New research also reveals companies rely too heavily on gut instinct versus data when making budget decisions … ultimately at the expense of the customer experience
INDIANAPOLIS, September 30, 2014 — Businesses today have such a remarkable array of marketing technology at their disposal that it’s a challenge to prioritize and invest accordingly — especially for organizations and marketing departments trying to become more customer-centric and digitally focused.
To better understand the nature of this challenge, Teradata (NYSE: TDC), the analytic data platforms, marketing applications and services company, surveyed more than 400 digital marketing leaders at large global enterprises about trends in the marketplace and their strategic priorities around technology investment as they prepare for 2015 and beyond.
Teradata’s report, “Enterprise Priorities in Digital Marketing,” is available now and is based on a global survey conducted in July by Econsultancy US, the publisher and research firm. Among the insights uncovered:
• The debate about how to approach the modern consumer is over. The largest marketing organizations in the world have concluded that enhancing customer relationships via multiple digital channels best supports sustainable growth and reliable retention. This focus on thoroughly understanding the customer through data, and acting on insights found in data to design interactions, is driving an unprecedented demand for technology. Nearly two-thirds (62 percent) of respondents view improving customer satisfaction as the top reason to invest more in technology. Becoming more customer-centric is a top-two priority for 49% of respondent organizations.
• Customer data provides key insights about behavior and preference, yet data integration and access remain a challenge. Marketers must align an array of capabilities to capture and manage customer data. A key challenge is making technology and data work together at scale and across corporate functions. Nearly 50 percent of organizations cite full integration with other technologies as their top criterion for new technology adoption,
• High priorities for personalization and customer-centricity are driving technology investments. 32 percent of enterprises consider personalization a top priority, although fewer than 20 percent are executing on it real-time in day-to-day business. Still, 47 percent acknowledge that improving the customer experience is the top benefit of personalization programs.
• Although enterprises are pursuing a data-driven marketing model, budgets are still heavily steered by past experience. While respondents cite hard evidence and experimentation as the largest factors in determining other elements of strategic direction, experience plays a larger role than data when it comes to budget decisions. This begs the question of business leaders: Is your marketing organization really data-driven?
Decisions about marketing investment should be more data-driven, yet many companies still allocate budget
based on past experience, which today is no longer the smartest path.
A Look Ahead
Teradata’s research also looked at the role that data-driven decisions and investments in digital marketing play in improving customer engagement and building long-term relationships. Investments are trending upward for marketing and advertising as one looks into 2015, but the biggest emphasis will continue to be on digital, and toward personalization. By 2019, the average investment in digital marketing will be approximately 40 percent of companies’ total marketing expenditure, up from about 25 percent today.
• For 2015 digital marketing budgets will increase in mobile, content and display advertising. Mobile will continue to be an area of emphasis, with 34 percent of marketing leaders saying they plan a significant increase for 2015. Content marketing and display advertising round out the top three planned areas of increase. At the other end of the spectrum, paid search budgets will continue growing but incrementally, with 37 percent planning some increase, but only 14 percent predicting a significant one.
• Capabilities that will get the most attention in coming years are segment-level and real-time personalization. Both are priorities, and immediate beneficiaries of the data and application integration efforts that are under way at so many organizations. More than half (51 percent) of companies are focused on personalizing the customer lifecycle (e.g., key phases of the purchase process), while only 14% report doing no personalization whatsoever.
• Companies expect their digital investment to reach 40-50 percent of their marketing budget by 2019. Digital advertising at 17 percent is on average the largest single channel budget, followed closely by search (16 percent) and content (15 percent). Digital advertising also has the largest variation in spending.
“Strategic direction is only as powerful as the investment that supports it,” said Darryl McDonald, president, Teradata Marketing Applications. “We’ve been talking about personalization for years. Now, through digital marketing, custom analytics and marketing as a service the appetite is real, and true personalization is the future. Only a customer-centric strategy that combines technology and data can deliver sustainable opportunities for businesses to drive top-line growth through continuously more personalized data-driven marketing strategies.”
About the Report
As a global leader in integrated marketing applications, Teradata is always asking questions about how marketing needs to change, and today the focus is squarely on rapid adoption of digital or data-driven marketing.
Data-driven marketing is the strategy of connecting large amounts of online data with traditional offline data, rapidly analyzing it and gaining cross-channel insights about customers. Using integrated communication tools, those insights are brought to market via highly personalized interactions tailored to the customer at their point of need and in real-time.
Teradata partnered with Econsultancy to explore what challenges today’s marketers face in making decisions about technology investment for customer-focused, data-driven marketing strategies. “Enterprise Priorities In Digital Marketing: Exploring the investment in technology and marketing for a customer-centric future,” is based on a survey of 402 senior marketers from global organizations. All respondents are with companies having more than $500 million in revenue, with 56% having revenues over $3 billion. Respondents were from a wide variety of countries and industries, with an emphasis on automotive, consumer goods, consumer technology, retail and travel/hospitality.
Global Virtual Event October 8
Marketing + Data: Create a Meaningful Relationship With Your Customers
On October 8th, Teradata Marketing Applications will host a global virtual event at which marketers can learn how to create the perfect match of marketing technology and data to develop deeper and more informed customer relationships. Among the featured speakers will be a representative from Econsultancy, who will provide further insights about Teradata’s “Enterprise Priorities in Digital Marketing” report. There is no charge to attend. Click here to register and learn more.
• 2013 Teradata Data-Driven Marketing Survey, Global
• Teradata & Forbes Insights 2014 Survey: Business Impact of Marketing Silos
• Book: “Big Data Marketing: Engage Your Customers More Effectively and Drive Value,” by Teradata Marketing Applications CMO Lisa Arthur (Wiley, 2013)
Econsultancy’s mission is to help its customers achieve excellence in digital business, marketing and ecommerce through research, training and events. Founded in 1999, Econsultancy is used by more than 600,000 professionals every month, and has offices in New York, London and Singapore.
Teradata (NYSE: TDC) helps companies get more value from data than any other company. Teradata’s leading portfolio of big data analytic solutions, integrated marketing applications, and team of experts can help organizations gain a sustainable competitive advantage with data. Visit Teradata.com