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					Gartner Predicts 2013: Digital Marketing Pushes Marketing Executives to
a More Strategic Role

Three key predictions for 2013 and beyond from technology research and advisory firm
Gartner.

1. Starting in 2013, digital marketing will be one of the top three imperatives
on 100% of CEO agendas.

Analysis by: Jennifer Beck

Key Findings:

      Each decade, a new concern hits the CEO radar. In the 1980s, it was
       globalization. In the 1990s, it was attracting and keeping the right talent. For the
       past decade, operational agility and integration has dominated. Circa 2010, CEOs
       started losing sleep over the impact of consumer technology and its ramifications
       on IT and all enterprises' many constituents.
      Gartner's 2012 CEO survey added some new topics of discussion: disruptive
       innovation, the continued consumerization of technology, the always popular tug-
       of- war between investments in revenue building, and the persistent need for cost
       savings.
      The strategic priority that trumps them all is the acceleration of enterprise
       growth, which has kicked off initiatives for market penetration, market expansion
       and opportunities to diversify. Right behind are concerns about time to market,
       permission to play, brand impact, and the ability to market more effectively
       through the integration of paid, owned and earned media channels.

Market Implications:

      As CEOs pursue various growth initiatives, they are paying particular attention to
       how industry rivals are "dropping the cost floor" and challenging industry rules of
       competition. As are their peers, they are lured by the low cost of entry associated
       with digital marketing channels and techniques. So, the opportunity is there for
       the taking as CMOs carve out the award-winning acts they'll perform while
       they've got the spotlight.
      Gartner analyst, Steve Prentice, interprets this year's CEO survey findings by
       suggesting CMOs proactively explore emerging markets and other sources of
       growth, even if those markets are unfamiliar, or even seem radical. He says that
       strong brand values, an open mind, and local knowledge can minimize
       marketing's steep challenges.
      As CEOs pursue innovation through digital, they will soon discover gaps in their
       organization's digital business strategy. Leading marketing executives will step up
       to fill that gap, using this opportunity to carve out budget for pilots and
       experiments — to build an innovation pipeline of ideas and initiatives. Call it
       marketing R&D, or the marketing think tank. Strategic marketing executives will
       not be afraid to act on ideas and tactics that are so new and different that they
       can't yet be supported by data.

Recommendations:

      Run on the assumption that an educated executive audience works to your
       advantage. There are plenty of self-appointed critics today, with just enough
       information, armed with the latest news article, to be really dangerous when it
       comes to decisions on digital marketing strategies. Clue them in to the facts, the
       options, and the course of action that links back to their strategic business goals.
      Don't get caught up in rapid deployments that aren't market-ready, with
       premature calculations about potential outcomes and making promises you can't
       keep. Sell them on experiments, pilots and bounded risk projects. You can learn
       quickly with digital marketing techniques at a lower entry cost than many
       traditional efforts.
      Got data? Big, bad, yours or theirs — the availability of free information from the
       social Web will put new pressure on your IT organization to deliver better insight,
       with formats other than spreadsheets and at frequencies that accommodate the
       time value of that insight. Put your data requirements at the top of the CEO
       agenda and presell those demands with your CIO over lunch. Assume your CIO is
       not ready to accommodate your new curiosities when you reveal that you are less
       interested in what has happened than in what will happen.

2. By 2016, marketing organizations will source 80% of their technology needs
externally, disintermediating internal IT.

Analysis by: Yvonne Genovese

Key Findings:

      Most information marketing needs to make strategic decisions originate outside
       the organization, from agencies, social and mobile platform providers, marketing
       business process outsourcers, data brokers, and email marketing houses. Internal
       IT is ill-equipped to help marketing capture, process, manage and interpret the
       data coming from social and mobile experiences.
      Most marketing executives have their own capital and expense budget for
       procuring technology and technology-enabled services. Many are exercising it
       aggressively. Two-thirds of companies have the equivalent of a chief marketing
       technologist reporting to the CMO. As marketing budgets continue to grow as a
       percentage of revenue, the portion representing acquisition of marketing-related
       technology and services will expand to challenge that of internal IT.
      As digital marketing and digital commerce take a strategic role in enabling
       growth, more advertising and search campaigns, brand measurement, analytics,
       social and mobile projects (and of course, websites) will be sourced externally.
       CMOs are comfortable using external sources — everything from crowdsourcing
       to digital agencies. CEOs will also continue to use federated networks of freelance
       experts (many come from the firm's investors, for example a venture capital firm
       will often provide a short-term marketing executive to get marketing off the
       ground while the CEO conducts a search for someone full time).

Market Implications:

      Three Gartner primary research surveys conducted within the past year affirm
       marketing's role as a major buyer of technology and technology-related services.
       But, marketing can't afford to travel at "IT speed." Nor can it afford the burden of
       outdated systems when better alternatives from marketing services providers
       exist. The internal IT function is playing catch-up — torn between a traditional
       governance and operations mentality and the desire to participate in revenue
       growth.
      For the next three years, marketing will purchase technology and services
       independently of internal IT — coupled with decisions to recruit a chief marketing
       technologist (or add such duties to a marketing operations manager, or the digital
       marketing manager).
      The debate over internal IT's role in the procurement of strategic marketing
       technology will continue to play out. Many will divide responsibilities (for
       example, customer databases or ERP-linked systems will go to IT, while
       customer-facing applications will go to marketing's strategic providers). It may
       well take some combination of the CMO, CIO or CEO being replaced to bring
       marketing and internal IT into agreement on how front- and back-office systems
       come together.

Recommendations:

      Assess your sourcing organization's capability to solicit and procure products and
       services from the type of providers you'll need to fulfill your strategic marketing
       goals. Grow them if you need to. Understand your pricing options, and be
       prepared to ask marketing service providers for innovative billing structures that
       base compensation on such things as performance or revenue recognition.
      Identify common ground with your peers, especially the CIO and the heads of
       sales, product development, and line-of-business P&L executives. Prepare your
       business justification and lead with revenue growth, increased profitability, new
       customer acquisition, customer retention, and other CEO and Board of Directors'
       priorities. Don't compromise your pursuit of fulfilling the CEO's business
       objectives for the sake of harmony.
      Start migrating to a more data-driven, decision-making environment. Review
       your portfolio of strategic marketing activities and identify where and how
       insightful data is generated in the pre- and post-sales phases of your customers'
       buying cycles. Think ahead to where new sources of digital data will come from —
       and how you will use new insight to advance true business advantage (not just
       marginal improvements).

3: By 2015, one-third of B2B CMOs will be accountable for a P&L.

Analysis by: Laura McLellan

Key Findings:

      Many digital marketing and sales channels are merging, as B2B marketers take
       responsibility to find and close prospects online through well-executed digital
       campaigns. Marketing is then recognizing the revenue and selling expense, which
       inevitably has a better P&L than when sales is involved. Marketers are also
       closing significant post-sale deals (upsell opportunities, for example) without the
       involvement of a traditional sales channel.
      Improved and expanded use of owned, purchased and derived marketing
       analytics is helping digital marketers target prospects who are willing to purchase
       via digital commerce. Marketing is increasing its use of badged and externally
       sourced chat and phone-based labor to develop and close business, as well as
       refining its abilities to continue social marketing-driven post-sales customer
       engagement, independent of sales.
      2013 marketing budgets show an increase in spending on product development,
       as marketers take responsibility for developing full life cycle offerings that can be
       marketed and sold online. Many CMOs tell us they won't take the top marketing
       role unless they are responsible for, or heavily influence, the product
       development function.

Market Implications:

      Many sales budgets may be reduced as B2B marketers become skilled at
       converting prospects to customers (without involving a traditional sales channel).
      The resultant savings may be divided among marketing, product development
      and internal IT, with some portion falling directly to the bottom line. Marketing's
      ability to obviate sales is creating consternation with the direct sales force and
      indirect sales channel partners, but marketing-driven revenue will only continue.
     Many marketing organizations are the de facto digital experts given their
      aggressive ramp-up of technical hires. But marketing will always be a mix of art,
      science and innovation. Those that move the majority of their resources into
      data-driven marketing may regret it later if they eliminate too much of their
      creativity.
     Enlightened marketing executives are assuming a stronger role in product
      development as they tire of "throw it over the wall" scenarios that relegate them
      to glorified marketing communications managers. As CMOs demonstrate
      knowledge of markets, customers, and competitors better than anyone in the
      company, they also are being invited to play a key role in defining new offerings,
      packaging, pricing, and rethinking old sales strategies. For example, marketing is
      moving toward four strategic metrics: profitability, revenue, market share, and
      customer retention.

Recommendations:

     Articulate a clear vision for how your marketing function is making strategic
      contributions to drive growth. Study the best practices, processes and
      organizational models of CMOs who have a P&L now in your own vertical industry,
      and those that are adjacent. Don't overengineer — find something that works well
      enough and make it better later.
     Put data requirements at the top of your list; if you can't drive all marketing or
      customer analytics, at least be a thought leader and active participant with other
      groups involved. Remember, much of the data will come from marketing efforts
      you execute or fund. Investigate external marketing service providers that can
      support your efforts in this regard. Hire a small cadre of data analysts to lead the
      way who are capable of interpreting the results and making strong
      recommendations for change.
     Don't fall into the chief revenue officer (CRO) trap. The last thing a good CMO
      needs is a diversion into fixing what many feel is the organization's most
      inefficient function —namely sales. Neither do you want marketing reporting to a
      CRO who comes from sales — unless you work in a company that views
      marketing as a tactical function. Build a supportive working relationship with the
      head of sales as you do with every member of the executive team.

				
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posted:4/26/2013
language:English
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