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Companies must pay more attention to how they manage their martech stacks, says Allocadia’s marketing VP
Sam Melnick, the VP of Marketing for Allocadia, will be a part of the 'How a $1B Startup Runs Marketing to Lead Digital Transformation' panel at MarTech Boston.
Next month, Allocadia’s VP of marketing, Sam Melnick, and GE Digital’s VP of marketing operations, Neenu Sharma, will take the stage at the MarTech Conference in Boston. The two will cover how GE Digital uses Allocadia’s marketing management platform to to manage marketing budgets and set up a standard taxonomy across its marketing organization so that everyone is speaking the same language.
According to Melnick, he has been managing the business of marketing for the majority of his career — working with everyone from multibillion-dollar companies to SMBs. As VP of marketing for Allocadia, he leads a team that helps organizations like GE Digital, Red Hat, Box and National Instruments gain insight into where their marketing investment is being spent and helps make sure it aligns with the company’s overall marketing objectives.
“This allows teams to put their energy, dollars and activity into areas that will support the business,” says Melnick, “We then tie the results of those efforts back to business results to help companies articulate marketing’s impact and ROI.”
Today, Melnick offers his take on where brands are falling short when it comes to managing their marketing technology, and the primary martech-management challenges companies face right now.
As part of a company that works with a number of large-scale brands, where do you see the biggest gap when it comes to how they are building out their marketing technology infrastructure?
Melnick: We see the world of martech in two categories. A tool either helps you run marketing (plan, invest and measure results) or do marketing (attract, acquire and retain customers).
With thousands of potential tools available, it’s easy for marketers to focus too much on the execution side — the “do side” — of their stack. Technology today like account-based marketing, predictive analytics, ad tech and more are focused on execution.
What marketers can’t forget is to equally support what’s going on behind the scenes to allow them to “run marketing” with operational technologies. Too many companies rely on spreadsheets and borrowed systems for this critical function.
How can companies keep from losing oversight of the operational side of their marketing technology?
Melnick: Our advice is to build the foundation operations for long-term growth. There are no meaningful quick fixes for operational excellence, but it’s a mistake to let this go unchecked.
Think about it like a three-legged stool. Your first leg is typically a system like marketing automation, which provides engagement data. The next leg includes results data from a CRM system used by sales and houses most of the booked revenue. What’s often lacking is the critical third leg of technology guiding activities, plans, investments, and how a marketing team aligns to the business — core functions of marketing performance management.
Regardless of their size, all marketers must think about their core operational foundation. When you build a house, you start with a foundation before you build walls and windows.
Make sure you can articulate the following: Where am I spending my dollars and time? How does what’s actually occurring compare to plan? In what ways is Marketing underfunded? How does that compare to external benchmarks? Am I driving leads and activity? Am I bringing in deals? Am I able to articulate (at a high level) what’s working, what’s not? What combination of tactics has generated the most activity?
In your upcoming panel at MarTech Boston, you and GE Digital’s Neenu Sharma will share insight on the importance of time-to-value for marketing investments. How do you define the time-to-value metric, and why is it significant?
Melnick: Time-to-value here means seeing return on an investment in technology. But there are different ways to do that — it doesn’t always have to be in terms of dollar value directly stemming from an investment in technology.
In fact, it’s really hard to quantify something that spans across the organization. Of course, you want to try and get to that ROI metric, but sometimes it’s more important to measure time-to-value through questions such as: Has my life been made easier since we bought this tool? Is our data measurably better? Can we make more intelligent decisions? Can we do more valuable things now?
I liken great technology to having someone great on your team. When you have an “A” player, you know it. You don’t wake up in the middle of the night worried about something, because you know they’re going to get it done.
In our session, you’ll hear about GE Digital’s unique challenge. They were faced with the task of bringing to market a new product line and driving $1 billion in revenue in a few short years. For them, time-to-value was critical. They had to have technologies that started to solve problems and [would] work for them immediately.
Teams in this situation can’t afford to experiment, trial and test. They tend to make baseline technology decisions based on proven traction, with a low tolerance for experimentation. These companies have to figure things out immediately.
What would you list as the biggest martech-management challenges for companies today?
Melnick: Marketers’ biggest challenges in managing their tech stack and integrating new tools fall into four buckets: data, consistency, integration and problem-solving.
Data quality is a common challenge among all organizations, which limits reporting and the ability to make better marketing decisions. In our research, only 8 percent of organizations have marketing, sales and finance data in one data warehouse that acts as a “single source of truth,” and only 28 percent feel marketing’s data is accounted for and well-formatted (this includes that initial 8 percent).
Further, only 21 percent of companies are able to point all measurements to marketing’s contribution to revenue. That means the majority of marketing teams within global environments are simply not measuring against the same data or metrics. They’re defining success differently, which will create a disparate experience for buyers.
On consistency, Allocadia’s research found high-performing marketing organizations report their use of marketing technology across the organization to be always or often consistent two times more [often] than low-performing marketing organizations.
Like data, if you’re not using the same technology across your marketing organization, how can you execute a cohesive strategy? It’s impossible to take a coordinated approach to communicating with the buyer or orchestrate the buyer journey if technology is disparate or siloed. That’s like your right foot and left foot going in different directions.
When it comes to integration, higher-growth companies are taking the time and doing the work to integrate their technology environments, making sure everything talks and works together. Companies who consistently integrate technology across their entire marketing organization are five times as likely to see 25 percent or more revenue growth as those with flat or negative growth (57 percent versus 13 percent), who use technologies in a silo.
There’s a tendency to want the silver bullet, or easy answer. It’s human nature. The problem is, marketing’s harder than it has ever been before. It’s appealing when you see a vendor claim to solve all your woes. The reality is — particularly at billion-dollar companies — there’s always change management needed. Technologies need to be integrated together.
Maybe they’d work exactly as they say they could in an environment with perfect data in a silo, with the world’s smartest marketers at the helm. But the world is generally imperfect — there’s just no such thing as perfect data, or a multibillion-dollar organization functioning at 100 percent efficiency. It’s a never-ending challenge.
This doesn’t mean marketers should give up. Rather, it’s a fun challenge to solve if you’re up for it, but it takes work. Having this mindset is critical to succeeding in today’s martech environment. While our first pass doesn’t always work, we can’t give up.
A lot of marketing innovations happening at large organizations are occurring for the first time — give yourself a break, learn from trial and error, and keep moving.
As companies continue to build out their marketing technology infrastructures, what other departments or executive leads within the business do you believe should be pulled in as stakeholders?
Melnick: Marketing does not work in a silo. There’s a tendency to play “hero ball” in marketing. This refers to the player in basketball who hogs the ball and tries to rack up all the shots by themselves. It doesn’t work. Marketing can’t be a hero.
Testing and building out your own stack is fine, but it’s not a long-term path for success. Like anything else in business, the whole is greater than sum of its parts.
Leading marketing organizations are three times more likely to align with finance. This relationship deserves more attention. Marketers need to prove what they’re investing in, whether programs or martech, as finance owns the overall budget, and often reports results and company health to board.
These two departments should work together to track investments and measurements: 57 percent of organizations expecting 25 percent or more revenue growth report that marketing and finance often or always work well together to track investments and measurements, compared to only 20 percent of companies expecting flat or negative growth. [Allocadia’s 2017 MPM Maturity Benchmarking Report]
At a certain size, IT needs to be involved to understand which tools each department needs to be successful. If you need to scale, you need IT’s support to integrate to other systems.
If you’re headed to the MarTech Boston Conference, be sure to attend Sam Melnick’s session on Tuesday, October 3. The conference’s management track, “How a $1B Startup Runs Marketing to Lead Digital Transformation,” will include Melnick and GE Digital’s Neenu Sharma sharing insights on how high-growth organizations manage their martech stacks.