organize the Ad Tech landscape.
    • Adtech: display, search, video,mobile, social, content marketing/native, connected TV
  6. Digital Architecture 101
  7. Digital Integration – Why do you need a new breed of innovation vendor/partner
  8. Digital 101 – The Basics
  9. Multi-Channel Engagement Platforms
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