Buying new things is fun — who doesn’t love a good dose of retail therapy?
Marketers certainly enjoy it. When it comes to marketing technology, few can resist the lure of a shiny new toy. Over the last decade, tech companies have served up an ever-expanding array of tools to help marketers amplify their campaigns, simplify their processes, and eliminate time-sucking, low ROI activities.
But in recent years, revenues have dropped, and for some, budgets have all but disappeared. It’s not a time for mindless spending. It’s a time to be thoughtful and strategic when you allocate your limited resources.
Why You Should Invest in Marketing Tech Tools
To compete in today’s economy, you need to stay ahead of the curve.
This means you know what your competitors are doing, where they’re putting their money, and how they’re getting the most bang for their buck. The world has been changing at breakneck speed, so let’s catch up to where most marketers are at.
First, let’s take a look at how marketers handled their budgets a few years ago. Pre-pandemic, CMOs were steadily pulling out of traditional media and investing in digital channels, strategies, and technology. MarTech — the collection of tools, software, and platforms that automate, integrate, or enhance digital marketing processes — matched that growth.
As online engagement eclipsed the in-person experience, building a strong digital presence became paramount. MarTech helped marketers build that presence by making it easier to create and disperse content, engage with customers, build relationships, and answer pain points and problems.
For example, Sprout Social became a one-stop location for social media marketers to curate, schedule, publish, and report on content. Hubspot helped with everything from email marketing to social media ads to contact management. Then there’s Zapier, one of our favorite tools. When you can have a robot monitor social media for mentions and automatically alert your social team, you’ve got a winner. In all cases, these tools save you time that’s usually spent in processes with low to no ROI, so you can focus on growth.
Now let’s look at where we are today. In some ways, things are the same — digital marketing continues to win out over traditional marketing, and MarTech helps teams make the most of it. Not only that, tech has become even more sophisticated. But now, the stakes are much higher because marketing budgets are at an all-time low. This means that you need to be really smart about how you spend and what you spend. Strategy is key.
Gartner’s annual CMO Spend Survey from 2021 shows just how careful marketers need to be these days. While Chief Marketing Officers (CMOs) surveyed in 2020 were optimistic about future spending, 2021 brought in a reality check. The economy was still on its knees from the COVID-19 pandemic. As companies reeled and revenue dropped, so did marketing budgets.
The proportion of revenue allocated to marketing fell from an average of 11% to 6.4%, the lowest percentage in the history of Gartner’s survey.
It makes sense that marketers would maximize their budgets by focusing on what they think will bring in the highest ROI. For the CMOs Gartner surveyed, that investment was clearly technology. The report found that in 2021…
- CMOs were planning to spend 26.6% of their budget on technology, making it their biggest area of investment.
- Of that 26.6%, email marketing, digital marketing analytics, and web content management platforms were the highest priority.
When it comes to which channels marketers put their money, digital channels ranked highest at 72.2% of their total spend. Among these channels, owned digital was the top dog, followed by paid digital and earned digital. This means that your competitors are putting most of their money into things like their website, digital ads, and SEO strategy, and guess what? You should too.
How Much Money Should You Put Into Your Tech Budget?
When it comes to exactly how much of your budget you should spend on technology, there’s no one-size-fits-all solution.
Consider what you’re offering and who your customers are. If you’re in the tech industry, you really should be reinvesting the majority of your budget back into your tech. If you’re in any other industry, you can get away with less, but it should still be a big part of your strategy. No matter what industry you’re in, you should invest at least 15-20% of your budget into tech.
Everybody’s business is different, but you need a web presence to be successful in this economy. The place people look to find out more about your business is Google. If you don’t have an excellent web presence, people will overlook your business for someone who is more visible online.
When you take that 15-20% chunk of your budget and invest it into things like search engine optimization (SEO), you will see more success (more visibility = more sales). It may take time to build trust with Google, but once Google trusts you, your brand gains visibility. To make the most of your SEO tools budget, you should pair it with a stellar content marketing strategy. To do it right, you may need to outsource it so you can put your time into growing your business.
However, not everyone needs SEO to be their primary focus. Before you think about investing in tech, clearly identify your current and future problems. What is your company facing, and what do you expect you’ll face in the future?
Maybe you’re a well-established brand with a longstanding client base, but customer retention is waning. You need to find out why your customers are unhappy and what they need. To do this, you’ll want to do more listening than speaking — meaning, you should focus on client feedback before crafting new messaging. In that case, you might want to prioritize something like Intercom, a platform that facilitates customer communication.
On the other hand, maybe you’re failing to bring in high-quality leads. If you’re struggling with conversions, you should leverage data science and predictive analytics to ensure you’re putting money where it matters. Platforms like Madkudu can help you be more efficient, target the right people, score leads effectively, and arm your sales team with the information they need to convert them.
Maybe you’re a B2B business with a longstanding reputation, but you’ve noticed that conversions are dropping off. Clearbit might be just what you need. It draws data from over 100 sources, including Salesforce, to create detailed customer profiles that make outreach more effective. It refreshes data every 30 days, so you stay up to date about your prospects’ company size, position, and more.
When setting a budget, start with whatever problem you’re facing that’s decreasing your revenue. Focus on that first so that you’re making the most of your money.
How to Save Money on Your Tech Stack
Just because there are a bunch of shiny new tools out there doesn’t mean you need to go out and get them all.
When budgeting for tech, you should always look at what you’re working with first. A Gartner study in 2020 found that marketing teams were using only 58% of their MarTech stack’s full capabilities. Not only is that a waste of money, but it can actually slow your processes down, lowering your ROI even further!
When it comes to building a tech stack that makes your life easier, less is more. You can think about building one much as you would think about shopping for your home. You don’t go out and buy something new until you’re sure that what you have won’t work just as well. Otherwise, you’ll spend unnecessarily, and your house will accumulate clutter.
A cluttered home makes you work harder to find what you need, slowing you down and zapping your energy. Plus, there’s nothing worse than buying a new flashlight only to find that you had two already in the bottom of a junk drawer.
The same goes for your technology. If you’re thoughtlessly adding one thing after another, you’ll risk having a bloated, slow, inefficient stack. You need to slow down and get to know what you have before you consider getting something new.
When looking into tech tools, make sure anything you get can easily integrate with other platforms. Otherwise, you not only have a headache on your hands, but you’ll waste time and lower your ROI. For example, if you’re using several different email platforms which aren’t integrating properly and your emails are getting stuck during execution, you do not have an effective tech stack.
Always consider how any new platform will work with your existing tech.
Learn How Carter & Custer Can Help You Strategize
We know how much pressure there can be when you’re working with a limited budget. When you’re operating with low margins, everything you do needs to have an impact.
As a mission-driven agency, we love helping businesses have an impact and strategizing with them to use their budget effectively. It’s our pleasure to help changemakers, thought leaders, entrepreneurs, and creatives get their messages out, whether it’s through marketing strategy, email journeys, content creation, or website optimization.
Get in touch with us to see what we can do for you!