Why CMOs Have Stayed Consistent With MarTech Investments In 2019
by Ki-Young Choi
posted on 02-24-2019
The world today is characterised by rising levels of uncertainty as new technologies such as artificial intelligence generate innovation and disruption across industries, societies and economies. And this greater degree of uncertainty is leading to more conservative investments. However, a recent survey found that chief marketing officers (CMOs) have devised a contrarian plan: increase investment.
According to Adobe and Econsultancy’s 2018 Digital Trends Report, marketing professionals indicated they would focus their budgets on marketing technology (known as MarTech), innovation and personalisation. Notably, the budget for marketing technology has grown continuously. In 2018, a Gartner report found investment in MarTech represented 29 per cent of the entire marketing budget – year-on-year growth of 22 per cent – the highest single-category investment for marketing resources and programs.
Despite growing investment in MarTech, however, performance measurement or causal analysis is still difficult for many businesses. A client recently expressed frustration about the proliferation of digital devices, media fragmentation and consequent difficulty in proving channel performance. There are several reasons behind this, but the “silo effect” plays an important role here. If data produced at multiple touchpoints from various customers cannot be integrated or analysed, accurate targeting becomes impossible.
Businesses may not necessarily use the data they collect. For example, if traffic to a website more than doubles, can this be considered improved performance? Performance measurement should not stop here. The cause-and-effect relationship needs to be understood to be utilised in succeeding strategies. If it’s not, the data becomes dead data.
Korean company Lotte Rental’s new online portal MYOMEE – meaning a “subtle taste or thrill” – is a case in point for making use of all your customer data. The high-end rental service is disrupting the Korean retail industry by offering a wide range of products for rent for all kinds of consumers at various life stages. From travel deals and family-sized camping tents to luxury handbags and a weekly supply of freshly ironed business shirts, users have access to both economical and premium consumer goods to suit their lifestyle. The site’s popularity reflects online and mobile consumer purchasing behaviour, where an increasing number of millennials and “try-sumers” are buying the experience of the product rather than the product itself.
Lotte Rental understands that competitiveness comes from data-driven, personalised experiences and applies this to its curated online offering. Not only did this require a deep understanding of its customer data through real-time analysis, but also building personalised experiences based on unified customer profiles.
The leader of Lotte Rental’s platform strategy team, Sang-Hwan Huh, says building a platform that could provide recommendations based on customer behaviour, expectations and interests is no easy task.
“One of the challenges was finding a model that we could benchmark against because there was no platform like MYOMEE,” Sang-Hwan Huh says.
“Existing models are not equipped with features like checkout and billing, and most are nothing more than outlets for consulting. To build a complete rental platform that engages with customers in every step of their journey, we had to choose between two options: either build a platform in-house or adopt a cloud-based platform. We chose Adobe Experience Cloud on the grounds that cloud-based solutions fit best because of the flexibility, scalability and tight integration with other solutions.”
According to the Nielson 2018 CMO Report, 79 per cent of CMOs say it is difficult to comprehend the integrated effect of investments covering both online and offline channels. They say they plan to increase investment in attribution analytics tools as a solution.
Successful marketing starts from an in-depth understanding of customers. Understanding the entire customer journey requires the right technology, talents and skills. With these, companies can provide an exceptional customer experience, which can in turn lead to business growth and value creation. In this age of uncertainty, it is time to make a bold leap to find effective solutions ahead of your competitors.
Topics: Digital Transformation