I recently got a chance to interview Mark Smith, CEO and Executive Vice President of Research for Ventana Research, a leading benchmark research and advisory services firm that helps organizations manage and optimize performance. A 22-year industry veteran with research and product development experience at a variety of enterprise software companies, Smith is responsible for Ventana Research’s overall direction and global research on both the business and technology sides. In this interview, he shares insights gained from extensive research on marketing automation, and discusses their potential to maximize an organization’s overall performance.
Tell me a bit about why you decided to perform some research into marketing analytics.
Our firm has been doing research and advising the various lines of business for almost a decade. As we looked into the use of technology for marketing and spoke with clients, we realized the potential of automation to improve any aspect of marketing, whether it’s brand and category management, promotion and pricing, demand generation and leads or finding insights on the consumer and customer experience.
People today use more channels of interaction, including social media, so it is more difficult to understand their perspectives and plan marketing activities. There is pressure to deliver satisfying customer experiences across channels, interact with social media and deliver more value wherever you encounter customers.
To help our clients, we have done in-depth research on what marketing is currently doing with analytics and how it can improve by using them. This is part of the most extensive research ever done in business analytics; we have assessed every line of business and department, including IT, in today’s corporation. Having been a CMO and VP of Marketing earlier in my high-technology career, I feel a personal passion to improve the science of marketing.
Your research talks about how companies are improving their marketing analytics maturity. What are the top three insights you found about where companies are today?
The first is that marketing organizations are realizing they need more refined processes, which require dedicated applications to support them; marketing analytics is a key one of these that can help deliver optimal outcomes from the company’s investment in programs. The market for these analytics is not very mature, as many in the industry know, but marketing organizations are waking up to the importance of it.
A second insight is that marketing organizations have realized the limitations of using spreadsheets and related personal productivity tools for analytic activities; they actually increase the time, cost and risk of not executing upon their plans within and across departments. Some other areas of the business have already matured by automating these manual and resource-intensive activities. But our research shows signs that marketing is focused on finding dedicated technology relevant for its needs.
The third is that marketing analytics are essential for establishing trust and a collaborative relationship with sales to support revenue and business growth initiatives; the research found it’s important to have a broad scope of analytics to create metrics that can help understand marketing’s contribution to sales, customer relationships, finance and business operations.
Which non-obvious metrics should B2B marketing professionals be tracking?
Our benchmark found that metrics related to generating leads are very important to marketing from cost, quality and time perspectives, as are revenue metrics and tracking the business contribution of marketing.
In addition, we found that metrics related to the customer experience and satisfaction are important to gain the feedback B2B organizations need to understand the current opinions and issues in their customer base.
We also found metrics that matter to executives, particularly outcomes of investment, the customer experience and marketing’s contribution to sales; the metrics important to those at the director level and below are those that help them assess their weekly activities in areas like advertising and branding, demand generation, lead nurturing and others.
Other metrics are important also, but these are the ones that might not be as obvious.
What are the top oversights companies make regarding marketing analytics?
Marketing organizations, generally speaking, have not realized how far behind what’s possible they are in the marketing analytics that they use to evaluate their processes and team. Many assume that basic marketing analytics are good enough, but our benchmark reveals that they are not. It is revealing that while 68 percent of marketing organizations want to simplify their analytics, only one-third of them are planning to make changes to do that.
We found that many marketing organizations do not have a dedicated marketing analyst to support them. Our research found that people in management-level positions (VPs) are the most interested in having dedicated analysts, compared to executives above and others under them. About three-fourths of management [-level employees] are dissatisfied compared to half in the rest of marketing.
Another serious issue our benchmark found is that in the process of analytics marketing people spend over two-thirds of their time in accessing, preparing, cleansing and validating data and have little time left for the actual analysis. When decision-makers assess why this is happening, we think that most will find spreadsheets are complicating the matter.
How will marketing analytics evolve over the next 12 months?
Marketing analytics will become part of the standard business processes in marketing. Today over 50 percent of marketing organizations use spreadsheets, and that number is even higher in midsize organizations. We expect many organizations to discover that they must make investments to improve, and then take steps to determine what is required to support the entire marketing department, not just one activity in marketing.
Few marketing organizations have embedded analytics within marketing activities or dedicated analytics technology to assess marketing and interactions with the rest of the organization. We found that large organizations with over 10,000 employees are most eager to improve, but that smaller organizations need the most help.
Also, some marketing organizations that have invested are realizing that their analytics and metrics are not in line with their processes and governance. They will need to further automate the underlying technology related to data integration and preparation of analytics to address this issue.
A significant change is that organizations may no longer need their own specialized IT skills for installing and developing marketing analytics because of the advent of cloud computing; 40 percent of marketing organizations are interested in renting marketing analytics in this way, according to our research, and 29 percent have no preference for how they deploy them, so might consider this approach.
You need the right people, processes and technology to ensure success. What are the biggest sources of opportunity to improve in these areas?
We also add the information component to ensure that the people, processes and technology of marketing analytics are successful. The best place to start to improve is to do an assessment of your own marketing organization’s competency and maturity, which is pretty simple to accomplish. Then examine the range of solutions and technology available today, and insist on your particular needs.
Remember that different levels of marketing have different analytic needs. It will be worthwhile to look at providing access to analytics via smartphones and tablets, which will enable collaboration and timely review in marketing.
Bonus question: Anything else you’d like to discuss?
I’ll only say that there is opportunity for heads of marketing to get engaged and truly understand the importance of marketing analytics as a business process. Whether they improve their effectiveness will have an impact on whether they are respected within the marketing department, the entire business and the industry.
Do not settle for shortcuts and assume that email, spreadsheets and presentations will meet your needs. Those tools will only increase the costs, time and risk of marketing not achieving its maximum potential.