Martech Adoption Benchmark Report

1. Martech Adoption Benchmark Report MARTECH ADOPTION Benchmark Study Report January 2018 where roi comes from and who’s getting it

2. Table of Contents 36 35 33 31 26 18 14 9 7 5 3Introduction Executive Summary The Personas MarTech Stacks Budgeting for MarTech Acquiring/Building the MarTech Stack Skills, Metrics and Satisfaction MarTech Challenges Analyst Bottom Line Acknowledgements Appendix: Survey Background Table of Contents 36 35 33 31 26 18 14 9 7 5 3Introduction Executive Summary The Personas MarTech Stacks Budgeting for MarTech Acquiring/Building the MarTech Stack Skills, Metrics and Satisfaction MarTech Challenges Analyst Bottom Line Acknowledgements Appendix: Survey Background

3. Introduction

4. martech adoption: Where ROI Comes from and Who’s Getting It 4INTRODUCTION In the early 1960s, Everett Rogers popularized the Diffusion of Innova- tions theory to explain how organizations adopt technology. This theory introduced the business world to five personas that describe different attitudes toward technology adoption: Innovator, Early Adopter, Early Majority, Late Majority, and Laggard. Innovators are those organizations that first adopt new technology so that they can gain the advantages it might provide before anyone else does. In doing so, they accept the greatest amount of risk, because they are blazing the adoption trail that may or may not lead to a reward. At the other end of the spectrum, the Laggards assume almost no risk because they are the last to adopt, but they are also the last to experience the advantages technology offers. Technology began entering the domain of marketing decades ago, and it is now considered indispensable to marketing’s success. But even so, not all marketers have rushed to embrace marketing technology (martech) as they consider where the “sweet spot” is on the technology adoption curve. Which persona is winning? “Winning” has several possible mean- ings, but in this study the scorecard is martech return on investment (ROI). MRP and Demand Metric partnered to field research to find out how these personas adopt martech differently and how their posture toward martech adoption impacts their ROI. The benchmarking infor- mation this study provides can help marketers build a best practice blue- print for acquiring, adopting, and maximizing the ROI on martech. Innovators Early Adopters Late Majority Early Majority Laggards Diffusion of Innovations martech adoption: Where ROI Comes from and Who’s Getting It 4INTRODUCTION In the early 1960s, Everett Rogers popularized the Diffusion of Innova- tions theory to explain how organizations adopt technology. This theory introduced the business world to five personas that describe different attitudes toward technology adoption: Innovator, Early Adopter, Early Majority, Late Majority, and Laggard. Innovators are those organizations that first adopt new technology so that they can gain the advantages it might provide before anyone else does. In doing so, they accept the greatest amount of risk, because they are blazing the adoption trail that may or may not lead to a reward. At the other end of the spectrum, the Laggards assume almost no risk because they are the last to adopt, but they are also the last to experience the advantages technology offers. Technology began entering the domain of marketing decades ago, and it is now considered indispensable to marketing’s success. But even so, not all marketers have rushed to embrace marketing technology (martech) as they consider where the “sweet spot” is on the technology adoption curve. Which persona is winning? “Winning” has several possible mean- ings, but in this study the scorecard is martech return on investment (ROI). MRP and Demand Metric partnered to field research to find out how these personas adopt martech differently and how their posture toward martech adoption impacts their ROI. The benchmarking infor- mation this study provides can help marketers build a best practice blue- print for acquiring, adopting, and maximizing the ROI on martech. Innovators Early Adopters Late Majority Early Majority Laggards Diffusion of Innovations

5. Executive Summary

6. martech adoption: Where ROI Comes from and Who’s Getting It 6EXECUTIVE SUMMARY More than 80 percent of this study’s participants were from primarily B-to-B or mixed B-to-B/B-to-C organizations, with just over half reporting revenue growth during the past fiscal year. The respondents are from a diverse set of industries, with the largest segment coming from the tech- nology sector and a sizeable segment from manufacturing. These study participants are estimated to have an average of 7 to 9 martech solutions in their stack, and in the past year implemented about two new martech solutions. Just over 40 percent of the study participants come from companies with less than $10 million in annual revenue, while 15 percent are with firms reporting revenues of $500 million or more. Key Findings Marketing organizations that position themselves near the front of the technology adoption cycle are getting better returns on their martech investments. The presence of Customer Experience/VoC, ABM, Sales Enablement, Content Marketing, Marketing Analytics, and Predictive Analytics solutions in the martech stack are associ- ated with the highest returns. The Innovator persona leads all others in the usage of martech, with one-fourth using 10 or more solutions. Innovators are least likely to report a shrinking martech budget. Three-fourths of Innovators report adequate or ample martech funding, compared to only 15 percent of Laggards. The top three martech solutions that companies in this study plan to invest in are ABM, Marketing Automation, and Predic- tive Analytics. Innovators are the only persona who favor a best-of-breed approach to acquiring martech. Best-of-breed and single-vendor approaches to acquiring martech provided the best return for study participants. Organizations that invest in the skills needed to exploit their martech are eight times more likely to get good or very good ROI as a result. Of the study participants that are not using metrics to track and measure their martech success, only 15 percent report good or very good ROI. Innovators are most satisfied with their martech stacks (77 percent satisfied), while Laggards are least satisfied (56 percent satisfied). This report details the results and insights from the analysis of the study data. For more detail on the survey participants, please refer to the Appendix. martech adoption: Where ROI Comes from and Who’s Getting It 6EXECUTIVE SUMMARY More than 80 percent of this study’s participants were from primarily B-to-B or mixed B-to-B/B-to-C organizations, with just over half reporting revenue growth during the past fiscal year. The respondents are from a diverse set of industries, with the largest segment coming from the tech- nology sector and a sizeable segment from manufacturing. These study participants are estimated to have an average of 7 to 9 martech solutions in their stack, and in the past year implemented about two new martech solutions. Just over 40 percent of the study participants come from companies with less than $10 million in annual revenue, while 15 percent are with firms reporting revenues of $500 million or more. Key Findings Marketing organizations that position themselves near the front of the technology adoption cycle are getting better returns on their martech investments. The presence of Customer Experience/VoC, ABM, Sales Enablement, Content Marketing, Marketing Analytics, and Predictive Analytics solutions in the martech stack are associ- ated with the highest returns. The Innovator persona leads all others in the usage of martech, with one-fourth using 10 or more solutions. Innovators are least likely to report a shrinking martech budget. Three-fourths of Innovators report adequate or ample martech funding, compared to only 15 percent of Laggards. The top three martech solutions that companies in this study plan to invest in are ABM, Marketing Automation, and Predic- tive Analytics. Innovators are the only persona who favor a best-of-breed approach to acquiring martech. Best-of-breed and single-vendor approaches to acquiring martech provided the best return for study participants. Organizations that invest in the skills needed to exploit their martech are eight times more likely to get good or very good ROI as a result. Of the study participants that are not using metrics to track and measure their martech success, only 15 percent report good or very good ROI. Innovators are most satisfied with their martech stacks (77 percent satisfied), while Laggards are least satisfied (56 percent satisfied). This report details the results and insights from the analysis of the study data. For more detail on the survey participants, please refer to the Appendix.

7. The Personas

8. martech adoption: Where ROI Comes from and Who’s Getting It 8The Personas This Study`s DistributionDiffusion of Innovations Curve The distribution of technology adoption personas comparison figure 1 Innovators Early Majority 10.5% 16.2% 16% 13.5% 16.2%2.5% LaggardsLate Majority Early Adopters 34% 34% 30%27.1% Figure 1 shows the distribution of these personas from this study, with the actual percentages from the Diffusion of Innovations theory shown for comparison. Which persona an organization has for adopting technology is a function of leadership and culture. In an organization that feels a need to take on a different persona for technology adoption, the change will come about through leadership creating a different culture. Cultural shifts toward the Innovator end of the spectrum are almost always intentional, while those toward the Laggard end are usually the unintended consequence of other forces and factors. These personas will serve as segments for reporting differences in how martech is funded, adopted, and used. Study participants selected the persona they identified with most closely concerning the adoption of marketing technology from among these options: Innovators: the first to adopt a technology. Early Adopters: among the first to adopt a technology. Late Majority: In the second half of users to adopt a technology, but not the last. Early Majority: in the first half of users to adopt a technology, but not among the first. Laggards: the last to adopt a technology. martech adoption: Where ROI Comes from and Who’s Getting It 8The Personas This Study`s DistributionDiffusion of Innovations Curve The distribution of technology adoption personas comparison figure 1 Innovators Early Majority 10.5% 16.2% 16% 13.5% 16.2%2.5% LaggardsLate Majority Early Adopters 34% 34% 30%27.1% Figure 1 shows the distribution of these personas from this study, with the actual percentages from the Diffusion of Innovations theory shown for comparison. Which persona an organization has for adopting technology is a function of leadership and culture. In an organization that feels a need to take on a different persona for technology adoption, the change will come about through leadership creating a different culture. Cultural shifts toward the Innovator end of the spectrum are almost always intentional, while those toward the Laggard end are usually the unintended consequence of other forces and factors. These personas will serve as segments for reporting differences in how martech is funded, adopted, and used. Study participants selected the persona they identified with most closely concerning the adoption of marketing technology from among these options: Innovators: the first to adopt a technology. Early Adopters: among the first to adopt a technology. Late Majority: In the second half of users to adopt a technology, but not the last. Early Majority: in the first half of users to adopt a technology, but not among the first. Laggards: the last to adopt a technology.

9. MarTech Stacks

10. . martech adoption: Where ROI Comes from and Who’s Getting It 10MARTECH STACKS The study inventoried some major categories of martech solutions in use by participants. Figure 2 shows the overall, current martech usage for all companies in the study. 40% Respondents are currently using Marketing Automation. The current, overall martech stack for all personas in the study. Overall Martech Usage figure 2 Marketing Automation 40% CRM 60% ABM 18% Mobile Marketing 28% CX/VoC 26% Personalization/Chat 26% Social Media Listening/Engagement 57% Sales Enablement 35% Content Marketing 52% Marketing Analytics 54% 15%Predictive Analytics 41%Video Marketing Fewer than one in five of respondents are currently using Account-Based Marketing or Predictive Analytics. The top three solutions in the martech stack for companies in this study are: Customer Relationship Management (CRM) Social Media Listening/Engagement Marketing Analytics 1 2 3 Respondents are currently using CRM. 60%

11. . martech adoption: Where ROI Comes from and Who’s Getting It 11 Innovators have marketing analytics as the top solution in use in this study, revealing the data-driven nature of how they market. It is worth noting that the Early Majority persona reported higher usage for marketing analytics, at 65 percent, and Early Adopters are nearly at the same level of usage as Innovators. More than half of the companies that fall into these three personas are using data in some fashion to influence marketing decisions and measure results. For all personas except Innovators, content marketing is a top-three martech solution. The Innovators seem to have put a focus on two specific content types/channels: mobile and video. Marketing organi- zations usually have some expectation about what they will get in the way of a return from their martech investments. Figure 3 summarizes the percentage rating the return on the overall martech investment as “Good” or “Very good” by persona. MARTECH STACKS Personas that are earlier in the martech adoption cycle report the best return. Return on Martech is Good or Very Good figure 3 Innovators 56% 55%Early Majority 57%Early Adopters Late Majority 34% Laggards 36% 57% Early Adopters reported good or very good return on investment. Laggards reported good or very good return on investment. 36%

12. . martech adoption: Where ROI Comes from and Who’s Getting It 12 It’s clear that being earlier in the martech adoption cycle provides better returns on investment. Those who are Late Majority or Laggards expe- rience a sharp falloff in reporting good ROI. In fact, almost one-fourth (22 percent) of the Laggards report “Poor” or Very poor” returns on martech investments. This ROI from Figure 3 will serve as a useful metric to compare correlated attributes of martech usage later in this report. The presence or absence of the various solutions shown in Figure 2 has an impact on the return study participants are getting from their martech investment. Figure 4 shows the difference in the percentage of partici- pants that report a “Good” or “Very Good” martech return based when the individual solutions are and are not in the martech stack. Marketing Automation CX/VoC CRMSocial Media Listening/ Engagement Content Marketing Sales Enablement ABMMarketing Analytics Mobile Marketing Predictive Analytics Video Marketing Impact on ROI of Having Martech Solutions in the Stack figure 4 60% 60% 61% 61%63% 63%64%55% 55% 56% 34%36% 36%38% 8% 8% 25% 23%28%28% 30% 51% 50% 19% Perso- nalization/Chat Not in the Stack In the Stack MARTECH STACKS The absence of even a single martech solution from the stack can significantly affect the return on the overall martech investment. Return on Martech is Good or Very Good Figure 4 reveals the holistic nature of the martech stack. Even though composed of distinct solutions, once they are added to the martech stack, a symbiotic relationship emerges, where the value of the whole stack is greater than the sum of its individual parts. Even so, some individual solutions have a bigger impact through their presence or absence than others. Respondents report a good or very good ROI when Marketing Analytics are in the stack.60%

13. . martech adoption: Where ROI Comes from and Who’s Getting It 13 The absence of the content marketing, marketing analytics, and sales enablement solutions create the largest overall martech ROI gap. The presence in the stack of Customer Experience/VoC, ABM, Sales Enablement, Content Marketing, Marketing Analytics and Predictive Analytics solutions are associated with the highest return. To complete this overview of martech stacks, the number of solutions in use by persona is presented in Figure 5. Innovators do lead in martech usage, with one-fourth using 10 or more martech solutions, more than twice the usage level of all other personas except the Early Adopters. No Martech in UseLess than 10 Martech Solutions in Use10 or More Martech Solutions in Use 0% 0% 0% 2% 3% Innovators have more martech in use than the other personas. Number of Martech Solutions in Use by Persona figure 5 Innovators Early Adopters Early Majority Late Majority Laggards 75% 83% 84%90% 89% 25% 17% 10% 13%9% MARTECH STACKS

14. . Budgeting for MarTech

15. . martech adoption: Where ROI Comes from and Who’s Getting It 15 The way organizations budget for things can reveal priorities. It’s natural to assume that Innovators, because they are the first to adopt tech- nology, fund martech at the highest level. Figure 6 shows the year-to- year martech budget change by persona. Innovators, Early Adopters, Early Majority, and Late Majority have very similar year-to-year martech budget growth. Most noticeably, Innovators are least likely to report a shrinking martech budget, while not surpris- ingly, Laggards are most likely to report that. BUDGETING FOR MARTECH Remained Flat ShrankGrew Only Laggards deviate significantly from the martech funding growth pattern. Marketing Technology Budget Changes Year-to-Year figure 6 Innovators Early Adopters Early Majority Late Majority Laggards 50% 51% 32%53%56% 15% 15%10% 11% 27% 41%40% 29% 36% 34% Laggards reported a reduction in martech budget over the year. Innovators reported a reduction in martech budget over the year. 10% 27%

16. . martech adoption: Where ROI Comes from and Who’s Getting It 16 Some percentage of all personas showed martech budget growth, and study participants were asked to identify the reasons why. Table 1 summarizes the top reason given by persona. Increased executive support for marketing is a common thread running through all but one of these personas. The differences worth noting are at the opposite ends of the adoption spectrum. For Innovators, a top reason is marketing is getting better at producing measurable results. For Laggards, a top reason is increased costs of martech. These reasons represent very different spending rationales. With Innovators, the business case for martech is easier to justify: they are producing measurable results and thus are able to prove their contribution to the revenue pipeline. In their case, the budget increases are coming because they want to spend more on martech. They hold the view that martech is an investment. Not so with Laggards, who cite increased costs of marketing technology as a top reason for increased martech spending. This reason is, in effect, a declaration that they have to spend more. They don’t necessarily want to spend more, but they feel they have no choice, holding the view that martech is an expense rather than a competitive lever. Increased executive support is a reason common to almost all personas. table 1 BUDGETING FOR MARTECH Persona Top Reason for Martech Budget Growth Innovator Increased executive support for marketing and Marketing is better at delivering measurable results (Tie). Early Adopters Increased Sales. Early Majority Increased executive support for marketing. Late Majority Increased executive support for marketing. Laggards Increased executive support for marketing and Increased costs of marketing technology (Tie).

17. . martech adoption: Where ROI Comes from and Who’s Getting It 17 Study participants were asked to rate the adequacy of their martech budgets to determine the percentage of each persona that felt like the martech budget was adequate, enough for everything needed, or ample, enough for everything needed and some things that are wanted. Figure 7 shows the results of this rating. The difference that Figure 7 shows is dramatic, with almost three-fourths of Innovators expressing that martech funding is adequate or ample, while only 15 percent of Laggards feel that way, a difference of 57 percentage points from one end of this spectrum to the other. This difference amplified further when looking at the data about martech budget allocations. Figure 8 shows the average percentage of the total marketing budget that goes toward acquiring and operating the organi- zation’s marketing technology. The way an organization spends money reflects its priorities, and Inno- vators, with almost twice the budget allocation, clearly prioritize martech much higher than Laggards. BUDGETING FOR MARTECH Perception of the adequacy of martech budgets, by persona. The percent of the total marketing budget allocated to acquiring/ operating martech. Martech Budget is Adequate or Ample Martech Budget Allocation figure 7 figure 8 Innovators Innovators Early Adopters Early Adopters 15% 16% Early Majority Early Majority 59% 26% 50% 20% 45% 20% Late Majority Late Majority Laggards Laggards 72% 28%

18. . 18THE STATE OF ASSOCIATION MARKETING | [OVERALL SECTION][CURRENT SECTION] Acquiring/Building the MarTech Stack

19. . martech adoption: Where ROI Comes from and Who’s Getting It 19ACQUIRING/BUILDING THE MARTECH STACK The survey asked participants to identify which martech solutions are either under evaluation or already budgeted. This data, summarized in Figure 9 for all personas, is an indicator of investment priorities and acquisition plans. Account-Based Marketing (ABM) Marketing Automation Predictive Analytics The current, martech investment plans for all personas in the study. Overall Martech Budgeted & Evaluating - All Personas figure 9 CRM 14% Content Marketing 14% Marketing Analytics 13% Social Media Listening/Engagement 12% Mobile Marketing 22% CX/VoC 22% Personalization/Chat 20% Sales Enablement 20% Marketing Automation 24% ABM 25% 23%Predictive Analytics 18%Video Marketing The top three martech solutions in which companies in this study plan to invest are: 1 3 2 25% Respondents plan to invest in ABM. Respondents plan to invest in Sales Enablement. 20%

20. . martech adoption: Where ROI Comes from and Who’s Getting It 20 Figure 10 displays martech investment plans segmented by persona. Marketing Automation CX/VoCCRM Social Media Listening/ Engagement Content Marketing Sales Enablement ABM Marketing Analytics Mobile Marketing Predictive Analytics Video Marketing The areas of planned martech investment by persona Martech Investment Plans by Persona figure 10 33% 35% 16% 16% 17%17% 17% 13% 13% 13% 13% 13% 13% 11% 11% 7% 8% 8% 7% 7% 7% 7% 4% 14% 14% 15% 15% 26%26% 26% 26% 25% 26% 27% 27%27% 27% 27% 29% 30% 31% 22% 23% 23% 23% 24% 22% 22% 22% 18% 18% 18% 20% 20% 20% 20% 20%20% 19% Perso- nalization/ Chat 0% The Innovators and Early Adopters are planning the biggest investment in nine of the 12 martech categories shown in Figure 10. ACQUIRING/BUILDING THE MARTECH STACK Early Majority Late Majority LaggardsEarly AdoptersInnovators

21. . martech adoption: Where ROI Comes from and Who’s Getting It 21 Understanding the motivations that drive martech acquisitions was one goal of this research, and the top drivers for each persona are summa- rized in Table 3. The data in Table 3 was collected by presenting study participants with a list of common motivations, and the results give insight into the different cultures within Innovators and Laggards. For example, one choice on the study survey, “To have greater control over our IT destiny,” ranked last for every persona and clearly was not a key motivator. Top Motivation for Martech Acquisition table 3 Top motivation driving martech acquisition. Acquiring/Building the Martech Stack Top three martech solutions by persona table 2 Only Laggards deviate significantly from the martech funding growth pattern. Persona Top Motivation for Martech Acquisition Innovator To gain a competitive advantage (69%) Early Adopters To drive more revenue (57%) Early Majority To drive more revenue (80%) Late Majority To drive more revenue (65%) Laggards To boost productivity (63%) Persona Top Three Planned Martech Investments Innovator 1. ABM (33 percent) 2. Personalization/chat, Sales enablement and Predictive analytics (Tied at 27 percent) Early Adopters 1. ABM (35 percent) 2. Predictive analytics (31 percent) 3. CRM, Mobile Marketing and Customer Experience (Tied at 26 percent) Early Majority 1. Marketing automation (30 percent) 2. Customer experience/VoC (27 percent) 3. Predictive analytics (24 percent) Late Majority 1. Mobile marketing (29 percent) 2. Marketing automation (25 percent) 3. Personalization/chat (23 percent) Laggards 1. Sales enablement and Content marketing (Tied at 26 percent) 2. Marketing automation and Marketing analytics (Tied at 23 percent)

22. . martech adoption: Where ROI Comes from and Who’s Getting It 22 There are distinct patterns associated with acquiring and building the martech stack. One approach is to research and acquire best-of-breed solutions (leading software in a specific martech category), regardless of the cost. The result is typically a martech stack consisting of solutions from multiple vendors. Another approach is to select the most affordable solu- tions; that also often results in a stack with solutions from multiple vendors. A third approach is to choose a single vendor that can provide the critical solutions for the stack. Finally, combinations of any of these approaches are also ways that companies build their martech stacks. Figure 11 shows the prevalence of these approaches. Figure 11, perhaps more than any other data from this research, shows the stark difference between how these personas acquire and build their martech stacks. Innovators are the only persona for which a majority deliberately acquire best-of-breed solutions. Early Adopters are more likely to use this same approach, but almost one-third select the most affordable solutions. Of the remaining personas, all of them choose the most affordable solutions. This data requires thoughtful interpretation. Acquiring affordable solu- tions is not a poor business choice. The real difference between the top two approaches shown in Figure 11 – best-of-breed and affordable – is the primary decision driver. Innovators that choose best-of-breed solu- tions are remaining consistent with the primary driver for martech acqui- sition as summarized in Table 2: to gain a competitive advantage. The best solutions, therefore, are sought out to gain the best possible advan- tage, and cost is rarely a factor as long as the advantages exist. There is a clear shift of approaches from Innovators to Laggards. Approach to Building the Martech Stack figure 11 Best-of-BreedSingle Vendor Most Affordable Other/Combination Innovators 10% 8% 8% 13% 13% 3% 3% Early Adopters Late Majority 22% 25% 20% Laggards 0% 0% 0% Early Majority 55% 48% 37% 32% 67% 62% 74% Acquiring/Building the Martech Stack

23. . martech adoption: Where ROI Comes from and Who’s Getting It 23 Early Adopters straddle the fence on these two approaches. The data suggests that this persona looks for the best-of-breed martech solutions, but not at any cost. Affordability is a factor in their acquisitions, but ties go to best-of-breed solutions. For the remaining personas, affordability is the primary driver in martech acquisitions. Sometimes the most affordable solutions also deliver the best set of benefits, but not always. These approaches to building the martech stack correlate to the return on investment shown in Figure 3. Figure 12 displays the percentage of study participants that reported a “Good” or “Very good” return, segmented by the approaches shown in Figure 11. If maximizing the return on martech investments is a high priority, this research shows the best path to achieving that: building the martech stack using a single-vendor or best-of-breed approach. Members of the Late Majority and the Laggards in this study favor the most affordable approach to building their martech stacks, and they are reporting the lowest return as one result of that approach. The single-vendor and best-of-breed approaches deliver about the same ROI. Return on Martech is Good or Very Good Acquiring/Building the Martech Stack ROI of Martech Stack-Building Approaches figure 12 Single Vendor Best-of-Breed 29% Most Affordable 60% 58% 37% Other/Combination 58% Respondents reported a good or very good return in a best-of-breed stack. Respondents reported a good or very good return in a single vendor stack. 60%

24. . martech adoption: Where ROI Comes from and Who’s Getting It 24 Who within an organization gets involved in identifying potential martech solutions can signal important aspects of culture that go well beyond acquiring and using solutions in the stack. Figure 13 shows the differences between personas in the casts of players that are involved in identifying solutions. It may seem counterintuitive that Innovators have the lowest involvement in members of the marketing team identifying potential martech solutions. The statistic from Figure 13 that speaks volumes is the involvement of the sales team. For Innovators, compared to all other personas, sales team involve- ment is relatively high, almost twice the level of the next-closest persona. This level of involvement implies better marketing-sales team alignment, a characteristic that is crucial to revenue goal achievement. Innovators have the lowest percentage of marketers involved in identifying martech solutions. Who`s Involved in Identifying Potential Martech Solutions figure 13 Marketing 7% 7% 7% 9% 10% 11% 11%12% 16% 16% 16% C-Suite OtherIT 47% Sales 21% 22%50% Finance 78% 65% 64% 3% 3% 3% 3% 0% 0% 0% 6% 5% 4%2% 2% Acquiring/Building the Martech Stack Early Majority Late Majority LaggardsEarly AdoptersInnovators 47% Innovator’s marketing teams identify potential martech solutions. Early Majority’s marketing teams identify potential martech solutions. 78%

25. . martech adoption: Where ROI Comes from and Who’s Getting It 25 Figure 14 shows, by persona, who is involved in preparing the business case for martech acquisitions. Innovators again show the lowest percentage of marketers involved in a key aspect of acquiring martech. The reason has nothing to do with marketing’s lack of interest in the martech that is essential to its work. Instead, Figure 14 shows why: Inno- vators have far more involvement from the finance team in preparing the business case. As with Figure 13, the data here paint a picture of an organization that is remarkably silo-free, with the highest levels of inter-departmental coop- eration in a way that lets each department play to its strengths while working together. It’s far too common that friction exists between marketing and finance, but that is not the norm for Innovators. Instead, Figure 14 paints a picture of cooperation at level seven to 10 times greater than for the other personas. Innovators also have the lowest percentage of marketers involved in preparing the business case for martech solutions. Who`s Involved in Preparing the Business Case for Martech Solutions figure 14 Marketing 7%7% 10% 10% 9% 11% 12% 13% 13% 17% 16% C-Suite OtherITSales 21%53% 54% Finance 76% 73% 57% 3% 3% 3%3% 3%0% 0% 6% 4% 4% 5% 5% 2% Acquiring/Building the Martech Stack Early Majority Late Majority LaggardsEarly AdoptersInnovators

26. . Skills, Metrics and Satisfaction

27. . martech adoption: Where ROI Comes from and Who’s Getting It 27 Having the right components in the martech stack is not the only factor that drives success and satisfaction: skills and metrics are enablers of taking full advantage of the solutions in the stack. Just over one-third of study participants on the whole reported that they have most or all of the skills they need to fully leverage their martech stacks. Figure 15 shows the skills assessment by technology adoption persona. While all of the personas register some skills gaps, the Laggards are far behind the rest of the pack. Skills come from experience and training, and training is often viewed as a luxury by many organizations, one that is the first “expense” to cut when looking to lower costs. Failure to equip the marketing team with the skills needed to fully exploit the martech is a serious oversight because it creates a barrier to productivity and hinders efforts to realize the highest possible return on the martech investment. Figure 16 shows the relationship between skills and ROI. This connection between skills and getting a return on martech is quite intuitive. It stands to reason that if firms that purchase technology, but don’t acquire the skills to exploit it, are by default choosing to accept suboptimal results and return. What is perhaps less intuitive is just how big the gap is between having most or all of the needed skills, and having few to none of them. As Figure 16 shows, the difference is not incre- mental, but exponential. Organizations that invest in acquiring and maintaining martech skills are eight times more likely to also experi- ence good or very good ROI. Skills, Metrics and Satisfaction The connection between skills and martech ROI is very clear Return on Martech is Good or Very Good The Laggards suffer from a significant lack of skills for exploiting their martech stack. % With Most or All Skills Needed to Fully Leverage Martech figure 15 Innovators Early Adopters 13% Early Majority 41% 47% 32%Late Majority Laggards 50% Martech Skills Relationship to ROI figure 16 Have most or all of the needed skills Have some of the needed skills 10%Have few or none of the needed skills 32% 81%

28. . martech adoption: Where ROI Comes from and Who’s Getting It 28 d n Anorganization’sapproachtoselectingandusingmetricsisanotherfactor that impacts martech usage and ROI outcomes. The study measured the usage of three types of metrics that organizations frequently use to measure their martech usage success: Productivity metrics measure things such as time saved or assets created and are the least useful class of metrics when it comes to understanding marketing’s contribution to revenue. Volume metrics measure things like leads generated, pages viewed, or impressions. They are more useful than productivity metrics in understanding marketing’s contribution but still don’t directly indicate revenue impact. Financial metrics measure things like opportunities created, revenue generated, or ROI. These are direct measures of market- ing’s contribution to revenue, and therefore the most useful. They are also the most difficult to measure. Almost one-third of the Laggards are using no metrics, or only productivity metrics, which means they have no credible indicators of the revenue impact they are making with their martech. Marketing analytics propo- nents are quick to point out that a balanced portfolio of volume and financial metrics is necessary for marketing to continuously improve how it operates and prove its revenue contribution, with the emphasis on financial metrics. Innovators are doing the best job here, having the highest combined rate of using volume and financial metrics (74 percent), with financial metrics usage the higher of the two. 1 3 2 Laggards Usage of martech success metrics Primary Martech Success Metric Type figure 17 None 8% 8% 8% 8% 11% 12% OtherVolume Metrics Productivity Metrics 19% 25% 27% 29% 29% 25% 36% 32% 31% 42% Financial Metrics 51% 46% 45% 3%3% 0% 0% 0% 2% Skills, Metrics and Satisfaction Early Majority Late MajorityEarly AdoptersInnovators

29. . martech adoption: Where ROI Comes from and Who’s Getting It 29 As with martech skills, a relationship exists between metrics usage and martech ROI. Figure 18 depicts this relationship. Of the study participants that are not using any metrics to track the success of their martech usage, only 15 percent report getting a good or very good martech ROI. This finding raises the question: how can these organizations, when not using metrics, have the ability to know what their martech ROI is? At best, those not using any metrics can only estimate the return they are getting. Users of volume metrics report the highest level of ROI, a surprising outcome since the natural assumption is that financial metrics users should receive the best return on their martech investment, because of their metrics-usage maturity. Consider this: only those using financial metrics have the ability to accurately calculate their martech return. For this reason, the financial metrics ROI data shown in Figure 18 is considered the most accurate. Skills, Metrics and Satisfaction When metrics aren’t used to measure martech usage success, the chances of getting good martech ROI are very small. Return on Martech is Good or Very Good Metrics Relationship to ROI figure 18 None 15% Productivity Metrics 37% Volume Metrics 57% Financial Metrics 44% 57% Study participants have reported a good or very good return on martech using volume metrics. Study participants have reported a good or very good return on martech when no metrics are being used. 15%

30. . martech adoption: Where ROI Comes from and Who’s Getting It 30 The skills and metrics discussed in this section of the report are drivers of satisfaction. Figure 19 shows the satisfaction rating for all study partic- ipants, where the satisfaction rating is the sum of “Satisfied” and “Very Satisfied” responses for each martech solution examined in this study. Innovators on the whole are the most satisfied with their martech stacks, having an average rating across all solutions in Figure 19 of 77 percent. Laggards are the least satisfied, with an average satisfaction rating of 56 percent, more than 20 points lower than the Innovators. Standing in the way of greater satisfaction with martech are a series of challenges that study participants are experiencing, which the next section of this report will detail. Skills, Metrics and Satisfaction The analytics solutions have the highest satisfaction ratings. % Satisfied or Very Satisfied figure 19 Marketing Automation 75% Content Marketing 75% Marketing Analytics 80% CRM 74% Personalization/Chat 73% Sales Enablement 67% ABM 61% Social Media Listening/Engagement 65% Mobile Marketing 61% CX/VoC 54% 77%Predictive Analytics 65%Video Marketing Innovators are satisfied with their martech stacks. 77% 56% Laggards are satisfied with their martech stacks.

31. . MarTech Challenges

32. . martech adoption: Where ROI Comes from and Who’s Getting It 32MARTECH CHALLENGES The organizations that contributed to this research ranked the chal- lenges they experience in acquiring or using martech. Table 4 shows the top three challenges faced by each persona. The challenges that Early Adopters, Early Majority, and Late Majority expe- rience are identical, with only slight changes to the order in which they occur. All personas except Innovators cite justifying the cost of martech as one of the top challenges (for Innovators, this challenge ranks 6th). Innovators, who have acquired the skills to use their martech, have the largest budget for it, and are doing the best job delivering measurable results, seem to have little trouble justifying their martech spend. Martech Challenges table 4 Top three martech challenges by persona. Persona Top Three Martech Challenges Innovator 1. Understanding how to take full advantage of it. 2. Keeping up with the rapidly evolving technology landscape. 3. Lack of marketing resource to manage multiple marketing technologies. Early Adopters 1. Justifying the cost. 2. Lack of marketing resource to manage multiple marketing technologies. 3. Integrating the various systems that we use. Early Majority 1. Justifying the cost. 2. Lack of marketing resource to manage multiple marketing technologies. 3. Integrating the various systems that we use. Late Majority 1. Justifying the cost. 2. Integrating the various systems that we use. 3. Lack of marketing resource to manage multiple marketing technologies. Laggards 1. Lack of marketing resource to manage multiple marketing technologies. 2. Justifying the cost. 3. Getting executive support for using it. Personas cite “system integration” in their top three challenges. 60% Personas rank “justifying costs” as their biggest challenge. 60%

33. . Analyst Bottom Line

34. . martech adoption: Where ROI Comes from and Who’s Getting It 34 The data this report presents may seem to point to the Innovator persona as the most desirable one. Rather than state a conclu- sion that marketers should, based on this research, adopt a certain persona, the better advice is to look at the most desirable results and then determine which persona is most associated with those results. TheresultthisconclusionwillfocusonisROIandwhatthisresearch says about getting the best return on martech investments: Personas that are earliest in the adoption curve (Innovators, Early Adopters and Early Majority) are getting the best overall martech ROI. The presence of Customer Experience/VoC, ABM, Sales Enable- ment, Content Marketing, Marketing Analytics and Predictive Analytics solutions in the martech stack are associated with the highest returns. Building a martech stack using the single-vendor or best-of- breed approach is associated with the highest return. Organizations that ensure they have most or all of the needed skills to exploit their martech stack are most likely to report getting good or very good ROI. Study participants that are using volume and/or financial measures as primary martech success metrics are getting the best return on their martech investment. The persona that is achieving these results most consistently is the Innovator. If these results express the preferred disposition of a marketing organization, then this list of characteristics serves as a plan to make martech deliver better results: Adopt martech solutions earlier in their lifecycle. Adopt specific solutions with a known relationship to ROI. Don’t have affordability as the primary martech solution acqui- sition criteria. Make getting and maintaining skills to fully exploit martech a priority. Use the most meaningful metrics to track marketing and its martech’s success. ANALYST BOTTOM LINE Analyst Bottom Line

35. . martech adoption: Where ROI Comes from and Who’s Getting It 35ACKNOWLEDGEMENTS MRP is a global provider of marketing intelligence, software, and services. For over 13 years, clients have relied on MRP to drive pipeline and deliver the insights needed to more effectively sell to their key target markets. MRP’s Delta Marketing Cloud combines predictive intelligence with integrated marketing tactics to deliver closed-loop marketing programs generating industry leading ROI and conversion. MRP has 12 offices and covers 100 countries around the globe it is a wholly owned subsidiary of the FD Group, PLC (LSE: FDP). For more information, please visit: www.mrpfd.com Demand Metric is a marketing research and advisory firm serving a membership community of over 120,000 marketing profes- sionals and consultants in 75 countries. Offering consulting playbooks, advisory services, and 500+ premium marketing tools and templates, Demand Metric resources and expertise help the marketing community plan more efficiently and effectively, answer the difficult questions about their work with authority and conviction, and complete marketing projects more quickly and with greater confidence — thus boosting the respect of the marketing team and making it easier to justify resources the team needs to succeed. To learn more about Demand Metric, please visit www.demandmetric.com Demand Metric is grateful to MRP for sponsoring this research, and for those who took the time to complete the study survey. Acknowledgements

36. . martech adoption: Where ROI Comes from and Who’s Getting It 36 Appendix: Survey Background APPENDIX: SURVEY BACKGROUND This Marketing Technology Benchmark survey was administered online during the period of July 18, 2017, through September 20, 2017. During this period, 236 responses were collected, 218 of which were qualified and complete enough for inclusion in the analysis. This research report is based on self-reported data that we consider reli- able, but we do not represent it as accurate or complete, and it should not be relied on as such. Primarily B-to-B Mixed B-to-B/B-to-C Less than $10 million $25 to $99 million $500 to $999 million $10 to $24 million $100 to $499 million $1 billion or more Primarily B-to-C 56% 25% 19% TYPE OF ORGANIZATION Significant increase Slight decline Flat Significant decline Slight increase 19%16% 22% 9% 34% REVENUE GROWTH ENVIRONMENT IN MOST RECENT FISCAL YEAR ANNUAL SALES The representativeness of this study’s results depends on the similarity of the sample to environments in which this survey data is used for comparison or guidance. Summarized below is the basic categorization data collected about respondents to enable filtering and analysis of the data: 42% 14% 10% 14% 13% President, CEO or owner Other marketing role Other sales role Finance Other VP or Director of Sale ITCMO or VP of Marketing PRIMARY ROLE OF RESPONDENT 8% 10% 4% 5% 10% 58% 3% 2% 7%

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