The next multibillion dollar software market is coming from an unlikely place – marketing. Technology and software spending by chief marketing officers will grow to $120 billion in the next 10 years, up from the current level of $12 billion, according to venture capitalist Ashu Garg.
In a recent white paper, “MarTech and the Decade of the CMO,” Garg, a partner at Foundation Capital, projects that spending on technology will climb from 1% of current budgets to 10% in a decade’s time.
“This is unprecedented growth in any software category I’ve ever come across,” Garg told CIO. “There’s a fundamental shift, an irreversible trend, of consumers living in a digital world” that’s driving the demand for new tools.
IDC agrees, predicting that CMOs will increase spending to $32.4 billion in 2018 from $20.2 billion today, according to the 2015 Marketing Technology Map. That’s billions of dollars pouring into tools that will analyze and manage content, data and other metrics.
But despite their rising influence, marketers still have to show returns on their investments. That means effectively reaching their target audiences through appropriate channels and leading them down the sales funnel.
Almost half of marketers are already seeing ROI, while another 15% expect to show returns in 2015. This may prove that early investments are paying off, but smart marketers are constantly looking for the next way to reach their target audience.
Many believe that the mobile revolution has arrived. Half of all Americans now own a smartphone, and that’s expected to increase, according to Omnicom’s 2014 U.S. Media Trends report. Tablet usage is also increasing, especially amongst children, as prices fall.
In turn, companies are spending more to reach them on their mobile devices, with ad spend expected to triple by 2018 the report said.
Marketers will also have to determine a way to take all that consumer data, distill it and deliver content that’s personally relevant to the device of choice- whether a smartphone or a tablet. And, as we reported in November, many will allocate some of their spend to getting a better handle on Big Data.
More cooperation across company divisions will be needed as IT grows increasingly important to how CMOs do their jobs. IT can help you pick the right applications to accomplish goals, evaluate the best ways to implement systems, and ensure seamless integration.
The takeaway: Smart marketers will work with their IT colleagues to find the best ways to use their budgets. With competing priorities, cross-division cooperation is more important than ever and ensures the best use of company resources.