April 18, 2024

KT Business

The Business Servicess On for You

D2C brands fuse brand building & performance for the right marketing mix

6 min read

In 2023, CMOs invested over a quarter of their marketing budgets on technology, according to a Gartner report. But even though 25.4% of budgets were allocated to tech tools, utilisation of their organisation’s overall martech stack’s capability dropped to just 33% on average this year, marking a third consecutive year of decline (42% in 2022 and 58% in 2020).

Julie Woods-Moss, CMO, Thoughtworks agrees that marketers are still not utilising martech tools to their full potential. “I’m definitely in the camp that marketeers probably use less than 20% of what’s available,” she told exchange4media in a recent interview.

From cost pressures around investment in martech tools to whether clients are worried about the cookieless future, Moss delved deep into decoding what is the need of the hour in the martech landscape today.

Edited excerpts:

Thoughtworks has been working first-hand with AI for a long time now. Is the global client excitement around the buzzword similar to what is happening in India?

Clearly. You can’t have a conversation now without mentioning AI. I don’t think anyone was expecting this burst of innovation, sort of democratising AI. I think what’s changed is people’s appetite for understanding the technologies.

So for example, we ran a big program way back in October and November, where we ran practical how-to’s for very senior execs, and we also put our own execs through it. So I paired with some technologists and we went through and developed a working digital product using generative AI. And we did that in half a day.

I think it’s a little bit like when Java and HTTP first came out and people went, ‘I can develop my own website!’ So I certainly think that most of my CMO colleagues and most of the clients I’m speaking to were all forming a strategy, looking for those early experiments, looking for where they can get the biggest impact from automation, from innovation.

But marketers, in India especially, are facing challenges to show this impact or immediate ROI, which eventually creates pressure on them to cut down on tech spends. Is that a global trend as well?

No, I think that’s a trap you can fall into.

And clearly, some foundation programs are multi-year ROIs, but I think there are lots of high-impact, short-return use cases.

For example, we all know that short-form video has quite a lot of impact, but again, it takes a long time to commission and often to get quality, there is a cost associated. So we’ve been doing quite a lot of experiments with companies like Eleven Labs & Adobe Acrobat.

So I think there’s lots of low-hanging fruit and it’s really about matching ‘Where have I got bottlenecks?’ ‘Where have I got value, that is unattainable to me because I’m in a resource-constrained situation?’

So hopefully those are a few examples of quite meaningful experiments that you can get value from quite quickly.

Does that mean there are still a lot of martech tools that are left unutilized to their maximum potential? Are marketers not able to figure out what to do with them?

Oh, 100%, yes.

For example, Thoughtworks predominantly grew through inbound, so their Martech stack four years ago was fairly primitive. So I did have the opportunity when I joined to develop a digital experience platform, vision and roadmap. And we had some core elements, including Marketo.

And I’m definitely in the camp that marketeers probably use less than 20% of what’s available. And it’ll be interesting how things like Salesforce Einstein, a comprehensive AI for CRM, evolve. I think, unfortunately, to scale things like Einstein across an organisation gets very costly, and so you have to be quite purposeful about how you use it.

I think it is about finding a cost-effective way of putting insights in the hands of marketeers, because then we can use the underlying much better.

That being said, though, going back to 2017, I was running a team which was based a lot on programmatic, insight-led marketing. It was a lot of machine learning in the fabric. It wasn’t generative, but it was a classification of data science and highly productive and scalable.

So I think the Martech stack, especially with things like media buying, attribution models, and even interaction between platforms like LinkedIn and your CRM, is much more advanced, than finance or the people function.

Apart from the stack, does the ‘cost pressure’ crop up in client conversations of late, considering the hit that the global economy took?

Yeah, I think some of the patterns we’re seeing is, every CEO is saying, how can we reduce costs using this technology, how can we get to market faster, how can we get more revenue.

You’ll always get like early adopters in an enterprise, people who start tinkering. I’m an early adopter, I always like to do experiments.

But some are stepping back and saying, if I’ve got this much money to spend, how can I build my strategy?

So a lot of our clients are saying, help me create my strategy for generative AI with the context of budget X, Y or Z. Some say 20 million and others say 5 million, but we’re getting a lot of interest in that. People have seen a few successes and they’re kind of worried that the Wild West is going to open up and they’re going to waste a lot of money and follow a lot of shiny things.

The second thing we’re seeing is that people understand the risk here. There is a risk, and we’re getting a lot of interest from clients asking, how can we capture the innovation and have the guardrails that we are doing the necessary things to protect our brand, protect our data, and support our privacy. And honestly, I’ve been shown some things that hackers are doing through this new technology, which is on another level.

The number of up-and-coming AI startups in India is also staggering and with that, the concern of having a safe stack is also on the rise. What have you been noticing around the same?

A lot of clients are saying to us, ‘help me create a safe stack’. What should I buy, What should I build, what should I partner with? And so if you’re going to have a safe stack, give me the pond to swim in.

One of the things that Thoughtworks has been doing for tens and tens of years is something called technology radar, where we advise our clients on what they should be looking out for, what they should be experimenting with, what they should be starting to exploit, and what they should be fully deploying. So that’s a sweet spot for us.

What about concerns around the cookieless future, are clients worried?

Well, they are.

But I think that in a way, it’s almost like lazy marketing because I always say that buyers are not linear. And so this sort of last touchpoint attribution is quite a primitive way of thinking about how you develop relationships.

And so actually when I joined Thoughtworks four years ago, it was quite a shock for me. We had a policy which was open by design. If you’ve got great IP, a great thought leadership piece, why would you gate it, to capture some information that makes the marketer’s job easier?

Why not make the information open and make it easy to be accessible so that people can say, hey, that was interesting?

So we literally have people filling in forms on our website saying, ‘I read this article, can I speak to your consultant.’

Can you break down for us the global outlook on martech budgets and what share of the total marketing budget it usually takes up?

Your martech budget is typically people, programs and systems. So in a B2B world, you would want 40% to 45% of your budget in people, and then I would say around 50% in programs. And then depending on where you are in your journey, your system’s percentage can be anything from 6% to 15%.

If you’re a SaaS organisation where it’s highly programmatic, you can get it down to 6%. If you’re more of a high-touch complex B2B, it can be a little on the higher side.

But I would say on the low side you’d be looking at 5% of the total budget, but potentially up to 12-15%.

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