Where marketing execs are spending all those tech dollars - and what IT should do about it
When you think of technology spending at a company, you probably assume the IT department disperses nearly all the money, with a small percentage going to departmental tech like smartphones and cloud services. But according to Laura McLellan, Gartner's vice president of marketing strategies, 50 percent of IT spending outside of the IT budget goes through marketing departments -- on top of IT's expenditures on marketing technology. In fact, by 2016, 80 percent of marketing tech investments will come outside of IT, Gartner predicts.
What is marketing spending its tech dollars on? The list is long, but breaks down into three broad buckets:
Marketing automation. This includes content management and social media monitoring, as well as the automation, aggregation, and analysis of social data. IT also includes established technologies such as sales-force automation and CRM. The goal of this category is to increase the effectiveness of the marketing processes themselves.
Social technology and mobile technology. Both technologies produce fundamentally different interactions with and among customers. How marketers can take advantage of them is unclear. At one end is the monitoring of people's new behaviors -- what they comment on in social media and how they shop or look up information when not at a desk, for example. At the other is using these new conduits to customers to serve them actively, such as tapping into location data to provide localized recommendations -- marketers use the terms "geotargeting" and "hyperlocal" to refer to these new types of possible services.
Analytics for real-time business intelligence. Historically, companies have used BI to assess the past, then roll out changes based on that assessment. But in a fast-moving world, that insight often comes too late. Also, it's typically based on data collected for very specific purposes, so the insights that can be gleaned from it tend to be limited to those original purposes. But new, often cloud-based technologies -- collectively called big data -- are providing ways to analyze information very quickly (even in real time), from multiple sources. Companies can adjust their operations and marketing more quickly -- and even more targeted to specific types of customers.
What's pushing marketing as the new technology lead?
Why is marketing so invested in technology? Because today, marketers must lead with data and insight -- and that is completely technology-driven, says Liz Miller, vice president of marketing programs and operations at the CMO Council, a worldwide network of marketing decision makers. It's the same reason that 20 years ago, IT was closely aligned to the CFO, who at the time was challenged with creating financial systems that were transparent, consistent, analyzable, and scalable in a globalizing world.
In a world where customers are increasingly found in digital venues, such as social media, websites, and apps, marketers are focused on how customers interact with companies, what companies can learn from those interactions through analytics, how businesses can better integrate and participate in those digital contexts, and how businesses can innovate the customer experience to add more value and thus increase sales and lower turnover.
Accomplishing these four goals means using technology across the board, both within the company and to interact with customers -- what marketers call "customer touchpoints." The technologies need to work together or at least let the information flow across the technology mix, whether owned by marketing or IT (it's usually a mix).
How one marketing chief's tech strategy works
At four-year-old data-storage startup Actifio, the marketing technology investment -- all cloud-based -- is two to three times that of internal IT spending. The company's investment in marketing tech is all about increasing both sales and employee productivity.
As part of that effort, Actifio uses Jive social networking software to create a living knowledge management system across its employees, which helps the sales- and support-heavy company better serve customers. "We all know what each of us know," says chief markerting officer Mike Troiano.
As its other core marketing tech, Actifio uses Cisco Systems' WebEx service for conferencing and Salesforce.com for its sales-force automation and CRM.
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