We need to talk... We as an industry have a marTech obsession - and unfortunately like any obsession it could actually be bad for us. Over the last month, we at Arktic Fox HQ have been spending a lot of time thinking about marTech utilisation and how it is being used for all of the wrong reasons.
The story of a failed marTech implementation is not new. However, what is concerning is an increasing body of evidence that is pointing to a level of fatigue in utilisation of marTech, and bloating of marTech stacks. For many teams, this is generating more complexity rather than delivering value. With a slowing economy, the level of scrutiny around marTech return is ratcheting up a notch and it serves as a good reminder to consider the question of; is less marTech going to deliver more value for our organisation?
A decade of fast growth
We’ve all seen the famous marTech ecosystem charts from Scott Brinker. Since 2011, the number of marTech platforms have ballooned from 150 solutions to over 11,000 at last count. Now a $US344 bn industry, the marTech industry has become a lucrative business for the vendors and implementation partners alike.
With over 11,000 solutions, navigating the environment and trying to procure the right solution has become more complex, particularly as there is significant bleed across the industry in terms of the role and purpose of platforms. Marketing automation platforms claiming some Customer Data Platform capability, Digital Asset Management tech providing some functionality to manage workflow, and resourcing are some of the many examples of bleed in the space as vendors seek to provide end-to-end solutions and take a bigger slice of the pie.
Stacks of tech - but utilisation dropping at a rapid rate
As the marTech landscape has grown, and organisations have turned to technology to better utilise data, drive efficiency, connect experiences and more, marTech ecosystems within organisations have grown.
According to Scott Brinker in 2021, enterprises are deploying on average 90 marTech tools (which sounds on the high side but possible within large enterprises). This demonstrates the bloating that has occurred over time as brands add and evolve their stack.
A study from late 2021 has found that more than a third of marTech stacks within B2B environments now have more than 11 marTech platforms in place to support strategy delivery and enhance ways of working.
The growth in the number of platforms being deployed by brands has in part created the utilisation issue which is now upon us as an industry.
A recent study by Gartner titled 4 Actions to Improve MarTech ROI, has found that in 2023, utilisation of marTech had dropped to 33%, down from 58% in 2020. The utilisation score measures the percentage of those capabilities that are being utilised by your company today and what is planned for 12 months from now.
Bloated stacks are obviously a factor impacting utilisation. The Gartner report shows that the complexity and sprawl of the marTech ecosystem is impeding marTech utilisation. But it is not the only factor at play.
The Arktic Fox 2023 Digital & Marketing In Focus study found that the biggest challenges brands still face when it comes to marTech is driving integration between platforms and effectively implementing and embedding them. If you can’t effectively integrate and embed platforms, utilisation of marTech capabilities falls well short of internal expectations.
The ability for platforms to deliver on their promises is also a big challenge. At the recent marketing technology symposium in the Hunter Valley, Scott Brinker shared that today, the average backlog for automation is 3+ more months. The truth is, that today much marTech is still not plug-and-play, and requires technical teams to support implementation and integration, alongside of other priorities within the organisation. This dependence makes it more difficult to realise value and leverage capability. Until no-code alternatives take hold, the industry will continue to experience issues with utilisation.
Finally, the capability of teams utilising the technology is still not where it needs to be. The Arktic Fox Digital & Marketing In Focus study has found that marTech strategy and implementation is the second biggest capability gap teams possess today. So it stands to reason that for these reasons and others utilisation is dropping.
Utilisation ultimately impacts return and future investment
The 2023 Gartner study demonstrated the problem facing marketing teams today. As cost pressures within organisation increase, the vast majority of marketing teams are under pressure to cut their marTech spend to improve their ROI. Lower than expected utilisation rates have had a direct impact on demonstrating return, and in turn, smart brands will increasingly look to trim the bloat, double down on sweating their assets and re-build belief that marTech can and will deliver the returns that are anticipated.
Addressing marTech bloat and driving utilisation
For brands contemplating if their stack has become a victim of the industry's hype and effective sales techniques - and is in need of a strategy re-fresh - there are some practical steps brands can take to lift ROI and utilisation.
1. Assess the overlap in solutions
As outlined in this piece, increasingly, platforms are solving more problems for brands. As your marTech provider's product roadmap evolves inline with market needs, it is important to step back and assess if you have duplication of capability within your stack, and whether or not you can consolidate to fewer platforms without compromising capability.
2. Understand what is driving ROI
Brands need to understand the true impact and contribution of marTech activities to deliver on strategic outcomes. Robust reporting (if not in place) provides the transparency and insight to determine where to double down on efforts and where to pull back in order to improve ROI.
3. Resist the urge of the shiny and new
Putting on the breaks to procurement of new tech, until existing tech is effectively embedded, is an obvious but overlooked strategy by many. Fewer platforms that are well embedded and delivering strong outcomes is better than having more platforms that aren’t effectively embedded.
4. Get in the habit of asking your implementation partners what's in it for them
If you are still procuring platforms but want to maximise utilisation, it is important to ensure the solution will best meet your organisation's needs. Many implementation partners receive direct and indirect kick-backs from the procurement of platforms by clients. So it is important to ask implementation partners what's in it for them if you choose the platform they are recommending. Ultimately the platform needs to enable your strategy, not serve their needs.
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