DIGITAL CONNECTIONS 3.0

Martech’s strategic skills dilemma

How CMOs are navigating the strategic skills void in 2024

Introduction

Now in its third year, Modern’s Digital Connections research delves further into B2B CMO priorities and challenges when planning and executing their marketing technology strategy.

Last year, we revealed how ‘the customer is back’, with the customer journey at the forefront of strategic decisions.

Now, amidst a continued unpredictable global economy, a notable skills dilemma has emerged. This dilemma presents the challenge around strategic skills to deliver the vision and capitalise on the technologies available.  

This lack of skills, noticeable in major areas such as solutions architecture, martech integration, and the expanding Artificial Intelligence (AI) field, is pushing CMOs and marketing leaders to reconsider their strategies once again.

Despite the underutilisation of current technology and a palpable thirst for even more technology, the shortage of strategic minds prompts a rethink in how to move forward. Nevertheless, a significant opportunity for business growth lies within solving this challenge now that it has come to the surface.

Thoughts from an expert panel

This year, we also interviewed 8 CMOs to provide deeper insights into the research findings and help extrapolate the themes with their experiences.  

Read on to uncover where CMOs are seeing the greatest deficits, the challenges they’re grappling with and how they are looking to new technology for assistance.

Theme 1: The martech headache.

CMOs grapple with a hunger for more tech despite underuse of current solutions.

Substantial investment continues

Why the chronic underuse?

Investment in marketing technology has been accelerating rapidly over the past five years, with B2B businesses expected to spend $10.1bn a year by 2025, in the US alone (Statista).

In spite of substantial investments, marketing teams still struggle with efficiently utilising their technology. This issue continues to escalate with the growth of their tech stacks.

The Digital Connections 3.0 research found that 7 out of 10 CMOs use less than 50% of their tech stack. A figure that remains the same from Digital Connections research conducted 3 years ago.

The CMOs we surveyed attribute it to a ‘change in marketing strategy’ as the top reason (18%), followed closely by a lack of knowledge and experience in their team (17%), alongside data and integration challenges (14%).

Substantial investment continues

Investment in marketing technology has been accelerating rapidly over the past five years, with B2B businesses expected to spend $10.1bn a year by 2025, in the US alone (Statista).

In spite of substantial investments, marketing teams still struggle with efficiently utilising their technology. This issue continues to escalate with the growth of their tech stacks.

The Digital Connections 3.0 research found that 7 out of 10 CMOs use less than 50% of their tech stack. A figure that remains the same from Digital Connections research conducted 3 years ago.

Why the chronic underuse?

The CMOs we surveyed attribute it to a ‘change in marketing strategy’ as the top reason (18%), followed closely by a lack of knowledge and experience in their team (17%), alongside data and integration challenges (14%).

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7 out of 10 CMOs use less than 50% of their tech stack.

The emergence of a strategic skills void

In last year’s research, we reported that CMOs pivoted their strategic mindset, focusing on short term growth with reduced horizon scanning.

It is therefore unsurprising that this has impacted the use of their martech and execution of their marketing technology strategy.

However, a lack of team expertise is of great significance and rings true throughout the Digital Connections 3.0 research, underlining the data and integration challenges also identified. 

In particular, it shines a light on the importance of people, tech ownership and processes. Simonetta Rigo, Ex CMO, Evelyn Partners identifies that determining the right operating model and identifying who is responsible is the biggest challenge to ensuring you get the value required from your martech.

Rigo explains that all marketers now need to be digital, they have to be able to use the tech to run campaigns and self-serve. This requires a central expert who is responsible for the vendor relationship and who will train the team, so that the use is more distributed and widespread.

Breaking down silos and encouraging knowledge sharing is paramount to CMOs when overcoming this issue. Most notably, a coordination of sales and marketing efforts is where marketing leaders should begin.

Keep it simple. You can have all the tech in the world but you must align marketing and sales to make the tools a success. Keep talking, listen to their frustrations and get some quick wins to build relationships… unless the teams use the tools, your marketing is useless.

Sarah Roberts, Group CMO, Boldyn Networks

The macro view

Taking a macro view, economic challenges (39%), budget constraints (37%) and regulatory changes (34%) were noted by CMOs as influences that might impact their martech performance over the next 12 months. 

With the economy remaining unsettled, budgets flat and resource limited, there is a greater call for marketing leaders to do more with less. CMOs need to build robust yet dynamic teams that can both execute and strategise in 2024 and beyond.

 

Theme 2: The integration challenge

The need, yet inability, to consider martech co-dependencies and integrate across business systems.

Identifying the challenge

Investing in a martech stack is one thing, but getting the various tools to connect effectively has proven to be quite another.

When asked what their team’s biggest challenges were in relation to technology, the inability to integrate technologies comes top, with 35% listing it as a key challenge. 

As more businesses take a full lifecycle marketing approach – from acquisition to customer growth – CMOs agree that integrating with wider business systems and databases is critical to measure what’s working.

However, only 1 in 5 CMOs (22%) claimed their martech was fully integrated across business systems, with the majority (50%) integrated partially and 24% minimally.

Marketing should be measuring how it influences revenue and sales beyond vanity metrics like clicks. This is very difficult to measure. Often it requires a mechanical process on the back-end including conversations with sales and the customers vs a real time quantitative measurement through the martech stack.

Ganesh Iyer, former CMO, IPC

The human side of martech

So what is hindering progress when it comes to martech integration?

Undoubtedly the hardest part of business transformation and leveraging new innovative solutions is the impact on teams.

Managing change, hiring the right talent, upskilling people and redefining what success looks like are all crucial factors.

Phil Walsh, CMO at Turing expressed that the lack of a clear process and ownership is what’s holding marketing teams back.

This ownership and clear process should relate to the use of the technology and the proper input of data.

When speaking of his own experience, Walsh noted that sales must have equal ownership of the process including training, data entry, and integration to be successful.

Addressing skills gaps

The most prominent skills gap faced by CMOs is for marketing technology strategy – designing the systems workflows and automations at a high level and tying this into wider business processes. 

Addressing skills gaps

The most prominent skills gap faced by CMOs is for marketing technology strategy – designing the systems workflows and automations at a high level and tying this into wider business processes. 

An intrinsically linked issue

Marketing technology strategy has jumped to top position as the most chronic skills gap, from 5th to 1st place in the last year (rising from 20% in 2022, 23% in 2023 to 30% this year), this important role requires a broad, high level understanding of numerous platforms and a strategic mindset to consider their co-dependencies.

Serving a crucial function, this shortfall feeds into the underlying causes for other key challenges highlighted in the Digital Connections 3.0 research. Martech integration, process management, demonstrating ROI and ownership are all underscored by the requirement for marketing experts to possess a strategic mentality that ties it all together.

Some people are great at nerding out on the details, other people are better with the big picture. So finding both of those in the same person is really tough.

 

Gabriela Henault, CMO, AlphaSights

How CMOs will upskill teams

When it comes to filling skills gaps, CMOs are looking outwards to industry to support their teams. External training and certification courses are the preferred training method (31%), followed by vendor provided training (28%). A smaller proportion are favouring an in house approach (26%) and on the job training (14%).

When it comes to filling skills gaps, CMOs are looking outwards to industry to support their teams. External training and certification courses are the preferred training method (31%), followed by vendor provided training (28%). A smaller proportion are favouring an in house approach (26%) and on the job training (14%).

Theme 3: Planning ahead – the AI influx

Future martech investment focuses on AI to supplement teams and speed up processes.

Martech investment tops priorities

Containing the hype around AI

Looking to the future, CMOs are bullish about investing in technology.

When asked about their marketing technology priorities for the next 18 months, ‘expanding our marketing technology stack’ comes top (43%), followed by ‘connecting marketing technology to the customer experience’ (42%). A further 39% plan to develop their marketing technology strategy.

Whilst adding to the tech stack may seem counterintuitive to compounding the already present integration issues, some tech, such as AI is reducing resource challenges for CMOs.

Yvonne Balfour, CMO, Ultimate Finance identified that AI has its place but you have to try it, use it and understand its capabilities.

Balfour highlighted that AI won’t replace humans but it will reduce the time required to complete tasks and get your job done.

Over the last 2 years, the hype around AI, fuelled in part by the arrival of ChatGPT into the mainstream – has led businesses to ramp up their plans to use artificial intelligence and machine learning (ML) within their marketing function.

28% of businesses are putting AI at the core of their marketing initiatives and a further 44% are integrating it into selected strategic areas, according to our research.

With innovation being a major priority, CMOs are under pressure to use tech smartly to increase team productivity (via AI produced research and copy, for example), better customer or market insights (via research and social listening) and to provide newfound levels of scalability and personalisation in their outreach.

 

Martech investment tops priorities

Looking to the future, CMOs are bullish about investing in technology.

When asked about their marketing technology priorities for the next 18 months, ‘expanding our marketing technology stack’ comes top (43%), followed by ‘connecting marketing technology to the customer experience’ (42%). A further 39% plan to develop their technology strategy.

Whilst adding to the tech stack may seem counterintuitive to compounding the already present integration issues, some tech, such as AI is reducing resource challenges for CMOs.

Yvonne Balfour, CMO, Ultimate Finance identified that AI has its place but you have to try it, use it and understand its capabilities.

Balfour highlighted that AI won’t replace humans but it will reduce the time required to complete tasks and get your job done.

Containing the hype around AI

Over the last two years, the hype around AI, fuelled in part by the arrival of ChatGPT into the mainstream – has led businesses to ramp up their plans to use artificial intelligence and machine learning (ML) within their marketing function.

28% of businesses are putting AI at the core of their marketing initiatives and a further 44% are integrating it into selected strategic areas, according to our research.

With innovation being a major priority, CMOs are under pressure to use tech smartly to increase team productivity (via AI produced research and copy, for example), better customer or market insights (via research and social listening) and to provide newfound levels of scalability and personalisation in their outreach.

AI should make marketing easier, not replace roles.  It will make marketers who embrace it more effective… It can be used as a starting point for data collection and analysis, idea generation, and content and then we apply human intuition.

Phil Walsh, CMO, Turing

Practical uses for AI

When it comes to how CMOs plan to use AI, the research revealed a mixed picture.

Some are opting to develop their own private environments to leverage AI securely whilst others are either using existing tools embedded in third party tech or investing in new platforms specifically for their AI capabilities.

Only 2% weren’t sure or had no plan to use AI at all.

When it comes to how CMOs plan to use AI, the research revealed a mixed picture.

Some are opting to develop their own private environments to leverage AI securely whilst others are either using existing tools embedded in third party tech or investing in new platforms specifically for their AI capabilities.

Only 2% weren’t sure or had no plan to use AI at all.

Navigating AI challenges

As with all innovations, implementing AI is not without its challenges and in this new uncharted territory, concerns are widespread, or perhaps not yet fully understood.

CMOs cite the reliability and accuracy of AI outputs as the top issue (36%), followed by managing the costs associated with AI/ML maintenance (35%). Nearly a third (30%) are worried about integrating it with existing systems and workflows.

As enterprises increasingly seek to harness AI for competitive advantage, they often need a non-public environment where they can retain full control over their sensitive and proprietary data. These same needs propelled the widespread adoption of private cloud years ago and are now driving demand for private AI.

Dave McCarthy, Research Vice President, Cloud and Edge Infrastructure Services, IDC. 

Source: Equinix

Theme 4: Proving ROI – A moving target

As more technology enters the mix, the elusive ROI point edges further away.

A stagnant metric

Whilst the hunger for new tech is apparent, only 1 in 6 (19%) CMOs said they have delivered their marketing technology strategy and are now seeing ROI from their efforts, a figure that’s remained unchanged since last year.

Tech businesses were more likely to already be seeing ROI (26%), while Financial Services companies reported lagging behind in this area (12%).

When asked how far off they are from seeing ROI, 21% believe they are 18-36 months away. In Digital Connections research from 2022 and 2023, a similar prediction was reported (22% and 20% respectively). As more technology enters the mix, the elusive ROI point edges further away.

However, there is some hope. Only 2% believe they are more than three years away from reaching their ROI nirvana, and the majority (45%) believe they are 9-18 months away.

Calculating ROI is somewhat a nirvana metric.

Kieran Taylor, CMO, Broadcom

Why is ROI so important?

In a tough economic climate, marketing leaders are clearly under pressure from the wider business to demonstrate financial impact.

Improved marketing ROI was the number one measure for evaluating the success of their marketing technology investments (43%), above enhanced team productivity (37%) and higher sales conversion rates (36%).

However, interviews with the CMO panel highlighted that measuring ROI of martech isn’t something that has a magic formula or should be done at a granular level.

Paula Darvell, former CMO, Snow Software explained how they ask their team to take high ticket marketing purchases to the CFO. This fosters the ability to clearly justify every line item of spend in terms of business impact. 

Darvell identified that this changes the whole dynamic. The CFO then understands the value of the investment in advance in terms of tangible ROI, rather than being limited to a discussion around the number of potential leads the investment will generate.

This drives real accountability and a level of commercial acumen and executive interlock that can be missing for some marketing teams.

Final thoughts

In this year’s Digital Connections research, the overriding theme has been the emergence and realisation of a lack of strategic skills to enable effective visioning, implementation and integration.

With marketing technology strategy seeing the most critical skills deficit, existing challenges in martech integration, process management, demonstrating ROI, and ownership are being compounded. 

Leaders are addressing this shortfall through a mixture of external and internal training, emphasising the necessity of clear processes and combined ownership between sales and marketing for successful technology utilisation. 

Interestingly, as we move forward, the industry is showing an enthusiastic appetite for further investment in technology, especially artificial intelligence. There is a recognition that AI can ease resource challenges and increase productivity and insights.

Our findings also exposed concerns about AI’s integration with existing systems and its ongoing costs, suggesting the need for cautious management and strategising. 

In terms of realising a return on investment, while the desire is strong, the pathway to demonstrating ROI is considered complex – and the ever-increasing investment in new marketing technology and the lack of strategic skills to deliver it, is pushing that holy grail even further out of reach.

About the research

Modern commissioned Censuswide, a global insight-driven research company, to survey 315 CMOs in B2B companies with more than 1,000 employees in the UK and US, in December 2023. In-depth interviews with the CMO expert panel were held in February and March 2024.

CMO expert panel

Sarah Roberts

Group CMO, Boldyn Networks

Paula Darvell

Former CMO, Snow Software

Phil Walsh

CMO, Turing

Simonetta Rigo

Former CMO, Evelyn Partners

Ganesh Iyer

Former CMO, IPC

Kieran Taylor

CMO, Broadcom Agile Operations Division

Gabriela Henault

Former CMO, Alphasights

Yvonne Balfour

CMO, Ultimate Finance