3 Proven Strategies to Boost Your Martech Budget

Over the last six years, marketing technology budgets have witnessed an 18% reduction, with Gartner highlighting a significant reshuffling of priorities in resource allocation this year. The steepest reductions have been evident in martech budgets, signaling a transition of authority from Chief Marketing Officers (CMOs) to other key enterprise figures, including IT leaders and Chief Financial Officers (CFOs).

This decline underscores a more profound concern: skepticism regarding the value of martech. Although IT and marketing departments have historically adopted martech solutions with high hopes, demonstrating their transformational benefits has proven to be difficult. This persistent challenge impacts Marketing Operations (MOps), marketing teams, and the organization as a whole.

The perilous pursuit of cost-cutting

CEOs, CFOs, and CIOs frequently pose the crucial question: “Are we truly deriving value from our martech investments?” With IT’s backing, CFOs often opt to streamline systems, frequently overlooking the unique functionalities that certain marketing tools provide. This consolidation approach can be likened to swapping out all vehicles for bicycles, simply because they both have wheels, with minimal regard for their diverse applications.

In a similar vein, some CFOs consolidate email systems like newsletter services (e.g., MailChimp), transactional systems (e.g., SendGrid), and marketing automation platforms (e.g., Marketo) into one single tool. Though these systems utilize email, their primary functionalities are not interchangeable.

• Newsletter platforms: Focus on deliverability, IP reputation management, bounce rate optimization, and blacklisting prevention.
• MAPs (marketing automation platforms): Concentrate on automation sequences, drip campaigns, and audience segmentation.
• Transactional systems: Prioritize scalability and the management of large volumes of time-sensitive emails.

While amalgamating these platforms might appear cost-effective at first glance, it often leads to costly complications, as the different email systems cannot substitute for one another’s specific features.

Conversely, CFOs often fail to recognize that some martech tools may not provide significant value to the company since the prevailing metrics often focus on costs instead of value. This could initiate a perilous downward spiral for the organization as a whole. As Rory Sutherland, Vice Chairman of Ogilvy UK, articulates:

“Costs can be quantified. When you cut them, results follow almost immediately. A missed opportunity, however, doesn’t appear on the balance sheet. But, it can result in serving your existing customer base increasingly cheaply until they reach a tipping point and leave.”

This unyielding commitment to cost reduction can ensnare companies, ultimately sacrificing long-term value and customer satisfaction for immediate benefits. In the absence of transparent metrics showcasing the true impact of martech, marketing teams find it difficult to protect their budgets and exhibit their value.

To disrupt this cycle, organizations must reevaluate how they assess the impact of martech, sync team objectives, and cultivate internal backing for martech investments. The following three strategies provide a roadmap for navigating this transition and reaffirming martech’s position in promoting business growth.

Step 1: Adopt martech metrics that reflect value

Current metrics related to martech primarily center on efficiency rather than value. The table below illustrates how these metrics tend to spotlight operational efficiency exclusively.

Organizations need to find a harmonious balance between opportunity and cost. The martech value metric interlinks martech maturity with company value, aligning internal performance with external results. Companies that can consistently illustrate the value derived from martech often experience budget increases.

Discover more: The CMO’s guide to uniting martech and business strategy

Step 2: Recognize martech agendas

Within organizations, two main agendas tend to emerge.

• One group is focused on what adds value to the company — prioritizing current revenue, operational efficiency, and optimal processes.
• The other emphasizes addressing customer needs — aiming for future revenue, overall effectiveness, and the right strategic initiatives.

The following matrix can assist in identifying these agendas prior to meetings.

A successful organization must find equilibrium between these agendas, acknowledging that both are crucial. Yet, many fall short, leading to continuous internal conflicts. IT often blames marketing for fostering Shadow IT and utilizing fragmented solutions, whereas marketing accuses IT of neglecting their requirements, stifling innovative campaigns that are critical for maintaining brand relevance.

Both perspectives hold merit—they are interdependent. Each approach contributes to both immediate and long-term organizational success. Remember the words of Dr. Phil: “You can’t change what you don’t acknowledge.” He is a recognized authority on resolving trust dilemmas.

Step 3: Identify your martech stakeholders

The crux of the issue is that no single department has ownership over the customer experience; instead, each believes it does. This division often leads to suboptimal use of martech tools and inadequate customer experiences. To foster alignment and shared ownership of martech, it is essential to identify internal stakeholders (or “buying centers,” as referred to by vendors). Typically, three main stakeholder categories exist.

CIO-CTO-CFO collective

• Concentrates on management of costs and controls.
• Prioritizes streamlining architecture, eliminating duplicity, and sustaining cost efficiency.
• Aims for scalability and performance, capitalizing on established revenue streams and practices.

MarketingOps-Admin-Data collective

• Focuses on managing internal martech, addressing technical challenges, ensuring service quality, and tackling workloads.
• Works on automating processes, broadening capabilities, and centralizing systems to alleviate workloads and optimize operations.

CMO-Marketing-CX collective

• Strives to discover new martech applications that can drive future revenue.
• Utilizes experimentation and growth strategies to uncover innovative business opportunities.

The martech stakeholder framework

The martech stakeholder framework provides a structured method for defining responsibilities across varied agendas and stakeholder groups. By harmonizing objectives, this framework enables teams to manage martech ownership and investment priorities more skillfully. Additionally, it serves as a practical resource for guiding internal discussions, ensuring clarity of each stakeholder’s roles and objectives.

Below, the framework highlights three distinct martech stakeholder roles, fostering a collaborative understanding that aids in informed decision-making.

Explore further: 3 strategies to overcome the annual marketing budget dilemma