Virtually 60% of executives count on Advertising and marketing Tech finances cuts within the coming months
Nearly 60% of executives say they expect moderate or severe cuts in marketing tech budgets in the coming months as the belt tightening pandemic prompts executives to look into the effectiveness of such tools, so a new report from the research company Gartner.
While previous Gartner research had shown that mar tech was one of the few investment areas relatively unscathed from the first round of Covid-19 marketing spending cuts, the new survey found that executives are still struggling to get the most out of them get out tech stacks.
Marketers say they only use about 58% of the capabilities of these tools on average, a figure that has remained unchanged since 2019. About 35% of the 387 Mar-Tech executives surveyed for the report said they had already taken steps to overhaul their stacks. About 66% had delayed at least one previously approved purchase in the room because of upcoming cuts.
While the pandemic-triggered recession is the direct impetus for the cuts, experts expected some billing for the room even before Covid-19, according to Gartner analyst Ben Bloom, as spending on areas such as personalization increased, the ROI numbers However not. It always seems to justify the growth.
"The significant allocation of resources to marketing technologies over the past few years has come at risk of making quite a large investment, but achieving ROI is challenging," said Bloom. "We have seen challenges with this overinvestment, but it really is a significant relief now."
Gartner predicted last fall that about 80% of marketers who have invested in personalization will give up these efforts by 2025 due to a lack of ROI, the risks associated with customer data management, or both. That report recommended that brands instead use technologies like AI and biometrics to find general behavioral insights instead of personal information.
“[Downsizing] could take the form of asking providers to ease contractual payment plans. It could be about getting the number of licenses right, or something like that. Or it could delay buying technology that IT teams really wanted, ”said Bloom. "These types of challenges could definitely impact marketing plans and the ability to improve the customer experience."
For marketers who want to ensure they are running the tightest Mar-Tech operation possible, Gartner's report recommends performing regular audits of the tech stack, developing a vendor selection strategy, and referring to in-house talent and training focus.
"Regular audits can help teams discover some of the technologies that may be lurking there that are underutilized," said Bloom. "And we also think teams really need to think about the components of talent and training that can encourage greater collaboration with other parts of the company."