CMO martech spend now exceeds cost of labor

CMO spend on martech has now overtaken that of human marketers, as products become more advanced, full-service and easier to integrate.
12 November 2018

Is automation putting the dampers on human marketing talent? Source: Shutterstock

The digital marketing industry is flooded with ready-made SaaS (software-as-a-service) products which can help businesses to automate, optimize and track their marketing efforts— usually, for a not-so-small monthly or annual fee.

Comprising thousands of vendors, the marketing technology industry— better known as ‘martech’— is a rapidly-growing ecosystem of applications offering specialized or full-service marketing solutions.

These companies have become so advanced, easy to use and integrate that, according to Gartner’s CMO Spend Study 2018-19, spend on martech in the US and UK has now outstripped that of human marketers for the first time.

The study of over 600 chief marketing officers across multiple industries comes as digital and marketing departments face increased pressure to demonstrate value and ROI of their business efforts amid “uncertain times”, according to Ewan McIntyre, senior director, analyst at Gartner for Marketers and lead author of the report.

At 29 percent, martech budgets now constitute the largest chunk of the CMO’s total marketing budget— up from 22 percent last year. Spend on labor, meanwhile, fell from 27 to 24 percent at the same time.

Among top priorities for martech were email marketing, online management and digital analytics, but these aren’t expected to stay constant. Artificial Intelligence (AI) is on a sharp rise, ultimately beckoning in an era where full campaigns could be designed without the aid of people.

However, while it’s easy to look at the findings and say that technology is replacing the human marketer, McIntyre suggests that’s unlikely the case. Instead, it’s more accurate to conclude that the shift in spend shows organizations are dealing with capabilities, resources, and talent in increasingly complex ways.

That’s because a large portion of this martech budget is dispersed across external ‘supporting services’ and internal teams; resources and providers— spanning traditional agencies (the right ones, that is), consultants and in-house experts which require a spread of human talent themselves.

But while martech spend is undeniably on the rise, there is still “redundancy and underutilization” in regard to its use inside organizations. That includes an overlap where marketing teams are employing multiple solutions in one category of spending, such as using two or more solutions for marketing analytics or multi-touch attribution.  

“Audit your martech stack to determine, not only the marketing tools your organization currently has in place, but to what extent those tools are being used effectively,” says Gartner.

“Pay careful attention to areas of underutilization and overlap. And, identify consolidation opportunities to reduce redundancy.”