Challenges and prospects with system support
Marketing is one of the most complex disciplines in business today. While CMOs (Chief Marketing Officers) are becoming more common in large organisations, marketing is still very much a budget-driven function in many companies. Strategic decisions that should be made within the company are often delegated to external service providers, especially agencies. As a result, the role of marketing often shifts to controlling costs rather than defining the right actions for long-term success. To be successful, however, marketing management must evolve from pure budget management to strategic control.
The hope of a few years ago: Efficiency through automation
In the 2010s, the vision of many companies was to make marketing processes more efficient through automation. The focus was on using different channels as cost-effectively as possible. However, a fundamental problem was already apparent: defining appropriate key performance indicators (KPIs) to measure marketing success proved more difficult than expected.
One company was able to quantify the costs and benefits of its print catalogue. Interestingly, the catalogue not only broke even, but was profitable. At the same time, the costs and benefits of online marketing were not nearly as well understood. This shows that while digital channels offer many opportunities, their effectiveness remains difficult to measure.
As is so often the case, automation approaches fail due to a lack of data or poor data quality.
The present: increasing fragmentation and loss of control
The number of channels and media through which companies communicate with their customers is constantly growing. Social media, online marketing, print advertising, moving images, event marketing - each of these disciplines requires specialised knowledge and targeted management. To manage this complexity, many companies rely on specialist agencies. The problem is that the more service providers involved, the harder it is to keep track of costs, efficiency and success.
Large companies in particular invest huge budgets in advertising. Whereas in the past clients (companies) dictated prices and agencies competed for business, the balance of power has shifted. Today, large agency networks dominate the market and increasingly dictate terms. As a result, companies are losing control of their own marketing efforts as they struggle to navigate the complex web of creative, media planning and digital campaign optimisation services.
These uncertainties mean that companies are looking to bring marketing expertise back in-house, particularly in the digital space. But this brings new challenges. Marketing departments are demanding a variety of tools to make their work more efficient, which in turn puts a strain on IT and controlling. It also creates new data silos that need to be connected at great expense. While the volume of data is growing exponentially, the quality and, more importantly, the efficient management of this data is lagging behind.
The future? Greater transparency through MRM systems
In the face of a lack of visibility into costs and performance, companies are increasingly turning to Marketing Resource Management (MRM). These IT solutions are designed to help plan budgets more effectively, implement activities more efficiently and make campaign success more measurable.
MRM systems enable continuous measurement and reporting of key performance indicators (KPIs). They help companies manage global campaigns in a decentralised way, while maintaining a centralised view of all relevant data. The advantage: information is managed centrally, but can be maintained flexibly by local units and service providers.
This makes marketing not only more transparent, but also easier to control. Budget utilisation becomes traceable, planning errors can be reduced and inefficient activities can be identified more quickly.
MRM solutions can therefore help to network the resulting data, derive measurable success criteria and summarise and translate the results for the measurability of marketing activities for those responsible.
Implementation challenges
Although MRM systems offer enormous potential, there are hurdles to implementation. A key challenge is to focus on the core benefits. Many companies get distracted by add-ons - such as web-to-print tools or media asset management - and invest more in side issues than in optimising budget and campaign management.
Cultural resistance should also not be underestimated. The introduction of such systems is not always met with enthusiasm. In particular, departments that previously had a great deal of freedom to spend their budgets feel restricted by the increased transparency. It also opens up the 'black box' of the marketing budget, making unclear allocations and inefficient investments more difficult.
Marketing departments are often highly creative and feel constrained by too many figures and reports. However, modern CMOs are increasingly recognising the value of data-driven management and are demanding transparent processes, clear budgeting and reliable real-time reporting.
In particular, non-advertising managers from other parts of the business expect a globally controllable and flexible marketing organisation.
Conclusion: Strategic marketing management is the key to success
Gone are the days when marketing was managed solely through creative campaigns and high budgets. In an increasingly complex world, companies need to organise their marketing processes more strategically to be more efficient and successful. The challenge is to balance creative freedom with data-driven control.
Marketing Resource Management systems offer a promising solution for creating transparency and regaining control over marketing investments. Companies that are able to use these technologies wisely and focus on their core benefits will be more successful in the long run.
Modern CMOs must therefore be not only creative leaders, but also data-driven decision makers. Only those who see marketing as a strategic tool, not just a cost factor, can make the right decisions for the future.