Digital Marketing Leads Digital Business

What is Happening?

During Marketo’s 3-day Marketing Nation Summit in San Francisco this week, Saugatuck noticed several developments that attest to the rapidly-growing influence of Marketing as a locus and shaper of Cloud Business and the growing shift toward “digital business” strategies.

The event drew 6,000 attendees this year, up from 2,500 in 2013. Marketo itself introduced a slew of updates and changes, including an updated user interface, new real-time personalization capabilities for websites, and a new dashboard view that can become a portal for other applications in the Marketo partner ecosystem.

It was clear that Marketo and its partners are intent on expanding their audience beyond the core technology and startup businesses that have been their earliest adopters to include larger and more traditional types of enterprises, including Kaiser Permanente, CA Technologies, and General Electric (GE) – with GE CMO Beth Comstock keynoting on the third day of the event.

The scope of Marketo’s ecosystem is also growing rapidly to include numerous integrations, applications, analytics solutions, data analytics platforms, etc. “Marketing is a team sport” was a mantra oft-heard in presentations, and Marketo’s partner network was no exception, with many vendors offering services to help expand the capabilities of Marketo’s core service, as well as to tie Marketo data together with CRM systems such as Salesforce.

Why is it Happening?

The discussions of Digital Marketing’s rapid pace of change and maturation were constant, from the keynotes, to customer conversations, to the tradeshow booths. Saugatuck repeatedly heard phrases like, “it wasn’t like this 6 months ago” to, “we’ve never had anything in IT that changes so fast” to, “the change this has caused [for my organization] is massive; we’ve never been at the cutting edge like this before.”  These themes were consistently expressed throughout the more than a dozen customer conversations we had – with user firms of all types and sizes emphasizing that they are working hard simply to keep up with the pace of change.

While marketing organizations have long been champions of all things digital, today’s Digital Marketing (DM) capabilities are becoming core to marketing strategies – and a key cornerstone of the important transformation that is occurring, as many company’s increasingly becoming “digital businesses.” This is especially true for business-to-consumer and business-to-business entities that are built on and around IT as a core part of their operations.

Even as marketers face unprecedented challenges in keeping up with the pace of change, businesses as a whole face a similarly tumultuous shift in the way new technologies present a moving target, as businesses seek to modernize and improve existing processes. In that way, at least, Digital Marketers have it easier; although their pace of change is the fastest in business, they also don’t have the vitrified business processes to modernize as they go forward.  Saugatuck research indicates that digital business / Cloud Business efforts by marketers will drag the IT systems that they depend on forward faster than most other business units.

Even an industry leader like Marketo is being kept on task by the rapidity with which the market twists and turns, and the number of innovators trying to compete for a competitive edge in this space. GE CMO Beth Comstock shared, “What scares me is that all technologies are moving so fast…they are so interconnected.” She followed that by asking, “How fast can you be? How much experimentation can you do?

Market Impact

The “runway” available to take early-adopter advantage of any new business technology is exceptionally short. That runway for DM is shorter than any previous technology that we’ve seen. In the short term, marketing departments are going to make significant investments in modernizing their existing operations by bringing in next-gen DM tools and will begin to focus more on the tactics of employing these new tools to improve basic marketing metrics.

Longer-term though, for many firms there will remain an imbalance between the company’s IT capabilities and the capabilities they need to become digital businesses. As noted in a recently published Strategic Perspective (see STR-1315 if premium subscriber, or Lens360 blog post summary – The Importance of Time and Place in Digital Marketing) – the shift to real-time and context-aware marketing strategies demands not only modern tools, but a significant refresh of traditional back-end data and analytics systems to support these approaches.

As company efforts mature in the marketing space, and they move beyond the cycle of collecting data, analyzing data, and acting on the data at a tactical level – the need to develop more comprehensive and cohesive marketing strategies will only accelerate. In order to achieve business goals for marketing though, it will almost certainly require change in more than just the marketing department. We expect this change to come about in stages:

  1. Tactical acquisition of Digital Marketing tools to gain necessary software capabilities – Marketers start by acquiring software and begin to experiment with Marketing Automation, and other capabilities.
  2. Developing a Strategic Focus – To move beyond the tactical use of DM tools, companies will need to develop comprehensive strategies where Marketers will be held accountable for business goals. In holding them accountable though, they will need to be given the capabilities they need, in the form of cooperation, technology, and training.
  3. IT, Marketing, and Sales Alignment – Close alignment between Marketing and Sales is already a best practice for Digital Marketing success, but it doesn’t come easily to all organizations. Increased IT spending by Marketers points to the need for Marketing and IT to cooperate more directly on a company’s technology strategy. As these three groups get into line, it becomes easier for them to help each other enact an effective digital strategy, since data sharing between these groups is of maximum impact.
  4. Involve Marketing early on – As marketing becomes more scientific, and more capable of proving its effectiveness, they will also need to become an important part of product development. Advanced digital marketing divisions begin to encompass many aspects of market research, and companies need to take advantage of those capabilities earlier on in the product development cycle.
  5. Keep the Pedal to the Metal – The customer is always a moving target and the expectation that marketing be accurate is greater than ever before. As Marketing capabilities improve due to changing business requirements, customer expectations, and technological advancements, it becomes the duty of marketers to stay ahead of the curve to ensure that they continue to meet their business needs.

Digital Marketing will lead the transformative change to business that the Cloud has been promising for years, and drive widespread advancements in corporate IT capabilities. As Marketers are able to prove their effectiveness, there will be more pressure than ever to ensure that they can take advantage of data and applications from across the organization in order to maximize their contribution to the business. This means modernizing legacy IT, integrating disparate data sources, and sharing data with partners and suppliers. Companies need to assemble a view of the customer that they have never been able to build before. It will take improved alignment between all aspects of the business, from product strategists, to customer support reps, to salespeople, to marketers, and to IT.

Even as this change happens though, it is important that companies not expect it to be a one-time event. As we have seen over the last few years, Business and Technology change shows no signs of slowing down.

Alex Bakker

About Alex Bakker

He has written and presented research on information management, data administration, applications development, application integration, mobile commerce / payments, graphical user interface and usability strategies, web site development and Internet applications, network computing, electronic commerce, portals, hubs and communities. Prior to Saugatuck, Alex worked as an IT consultant where he provided server maintenance and IT continuity support to businesses and public sector clients for two years. Alex is a Whitman College alumnus, where he earned a Bachelor's Degree in Economics.

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