Reaching out to the CMO
IT leaders must come to terms with the growing technology buying power of the marketing department
For the first few decades of the information technology revolution, the focus of most IT investment was internal operations. Computers were installed to record and analyse an organisation’s information, and software was designed and implemented to automate internal processes.
There were, of course, IT systems that helped the organisation interact with the outside world, such as the customer relationship management systems that became ubiquitous in the 1990s. Still, despite their name, these were primarily designed to help organise an organisation’s customer data.
This made sense in an era when the means of communication between businesses and their customers were analogue. The marketing department had to concern itself with TV or newspaper adverts and, latterly, direct mail campaigns.
This is no longer the case, of course. The Internet and, more recently, the mobile web mean that digital technologies are a vital component of customer interaction. The technology requirements of a corporate marketing department have expanded rapidly in the past few decades.
Growing web presence
Once upon a time, it was considered enough to have a website with a list of products online. Now that website must support videos, social media interaction, partner and supplier portals and much more besides.
Email marketing has grown to become a discipline of its own. As the volume of marketing emails increases and consumers become increasingly empowered to block content they do not want to receive, many businesses are turning to sophisticated analysis to determine which messages will engage which customers.
Similarly, advertising is now more of a science than an art, as online advertising platforms such as Google allow advertisers to analyse click-through rates and return on investment in ever growing detail.
And now social media has emerged as an entirely new customer channel. Most businesses are still figuring out what to do with social media, but some are pursuing high-tech strategies, such as building specific content for social networks such as Facebook apps, and analysing social media messages to determine sentiment towards their brands.
All this accounts for the growing technology spend of marketing departments. In late 2011, analyst company Gartner predicted that by 2014, the typical marketing department’s technology spend will be equivalent to 25% of the IT budget and that by 2017 chief marketing officers will spend more on IT than CIOs.
This prediction was much cited throughout 2012. Clearly, many of the IT industry’s biggest suppliers believed in the prediction, and they acquired marketing technology suppliers like there was no tomorrow. Oracle, for example, acquired no fewer than three social media marketing technology providers: Collective Intelligence, Involver and Virtue.
Salesforce.com picked up Facebook content development platform Buddy Media, adding it to its ‘marketing cloud’ suite alongside last year’s acquisition Radian6.
IBM bought marketing analytics vendor Tealeaf, while data warehouse vendor Teradata picked up email marketing technology supplier eCircle.
Such acquisitions may help these vendors make sure that they are the beneficiaries of the marketing department’s growing technology investment. But what about the IT department? Gartner’s framing of the CMO’s growing buying power suggests an organisational divide – a competition, even – between IT and marketing.
Despite the fact that the IT department should be the technology centre of excellence for any organisation, there is a mismatch between the historical focus of IT and the technologies that marketing wants to deploy. As discussed, IT has been focused on process automation and managing internal information sources. And it has been focused primarily on back-end systems, having standardised on the Windows end- user environment years ago.
Marketing, by contrast, wants IT systems to excite and engage people; that persuade them to part with their money. It wants systems with highly usable interfaces that work across multiple devices (or channels), and the technology stack of principal importance is the web.
An idea that emerged back in 2011 has some explanatory power in this context. In a white paper for AIIM, noted technology pundit Geoffrey Moore contrasts ‘systems of record’ – the kind of thing that IT departments have concerned themselves with for the past 50 years – with ‘systems of engagement’, which encourage customers (and employees) to participate in an organisation’s processes.
The distinction can be overstated – most systems have characteristics of both – but it helps to explain why IT departments may not be best suited to deliver the needs of the marketing department.
It may also explain why some organisations have appointed what they call ‘chief digital officers’. All modern information technologies are ‘digital’, of course, but in a marketing context the word refers to ‘digital channels’, such as the web and mobile.
One example is Starbucks, which in early 2012 appointed both a new chief digital officer and a new CIO. The former, Adam Brotman, has responsibility for the company’s web and mobile presence, its social media strategy and its loyalty card and ecommerce operations. CIO Curt Garner, meanwhile, oversees retail system, information security, finance systems, business intelligence and software engineering.
It is not unreasonable for organisations to seek marketing technology specialists to lead their marketing technology strategies. However, this is not to say that IT has nothing to offer the marketing department as it makes its technology investments.
In September 2012, Information Age looked at the potential contributions that the IT department can make to a social media marketing strategy – but many of the same lessons can be applied to all marketing technology deployments.
One is helping the marketing department build systems that scale. It is well within the marketing function’s ability today to select and deploy some kind of marketing application for a pilot project. However, scaling up that pilot system to enterprise- wide deployment will more than likely require deep technological experience, which IT can bring to bear.
Also, IT can help to standardise tools across the enterprise. It may be the case that different units within a marketing department are using different tools to do the same job. Standardising on the best tools can help improve the organisation’s buying power and aid the reuse of skills, and is something that IT can help to enforce.
And third, the IT department may be able to help marketing in making sure that their systems are compliant with data protection, privacy and information security policies. Marketing systems consume vast quantities of personal data and are therefore at high risk of breaching privacy laws.
Of course, all of this requires good relations between IT and marketing, which may not have been the focus of many CIOs until recently. In 2013, then, IT executives would be advised to familiarise themselves with the objectives of their marketing colleagues, as they could be vital allies in the coming years.