The Deep Dive
Martech: snake oil claims are hurting marketers and industry needs to "start being honest"
Marketing automation - or martech - now takes the single biggest slice of a marketer's budget, ahead of paid media and agency fees. But industry at large has to "start being honest" or the wheels will fall off, says the head of marketing at retail fashion chain City Beach, Mike Doyle, and The Lumery's Raj Kumar. There's "pressure everywhere".
"There are [martech] vendors out there that are definitely overselling the dream, it's tantamount to snake oil salesmen. But part of the responsibility sits on the brand side as well. We're burning the candle at both ends."
When it comes to martech vendors, Mike Doyle says there are undoubtedly “snake oil” merchants best to be avoided. But he says responsibility also lies with brands: They need a clear understanding of their requirements, what it is they want to achieve by implementing new technology. That is not always the case, he says. So while there is “an awful lot of overselling going on, an awful lot of overbuying might be another way of putting it”.
‘Martech’ can transcend the marketing department and the marketer’s remit. As such, Doyle says there is a “merging of the CMO and CTO worlds and that convergence means a lot of these systems are really whole business decisions -and need to be taken as such”. Otherwise, he says, the risk of underperformance and cost escalation increases.
The thin end of the wedge
Doyle says the bigger vendors are often selling “the thin end of the wedge” to get into the door. “So you end up saying, ‘okay, we’re going to buy this email platform, which will send out what we are sending out now more efficiently, and layer on some fancy bits on the side.’
“Then, once you’ve implemented, it’s like, ‘Holy Shit! That literally just sends email so I can’t interrogate my database. I can’t look at some key metrics. I can’t send these other kinds of communications out of the platform.”
The problem is, you’ve already bought into the system, you are committed, and that’s when the problems start.
“The last thing you want to do is go back to your CEO and say, ‘Listen, I messed up. What I thought I was buying is kind of only the engine of a car … so I need the other bits to keep on going down the road. Can I have more money? Because we’ll only be able to realise the return that I promised if we bolt these other things on.’”
Doyle says that approach “probably makes [vendors] a whole bunch of money”. But it is causing pain on the brand side.
“I’ve talked to a lot of my peers about this. Often they feel absolutely locked into a decision because they made it 18-24 months ago. The contract has to run its course and the organisation continues to demand more and more of that system – which fundamentally may not be the right thing, but they have no recourse, there is no backing out. So you continue to throw more and more money at the problem in the hope of seeing daylight.”
Doyle says he is a “big believer in stopping the bleeding”, a mentality hardened working at start-ups that could ill afford drawn out decisions. “You have to say ‘we need to pivot, we need to stop, this has to change. It may be painful but it will benefit us in the long-term’.”
"There's a merging of the CMO versus the CTO or the CDO right now and that convergence means there's a lot of these systems that really are whole-of-business decisions."
Appetite for disruption
Doyle believes that the market may not always favour vendors. As with every major market, he suggests disruption is coming.
“I think it is slowly changing,” says Doyle, citing Australia’s mobile carrier market by way of analogy.
“The Australian eSIM movement or lack thereof is based on phone companies resisting the idea of an eSIM going into your phone [enabling customers to easily switch from supplier to supplier]. They are resisting because they think ‘we have invested in acquiring this customer and building out this ecosystem to support them. Now they are going to be jumping from offer to offer … and it is a slippery slope’”, says Doyle.
“I think a lot of the martech [vendors] are going to end up in a similar situation: ‘We have to deliver the things that we promised to you at the beginning of this relationship because you might leave.’”
Advice for marketers planning martech projects
Investing in martech is like planning a major road trip, suggests Doyle.
First up, “you have to pick whether you’re in the driver’s seat or if you’re in the backseat. From an organisational perspective, you might be somewhere in the middle but I think it’s important to understand where you sit within that,” he says.
Secondly, “you need to have a map. Where are you trying to go as an organisation and what is your role within that.”
Thirdly, “be prepared to take some wrong turns. And you need to know your organisation will support you if you make a mistake, and that mistakes happen,” says Doyle. “So it is important to say that at the outset – but also to say when it’s wrong and don’t throw good money after bad.”
Then finally, it is about the team, or “who’s in your car”, says Doyle. “The majority of the success I’m seeing within City Beach is really driven from an exceptional group of people specially connected to the martech space that are doing exceptional work. But we’ve [also] got exceptional vendors [Emarsys] and I can’t recommend some of the guys that we work with highly enough.”
In summary, says Doyle: “Pick your seat, have a map, be prepared to take some wrong turns and then understand who’s on that journey with you. Because some people are going to get carsick - and you might need to kick them out.”
"There's pressure to deliver results very quickly. We start at the executive level and there's a need to drive revenue, more profit in shorter time periods. That pressure is ultimately passed down to usually the CMO or chief data officer."
The consultant’s view: Bigger than marketing
Raj Kumar, managing director of Melbourne-based martech advisory firm The Lumery, agrees ‘martech’ goes beyond marketing.
“It’s actually ops, it’s service, it’s the end-to-end customer experience and so the technology side of that equation is in itself very complex and very broad.”
But it’s the organisational aspect that is perhaps more complex. As such, Kumar suggests the “thin end of the wedge” approach described by Doyle - where vendors might sell in one product and then attempt to add on services - can result from a lack of understanding of the challenge and the problems brands are trying to solve through technology.
“Mike is touching on a lot of things that we see in the industry, which is this over simplification of what this challenge actually is. And then, what happens from a vendor perspective or a sales perspective is that the solution starts to become oversimplified and we’re underestimating what is required from a resource perspective, a skill set, processes, ways of working and organisational structure in terms of what’s required to make this come to life. It’s a lot of work and it’s not easy,” says Kumar.
While technology investment may be significant, “the technology bit is the easier part, there is great tech everywhere,” Kumar suggests. “The heart of it is the capability an organisation chooses to build around their technology. Ultimately, that’s competitive advantage. That’s what’s going to help a brand stand out from another brand. It’s not the technology they choose.”
"The shift in spend is largely a shift from marketing spend that was done in traditional channels, perhaps the media budget, perhaps advertising. But this is not a project."
Kumar thinks short-termism is overriding the need for the kind of fundamental structural change required if businesses aim to become fully data-driven. He says a shift in mindset across industry is overdue.
“I think it’s pressure from the need to deliver results very, very quickly. At the executive level there’s a need to drive more revenue, more profit in shorter time periods. That pressure is ultimately pushed down usually to the CMO or a chief data officer (CDO) or that sort of function and they’re looking for solutions. They’re looking for help,” says Kumar. “The promise of marketing technology is great systems that marketers can use to automate previously manual tasks, to deliver the enormous growth that they’re now tasked to drive. So, they’re looking for solutions.”
The trouble is, it’s not that straightforward.
“Unfortunately, the industry as a whole, whether it’s vendors, consultants, agencies, I think we’ve all played the part in really underestimating and over simplifying the challenge that’s in front of most CMOs and most CDOs,” suggests Kumar.
“We need to start being honest about … the amount of change an organisation needs to go through [to make martech work] especially if they’re starting on this journey in a relatively new way; if the rest of the organisation doesn’t necessarily leverage data or technology to derive insight and to make decisions,” says Kumar.
“If that fundamentally isn’t happening anywhere else in the organisation, then, there’s more significant process and cultural changes that have to occur that no piece of technology is ever going to solve.”
Implement capability, not technology
Kumar’s advice to marketers considering martech investment is therefore to place less emphasis on the kit, and more on the enabling structures.
“Spend less time thinking about what you’re going to buy technology-wise and more time thinking about how you’re going to use it, the change that is required to happen, the people and the skill set that you need to build, the processes that you need to put in place,” says Kumar.
“Arguably, the combination of all that is what will make you successful. It’s not just the technology decision. Of course, you have to buy good technology. Of course, you have to work with people that you want to work with. But it’s the rest of it that makes [a martech implementation] successful, so spend more time on the capability.”