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Five Ways B2B Marketing Will Change in 2017: All Roads Lead to Marketing Performance Management

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Each year, the marketing community confronts a few dominant themes. A couple of years ago, predictive analytics was all the rage. If you ask any B2B marketer what trends dominated in 2016, you'd likely hear "ABM," "one-to-one relationships," or "managing the customer journey"; marketers were investing more in an end-to-end experience, from awareness to advocacy.

However, if you were to ask any of those marketers to put aside trends and instead identify what their continual focus has been, year after year, you would hear, overwhelmingly, "revenue."

The truth is, when a CMO is preparing for the year ahead, the latest tactical trend isn't nearly as important as continually focusing on how best to optimize Marketing's contribution to revenue and business goals.

After all, regardless of the tactics they employ, CMOs are measured on their ability to drive growth for their company.

That growth is the crux of marketing performance management (MPM)—which Forrester describes as "a discipline that governs goal setting, monitoring, and continuous optimization of marketing's contribution to revenue and other priority business goals."


As we enter 2017, all roads lead to MPM; five key changes are occurring in our business environment that make MPM a greater priority than ever for B2B organizations.

1. Greater Scrutiny Over Marketing Investments

Marketing budgets are on the rise heading into 2017, up to 12% of revenue, as marketers manage more demand, Gartner has found. And "with power comes great responsibility. By taking custody of these dollars, CMOs are promising more and more back to the business," Gartner states.

Marketers must be prepared for greater scrutiny over their budgets; they must be ready and able to answer questions related to planning and returns.

For example, one of our software customers makes sure it's prepared to answer questions such as these:

  • How are you planning to deploy available budget? On what, where, and when?
  • How does what's actually occurring compare with that plan?
  • In what ways are you underfunded, and how does that compare to external benchmarks?
  • How many inquiries/leads/opportunities did your campaign tactic generate?
  • What tactics and combinations are working best?

2. Addressing the True Data Challenge: Context

Across the board, it's a challenging time to be in B2B sales or marketing. With so much competition and noise, it's harder than ever to get prospects on the phone or to respond to emails.

Yet, prospects are still buying software, proving that we are often blind as to what's working within the journeys our customers take toward a purchase. And so we struggle to understand where we should allocate more marketing dollars.

Though marketers are inundated with data (when a prospect sneezes, we know about it), the massive amounts of information collected have created a larger challenge: determining context.

Organizations often keep the world of investment data and results data separate, as they live in disparate systems (or, worse, in spreadsheets)—leading to confusion, misinformation, and guesswork.

In 2017, marketing organizations must take steps to clarify what investments lead to results—demystifying which activities are working, and helping to make better planning decisions about the touchpoints that need attention along the customer journey.

3. The Changing Role of the CMO

The tenure of a CMO continues to be tenuous. At least 30% of CEOs will fire their CMOs in 2017, according to Forrester.

In recent years, many CMOs have taken on the customer experience—an encouraging evolution that has helped Marketing drive the business's impact on the end-to-end customer lifecycle and gain respect for Marketing. But that's not enough.

The expectation today is for CMOs to prove business impact with confidence, and demonstrate stewardship over their marketing investments. (The same goes for their counterparts in Sales.) Those who are unable to do so will be out of a job; those who are able to do so will become business leaders in their company, taking on a more strategic role across the entire business (rather than a tactical marketing role).

In 2017, CMOs won't just be talking about earning a seat at the executive table. Successful CMOs will be helping to lead a groundswell of companies that realize they can't just be great product organizations—that they need to be great marketing organizations, with marketing leadership that has a strong handle on the full business.

In 2017, CMO's will understand that they can't just be great marketing leaders—that they must also be great business leaders who can truly run the business of marketing.

4. A Changing Budget

Where marketers spend their dollars year over year is a strong indication of what's driving results across the industry.

Gartner's CMO Spend Survey (which focused on large organizations) found that marketing tech comprised 33% of the marketing budget. The rest is allocated to labor (35%) and external marketing services, such as advertising, paid search, and consulting (32%).

Our own customers (together, they manage over $20B in marketing investment) provide an interesting perspective. Though for B2B marketers we also used to see a general breakdown of roughly 40% spent on people and 60% on programs and technology, the advent of more personalized tactics such as ABM are driving a more equal, 50/50 split.

Marketers are now looking at adding a different type of talent, not just more programs, because of the rise of more-targeted outreach. As the structure of our marketing organizations changes, instead of more money going to digital more is going to digital-oriented talent. That means more content marketing, more product marketing, and more targeted individualized approaches, with less broad demand generation.

5. Marketing Compensation in Alignment With Sales

Marketing is no longer an island unto itself; that's especially been the case with the rise of martech, highlighting the CMO-CIO relationship. In 2017, the relationship between the CFO and CMO will be the one that's interesting to watch.

One example of the shift is marketing compensation. There's much more incentive for the marketing organization to align with the approach of the sales organization. Just as traditional sales teams are rewarded on closing deals, in 2017 marketing accountability will be tied to the impact and results of marketing activity on business goals.

That means compensation for Marketing's ability to drive Sales-accepted leads, individual sales activity, overall bookings, and overall Sales and Marketing targets. It's truly about putting your money with your mouth is; and though it may seem unfamiliar to many organizations, it's an important evolution in building revenue-driven teams and processes.

* * *

We're entering an interesting phase in B2B marketing. Clearly, the new charter of CMOs is to run marketing like a business, making investment decisions with confidence and earning a more strategic role because of their ability to demonstrate business impact.

Are you ready?


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James Thomas is CMO of Allocadia, provider of marketing performance management software.

LinkedIn: James Thomas

Twitter: @jthomas_44

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Comments

  • by Eddy Hagen - insights4print.ceo Tue Jan 10, 2017 via web

    For those who want to include print in their marketing performance management, here is a step-by-step tutorial to connect print to digital: http://www.insights4print.ceo/2017/01/connecting-print-ads-to-digital-piece...
    Don't forget: studies have shown that we trust printed ads more than digital ads, our brain responds differently to print, print should be a part of the marketing mix. There are a number of studies listed in the tutorial.

  • by Stephanie Reyes Fri Jan 20, 2017 via web

    Interesting article! I definitely agree that things are changing in the marketing industry year after year. This five ways mentioned which are, greater scrutiny over marketing investments, context, changing role of CMO, changing budget, and marketing compensation in alignment with sales lead to making marketing performance management a top priority for B2B organizations.

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