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Digital marketing adoption drives IT and marketing partnership

As the digital age accelerates, marketing organizations must develop new skill sets and embrace an increasingly symbiotic relationship with IT departments.

Overview

Marketing is in the midst of a sea change that will impact both marketing strategy—and marketing procurement—in dramatic ways.

Digital marketing has come of age: Advertising dollars are rapidly shifting from “off-line” media such as print, and even television, to digital media. One major reason is digital advertising can be more targeted, and the effectiveness of digital ad dollars can be measured in faster (near real-time in some cases) and more accurate terms (for example, whether the targeted user clicked through and ultimately made a purchase).

The arrival of digital means that marketing organizations need new skill sets, and marketers in the future are likely to look as much like data scientists as brand experts. As marketing becomes more digital, marketing organizations also require a robust set of enabling technologies and data, and we are seeing marketing driving an ever-larger portion of IT spending at major corporations.

With this rising volume of project work associated with IT investments to support marketing, our IT and marketing sourcing teams collaborated on joint research to assess the broad digital marketing landscape today and the role procurement can play as a critical enabler of digital marketing.

The Rise of Digital Marketing Is a Well-Understood Trend

Evidence of the paradigm shift. In the U.S. alone, digital ad spending growth was near an estimated $60 billion,in 2015, driven by increasing adoption of digital marketing channels, as well as a market share shift from “traditional” media to digital media. Digital advertising platforms like GoogleTM, Facebook®, and Twitter® currently have dominant market share of digital ad spending and are experiencing strong revenue growth.

It’s not just about where marketers are advertising, but how they are executing marketing decisions. For example, one trend overtaking marketing is the concept of Programmatic Media Buying (“Programmatic” for short). Programmatic refers to automated, data-driven media buying where advertisers and media owners buy and sell advertising in an auction-based environment similar to how investors buy and sell stock on electronic exchanges (see: Maximizing Media ROI: Understanding Programmatic Media Buying). eMarketer, Inc. predicted that programmatic buying reached $15 billion in the U.S. in 2015.

One decision point is the build versus buy decision. Some organizations are bringing some core technology in-house—for example, Digital Marketing Platform (DMP) technology—if they have the right internal skills and maturity. Others rely on agency partners and technology partners to procure, manage, or do both.

Digital Marketing Landscape: Fragmented but Consolidating

The digital marketing technology landscape is evolving quickly. As shown in the figure, important marketing technologies fall into several major functional categories:

— Data Collection and Data Consolidation supports the key activities of understanding and analyzing who the customer is and how to target them.

— Content Creation and Content Delivery spans the process of creating relevant content, executing marketing programs through the appropriate digital channels, and measuring engagement and effectiveness (and ultimately ROI) of those investments.

Although the market for digital marketing technologies is diverse and fragmented, it is consolidating.

Larger technology companies are assembling marketing “suites” through acquisitions and internal development in order to deliver more of an end-to-end product portfolio and value proposition for marketers, and fewer technology integration headaches for IT. At the same time, the space is evolving quickly and innovative start-ups continue to spawn at a brisk pace.

Marketing in today’s digital world creates immense opportunity for those poised to capitalize. Marketing will drive a greater and greater share of IT investment, and the interdependence between IT and marketing will continue to grow. Together, this can be a powerful combination, and the sooner that IT and marketing establish tighter collaborative processes, the more value they can drive.

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Authors

Sources and Reference

  1. Data from eMarketer’s Numbers Hub at eMarketer.com.

  2. “US Programmatic Ad Spending: eMarketer’s Forecast for 2015 and Beyond,” October 8, 2015. Retrieved from www.emarketer.com.

  3. “CMO Spending 2015-2016: Growth on Overdrive,” Gartner Webinars. Retrieved from: http://www.gartner.com/webinar/3133117/player?commId=173929&channelId=5502&srcId=1-3147426801.

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