Digital Marketing and Marketing Automation Hit Critical Mass in 2009

Well, our 2009 IDC Tech Marketing Barometer results are in; and if you missed the Telebriefing two weeks ago, here are some of the highlights:

Marketing Investment:

• 0.5% Growth for Global IT Spending in 2009, while Average Tech Marketing Investment Drops 10%.
• Larger companies (>$1B in revenue) will take the greatest hit in marketing budget as they wrestle with significant revenue drops in key parts of their portfolios and continue to improve efficiency.
• Growth areas still exist within: enterprise social media, security management, mobile data, SaaS, Internet advertising, business analytics and IT outsourcing & BPO to name a few. (source: John Gantz's presentation at IDC's recent Directions event)

Marketing Mix:

• The pendulum of investment swings to demand generation, with sales enablement closely coupled to this priority. (awareness building takes a "back seat", yet remains a key part of healthier companies' portfolios)
• We've been all talk as an industry with regards to full-scale shifts of our investment to digital marketing over the past couple of years. The economic downturn will catalyze this shift in 2009 with almost 70% of marketers indicating an increase in investment in digital marketing while 60% and 72% of marketers will decrease advertising and events spend respectively. (refer to the past couple of posts in this blog for additional details about digital marketing shifts)
• Sales enablement will become a high priority for getting internal and external sales teams (and partners) the most relevant content at the right time and in the right place to assist in moving specific opportunities forward. Endless pages of collateral and white papers will be replaced by more relevant content that is better leveraged across the organization. (check out the previous blog post, "Content Squared")

Organizational Structures:

• Here we go again as marketers shift their organizational structures. Some organizations will entirely abandon their relatively cohesive marketing structure to shift to an entirely decentralized organization in an effort to simply survive; while the better positioned organizations will "weather the storm" with a more centralized marketing function and/or leveraging marketing shared services to improve efficiency and effectiveness in execution.
• Marketing operations and sales operations teams will continue to work together, increasing focus on the lead management process and associated nurturing and lead qualification strategies.

Marketing Automation:

• Marketing automation will experience a turning-point in 2009 as adoption significantly increases in the technology sector. Drivers include the significant improvements in the transactional CRM system vendors as well as the increased availability and cost effectiveness of SaaS offerings from planning to event-triggered marketing to performance measurement.
• A few questions to ask yourself: Do I have a marketing operations team in place to deploy and govern marketing automation?; Are we ensuring that process drives the technology versus the other way around? How do we ensure consistent adoption and use of these applications across functions, business units and regions on a regular basis?; Have we partnered with finance, sales and other teams as part of this strategy?; and Do we have a marketing automation road map?

These are just a few highlights of the recent study as well as food for thought as you progress through your 2009 plan. As technology marketers, I continue to believe that we are better prepared than ever to respond to the challenges posed in this difficult environment. This will not only facilitate our survival in 2009, but will enable us to rebound quicker than from prior downturns.

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Does Your Go-To-Market Strategy Align with Your Customer Needs? – Insight from IDG's Recent Marketing Summit and CIO Panel

IDG and IDC recently held its 4th annual Marketing Summit in San Francisco, with over 50 marketing executives in attendance. This annual, senior level event offers the opportunity to not only network with some of the technology industry's best and brightest marketing executives, but also offers the chance to hear from a panel of CIOs about "the good, the bad and the ugly" of our marketing and sales effectiveness. This year proved to be as valuable as prior years in helping to confirm some of our existing knowledge as well as offering contradictions to our preconceived notions of what works and what doesn't work.

The CIO panel, moderated by Rich Vancil of IDC's Executive Advisory Group, included executives from Chevron, Levi Strauss and Byer California (a mid-market company that manufacturers womens' clothing). Here are a couple of "gold nuggets" that I took away from this event including the actual quotes from the panelists: [my comments in brackets]

• "In a recent RFP process, I had discussions with five companies' sales teams. Only one out of the five companies was able to understand our needs and reiterate our challenges and communicate a solution without making it a one-way sales pitch." [How can we as marketers improve our sales enablement strategy to better equip our sales teams for these engagements?]
• "I prefer to print out white papers and read them at home, while my staff prefer web casts and other online material." [That's right, the CIO uses printed material to absorb information while more junior staff have adopted newer consumption methods. Always segment your customers. A role-based marketing strategy may highlight significant differences in how individuals consume information; including the continued need for an integrated, multi-media go-to-market approach.]
• "As a mid-market company, spend more time telling me about how you've deployed your solutions at companies similar to mine. Yes, you may have a Fortune 50 company as a client, but those companies will buy one of everything and put them on a shelf! I'll be investing my entire budget into one solution." [Segmentation and understanding of your customer, an often neglected area, continues to be a key success factor for marketing and sales engagements with customers.]
• "As a CIO, I may not use webcasts since every minute that I'm in the office someone is coming into my office; however, I may pass on the opportunity to my staff who I greatly depend upon to influence my decisions." [Once again speaking to the importance of a role-based marketing strategy. As B-to-B marketers, we need to not only understand the importance of selling to different members of an extended buying team, but embed this knowledge into our go-to-market and sales enablement strategies.]

As if we ever need reminding, the importance of maintaining our connection to our customers should never be underestimated. In fact, I find that the best marketers serve as a "beacon of light" for customer and market information for the entire organization. Don't let your marketing cuts inhibit your drive to serve this role in your company. Now more than ever your customers' needs are changing, if not due to rapid adoption of the Internet then most certainly due to the economic downturn.

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The Changing Marketing Mix

The press is filled with stories about the demise of traditional advertising and the in-person, public trade show. Sounds quite similar in fact to the predicted disappearance of the "brick-and-mortar" storefront, and the emergence of a new on-line world where we can do all of our shopping in our slippers from the comfort of our home. Well, IDC CMO Advisory's recent 2009 Barometer study does continue to indicate that our traditional marketing mix is in the process of permanently changing. In fact, almost 70% of technology marketers indicate that they'll be increasing their program investment in digital marketing in 2009, while 72% of companies will be decreasing their in-person events spend and 60% decreasing their advertising spend (print, broadcast and corporate sponsorships). What are the top digital marketing initiatives for technology companies in 2009?

• Corporate web site: No longer simply a marketing billboard, the corporate web site has become the window to the customer. The most effective corporate sites offer visitors the opportunity to not only learn about your products and solutions, but to also learn about the latest technologies and business challenges as well as offering the opportunity to interact with their peers and your technology experts. (e.g., through a community portal) The best sites also track the details of visitors to enable more of a 1-to-1 experience as well as tracking detailed customer data to improve marketing's lead management and nurturing process.
• Email: An often over-used vehicle for sending marketing collateral to the masses in a one size fits all mentality, this channel is being used more effectively for engaging with customers through an event-triggered marketing process. For example, providing respondents with additional, customized, relevant information based upon their responses to earlier communications.
• Search engine marketing: Although display ads will continue to be part of a strong portfolio, search ads and search engine optimization(SEO) will increase in importance. Search ads offer the opportunity to more surgically target your prospects as they reach out for information, while SEO continues to yield a strong return in increasing your companies' prominence in organic search.

However, before you hand the "key to the city" over to your digital marketing team, there are some important things to consider:

1. First and foremost, the rest of the marketing mix will continue to be an important part of a strong portfolio of marketing's strategy; and the balance of this mix will only get harder. For example, the CIO may prefer to continue reading their magazines and printing out pdf whitepapers; their direct report(s) will attend webcasts and read interactive white papers; and third level staffers will attend virtual events and online communities as part of their everyday job. Your mix will need to address the information consumption patterns of each of these roles – hence the need for role-based marketing.
2. As you continue to rush into digital marketing, ensure that your team does not leave their Marketing 101 learnings behind. For example, continue to leverage market intelligence as part of a market segmentation strategy; to identify your target customers, to understand what information is most relevant to your customers along different stages of the buying cycle, and to understand how and where your customers' consume their information.
3. Look for opportunities to differentiate yourself in the marketplace. While everyone is shifting to email and webcasts, a portion of your investment may be best spent on direct mail or in-person proprietary events.
4. Yes, continue experimenting with digital marketing, however, now is the time to begin including digital marketing as part of the fabric of your go-to-market strategy. Best practitioners are establishing campaign management teams to maintain an integrated marketing strategy focused on the customer, as well as developing centers of excellence in the digital marketing space as part of a shared services strategy.

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Is Database Marketing on Your Marketing Operations Radar?

How many times have we heard in the B-to-B marketing press the past several months about the importance of increasing content relevance to our prospects and customers, better engaging them through digital marketing vehicles and improving our ability to generate and qualify marketing leads? Yes, all extremely important priorities for us as marketers, however, if you're a $100M+ company none of this can be accomplished in an efficient and effective manner without the back-office infrastructure to support it. And we all know how difficult an infrastructure conversation is in this economic downturn. For the purposes of this conversation, let's focus on the area of database marketing.

Even the best marketing organizations struggle with consistency in database marketing processes; consolidation of prospect and customer data across the multitude of databases in use across the world; cleansing of data to prevent a "bad data in = bad data out" scenario; and overcoming the complexity of data analysis and list pulls, especially with the increased data flow from digital marketing activities. In a recent best practices study, we spoke with (12) multi-billion $, complex organizations representing in total over $250B in revenue. When asked to indicate their marketing organization's satisfaction with the components of database marketing, some of the most fundamental elements of this area were identified as being the weakest. . . . including data cleansing, digital data integration and contact management.

So enough about the problems out there: that's the easy part to identify. What are a couple concrete things that you can do to help improve marketing's "back-office", especially in these difficult economic times when "throwing money" at the problem is not even a possibility?. . .

1. Establish a global database marketing council or team to set standards and govern processes and technology. (yes, virtual if need be and it will take more time out of your day . . . but this will pay off in the long-term)
2. Leverage third party partnerships for external expertise and best practices (e.g., data cleansing). Establish an approved vendor supply list to achieve economies of scale and better govern data standards.
3. Develop a process to enable the average marketer to obtain a highly targeted list for their activities or campaigns. A 100% self-service model will lead to supplier proliferation, poor leverage of scare marketing resources and an inability to leverage the power of your data. Ideas include: establish a relationship marketing team, deploy a shared services model to get dbse. marketing experts closer to the field (more on shared services to come in future blogs), create an expert analytics team that can do some of the "heavy lifting" for your team's larger projects (e.g., predictive modeling).
4. Reduce and consolidate disparate data sources. If you're lucky enough to have or pursue a universal data mart or EDW then great. For the rest of us, another option may be deploying an application that serves as the front-end for multiple databases. This option is available through several marketing automation vendors.
5. Ensure your database marketing and lead management teams are working together if not part of the same group. This is particularly important for establishing a closed-loop lead management process.
6. And last but certainly not least, establish metrics and targets to measure the performance of your database marketing capabilities. (e.g., data quality indicators, lead generation data to track the success of list pull activities, response times and internal customer satisfaction if you're leveraging a shared services model)

If you're fortunate enough to have a marketing operations individual or team, then turn to these folks for help in deploying the process rigor needed to initiate these actions.

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Marketing Budget Cuts of 15% for First Half 2009

Within the technology marketing sector, I predict budget cuts of 15% or so for the first half of 2009. And within the typical marketing mix, the events budget and traditional-media advertising will bear a dis-proportionate share of those cuts. Given the trend of accelerating spending on digital advertising, it is more likely then ever before that traditional media spend lost in the downturn of 2008-2009 will not - ever - be replaced.

In the tech industry we are now, over the past couple of months, just acknowledging the impact of the recessionary cycle; even while the macroeconomists are now saying we have been in an overall recession for a year. My sense of the marketing budget cuts in tech is that at the beginning of an acknowledged recessionary cycle (i.e. now), there is an over-reaction that brings budget cuts that go too deep on the first pass. It's the nature of management which is so often short-sighted. I have believed that good marketing investment policy has elements of a large inertial flywheel: let it stop spinning and the fuel to get it going again costs a lot more than if steady increments had been consistently applied. Vendors should have the wherewithal and courage to keep their investments basically steady.

Other guidance for senior marketers:

• Use the downturn to permanently eliminate or re-shape entrenched silos of program costs: 1) Example: Isolated events not part of a broader campaign or important new launch; 2) Let the downturn play the role of "bad cop"; 3) Be most rigorous/suspicious of heavily guarded budgets
• Given the forecasted short duration of the downturn: 1) limit staff reductions . . . Marketing headcount turnover has already exceeded 9% annually for the past two years; 2) Use the downturn to mandate/effect more aggressive Content Audits
• Identify and create shared services: 1) Target is duplicate discretionary costs (e.g. across your 3 product lines, PM’s have purchased 3 separate on-line community platforms); 2) Target is duplicate activities executed within fixed costs (e.g. you oversee 3 product lines and each group spends 4 days per month on separate dashboard performance reporting compliance, which you are unable to normalize)
  
  By Rich Vancil, VP, IDC's Executive Advisory Group (rvancil@idc.com)

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A View from the CFO's Office. . .

I recently attended MIT Sloan's annual CFO Summit in Newton, Massachusetts; not just to earn the CPE credits needed to maintain my CPA certification, but more importantly, I wanted to gain an understanding of CFOs' perspectives in this difficult economic environment. This is something that every CMO should understand to help optimize their management strategy as well as their tenure.

It was no surprise that the theme of the conference was "Relentless Volatility". Jack McCullough, one of the two co-chairs of the event, put it well in his opening remarks: "My investment banker friend in London described this environment as being similar to a divorce but worse. . . 'I've lost half of my net worth, but I'm still stuck with my husband.'" I'd like to summarize several key comments from the event that may offer you some ideas for how best to not only ride out the storm in the upcoming year, but even perhaps to leverage the situation to improve your position and take share in this tough market:

• As part of your annual and intra-year planning process, ensure that you leverage scenario planning to best identify what challenges you may encounter in the next quarter or year, as well as what steps you need to take to minimize the potential damage from these risks;
• Communication in this volatile environment increases in importance. . . not just with your functional team, but also with senior management; (i.e., don't be intimidated to better engage your CEO and CFO, especially when you need help or need their advice)
• Ensure that your executive team knows that you not only understand the current challenges you face, but that you also have a plan to address them; (and meeting with the CFO offers a great chance to ensure that your plans are grounded in reality, as well as a chance to share your vision and increase their comfort level with your management framework and strategy)
• "We've spent a significant amount of time reallocating our budgets to ensure that we're focusing on investment in the high growth, high profitability areas vs. in the "harvest" areas that may not need as much investment", Norman Robertson, CFO Progress Software; (e.g., IDC CMO Advisory Practice research indicates that the average technology vendor allocates 38% of their marketing budget to newer, higher growth business areas or product lines vs. existing, more mature business areas or product lines)
• The large companies will no doubt be reducing their on-campus recruiting efforts this year. Therefore, now is a great opportunity to hire the best and brightest individuals from the top schools.
• And finally, continue to drive innovation within your team, motivating individuals to take chances in an effort to change how they do business today. We need to give our staff the opportunity to be leaders, stepping into the light that no one else may see.

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Marketing's Planning Process: An Ongoing Activity, not an Annual "Trip to the Dentist"

As your marketing organization approaches the end of its annual planning cycle, remember that it shouldn't end on January 1, 2009. As marketers we must get better at managing our annual and intra-year process as a part of our regular business processes vs. a once per year disruptive event. Doing so could be a helpful step forward in improving our ability to manage investment, shift resources in response to market conditions, and improve alignment within marketing and with the rest of the organization. Based upon interviews with marketing leaders in the technology industry and findings from IDC's recent Marketing Operations Board meeting, I'd like to offer the following "food for thought":

1. Staffing: Do you have an individual or team who's accountable for developing, executing and governing your planning process? The marketing operations function can provide the foundation and discipline for a well-orchestrated and managed planning process. Although this role has been effective in planning and orchestrating marketing's annual and intra-year planning process, marketers' view of planning as a separate activity from their daily job coupled with their lack of financial acumen continues to hinder the success of planning. (email me to receive a copy of our recent mktg. ops. study. . mgerard@idc.com)

2. Process: Marketers have made significant progress in establishing planning processes, such as global marketing leadership boards, a consistent taxonomy, financial tracking and other performance measurement processes; however, the lack of consistent adoption of these processes across the organization including a lack of alignment with finance, sales and regional marketing must be overcome to advance marketing to a higher level of operation and performance.

3. Technology: It is only in the past 3-4 years that most marketing organizations have actually achieved an understanding of how much they spend on marketing across the organization, mostly leveraging highly manual processes and Microsoft Excel. A recent IDC study revealed that 40% of IT marketers in companies >$3B in revenue continue to use Excel and other manual processes vs. a more automated MRM(marketing resource management)-type solution. It is time for us to advance to the next level of marketing, including tracking of investment at a more detailed level. (e.g., by objective, campaign, activity, brand, product, country, or segment) MRM applications offer the opportunity to do this in a more systematized and efficient manner. But remember, process first.

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