MyCustomer.com speaks with Jay Henderson about the dangers associated with marketing's greater control of IT spend.
Surveying more than 350 marketing professionals, IBM’s annual ‘State of Marketing’ survey continues to provide some interesting food for thought. As well as turning a light on emerging trends and technologies, the survey also separates out the high performing companies to provide some insight into what they are doing differently from the rest of the pack. And one clear difference that jumped off of the page this year is that almost across the board the high performing companies were far more likely to take an integrated approach to marketing.
This is not in itself particularly surprising. However, what the survey also reveals is that only around 22% of respondents actually run integrated campaigns, with the rest conducting them in silos, discretely and on an ad hoc basis, a practice that is inhibiting their ability to deliver effective cross-channel campaigns.
“It was very fashionable in the late 90s to create a dotcom subsidiary or separate company so you weren’t encumbered by the lack of agility that your bricks and mortar business had - and we have spent the last 10-15 years trying to rip down those silos that we created for email and the website,” says Jay Henderson, marketing expert and strategy program director at IBM. “High performing companies are much more likely to have integrated their online and offline campaigns and to have broken down some of those silos.
“They are also much more likely to be engaged in mobile and social marketing. So they are early adopters with emerging marketing channels, and they are more likely to have those campaigns better integrated. They are more likely to have learned that lesson from the late 90s not to stand all this stuff up in a silo and then need to tear it down, and more likely to try to take an integrated approach to new emerging channels.”
With consumers now communicating with brands through an increasing number of channels, it is essential that marketing systems are properly integrated to ensure that customers are addressed with consistent messages and offers, whatever the channel. But for this to happen, marketing needs to consult closely with IT to ensure this integration, says Henderson.
“Ultimately, to drive these really relevant personalised communications to customers you require a pretty holistic approach to understanding the customer, assembling a comprehensive profile of the customer, and to share that systematically across all the different applications that need that,” he suggests. “Pretty quickly marketers are going to find that in order to really truly deliver relevant communications they need IT’s help.”
And there’s the rub – because marketing and IT are infamously uncomfortable bed fellows. Indeed, according to the IBM survey, 60% of marketers point to their lack of alignment with the company's IT department as the biggest obstacle to reaching today's consumers.
“When IT isn’t engaged, marketers are much more likely to wind up with a highly fragmented view of the customer that result in a disjointed set of communications and marketing messages to customers,” emphasises Henderson.” And so when you think about it from a consumer’s perspective, their behaviour is they shop online, they buy in a store, they research on their mobile device and they buy on their laptop, maybe they call into the call centre. Consumers perceive the interactions they have with the brand as one person pulling all the strings, and that the knowledge about them will transfer from channel to channel and that the relationship and the dialogue they have with the company will transition across those channels. But when marketing is not working with IT there is a huge risk that those relationships and those dialogues are disjointed and not well coordinated.”
Marketing goes rogue
So why is there such a long history of friction between the two departments? Henderson believes that both sides harbour resentments – that IT is perceived as not understanding what marketing’s needs are, and that marketing is perceived as a group that is likely to undertake a “rogue” IT project.
And the survey demonstrates that changes are afoot.
“The shift we’re seeing is how marketing is changing, and you see the proliferation of devices and channels and you see consumer expectations rising, and as a result the new mandate for marketers is that they need to be much more agile, they need to be able to respond to the emergence of these new channels and devices, they need to be able to deliver relevant messages to the customers through these channels, and I think IT isn’t necessarily known for its agility,” elaborates Henderson.
And he believes that the IT department could be reaching a cross roads.
He continues: “Historically IT has really been focused around standardisation, and things like that. And so IT really has a choice at the moment – I believe IT should own the architecture for the marketing platform but their choice is they can be 20% more flexible than they have been in the past and influence 100% of the design or they can do what they have always done which is be 100% standards-driven and inflexible and only influence 50% of the design. So marketers will drive to be more agile and so IT can either help with that or marketers will go around them by either creating their own IT groups which we have seen, or outsourcing pieces of what they’re doing or buying on-demand software without talking to IT about it.”
A further interesting development in the dynamic between IT and marketing has been highlighted by Gartner, which suggests that by 2017 the CMO will spend more on IT than the CIO. While this sounds outlandish, Gartner analyst Laura McLellan has pointed to the fact that marketing is becoming increasingly technology-based, and that marketing budgets are already larger (and growing faster) than IT budgets. Indeed, 2011 B2B and B2C marketing budgets as a percentage of revenue were almost three times as high (10%) as IT budgets (3.6%).
Additionally, McLellan estimates that on average, nearly a third of named marketing-related technology and services is bought by marketing already. What’s more, she adds, marketing now influences almost half of all purchases.
Henderson believes that this will have sent shockwaves through IT departments. But he also believes that a scenario where marketing wrestles control of technology away from IT should set alarm bells ringing for business leaders. The ongoing tussle between marketing and IT may not be pretty, but there is an equilibrium that needs to be maintained and nurtured.
He explains: “From IT’s perspective, you start to get a little bit panicked – what do you mean that marketing is spending more on technology than us? But it is partially a reflection that marketers should be in control of those decisions and when we talk about IT and marketing needing to come together I view that as just because marketing controls the spend, it doesn’t mean they get to spend all that money without IT’s help. So the question is: what is the right balance of including IT in that decision-making process for those dollars?”
He adds: “Part of what we’re trying to say here is that we get that marketing and IT have had a lot problems in the past but in order to accomplish what the marketers need to accomplish it is time to set aside your differences and chart a path forward.”
Don't marginalise IT
While it makes sense for marketing to ultimately have the decision-making power as it is the department signing up for the business results, the reality is that IT should not be marginalised. And Henderson believes that the top brass must play a role in ensuring that this does not come to pass in their organisation.
“One of the key elements to addressing it is alignment at the executive level,” he explains. “We say it all the time, but the reason we say it all the time is because it is important and it drives success. Making sure that the executives buy in on it and drive it down into the organisation is absolutely key to success.”
Nonetheless, company culture will always be one of the toughest business issues to tackle, he warns.
“My perspective on it is that like a lot of things in business, it is a mix of people, process and technology. In some ways I think that the technology piece of it is not necessarily the hardest part to solve. You can always buy technology to solve a problem, and often times the culture aspects of it are harder to get right. The people can be the tricky part. Part of the reason that is, is when you look at the discipline of marketing, it is going through a pretty radical change. We have talked about this need for agility, but also just historically the discipline of marketing has been very focused on creative skill sets, and as technology plays more and more important a role, it is not that that creative skill set goes away, but there is a need to balance that and complement that with science and analytics and technology smarts.”
He concludes: “There is one giant tectonic shift in the skill set that marketers need and then we are also seeing over here that marketing and IT need to better collaborate together and so then there is a whole cross departmental element to what needs to happen culturally. And trying to create the right marketing culture is a pretty giant challenge for organisations.”