Focus on Integrated (Rather Than Enterprise) Marketing Management

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1 Research Publication Date: 6 October 2010 ID Number: G Focus on Integrated (Rather Than Enterprise) Marketing Management Kimberly Collins This research highlights the shift in thinking from enterprise marketing management (EMM) to integrated marketing management (IMM). It explores the key business benefits from integrating people, processes and technologies, as well as the important components to integrate in marketing. Key Findings In marketing, the term "enterprise" often has the negative connotation of large-company, big-project initiatives with high costs and a low return on marketing investment (ROMI). Despite improvements in the economy, marketing organizations still face pressure for ROMI and accountability. Marketing technology buying is shifting to the midmarket, B2B and Type B/Type C companies that prefer more-integrated solutions. The hype about digital marketing/social media complicates marketing management. Software-as-a-service (SaaS) solutions continue to grow in importance, particularly for B2B and midsize companies looking for more-affordable and/or less-complex solutions. Recommendations Focus on integrated people, processes and technologies, rather than taking an enterprise focus for your marketing strategies and technology decisions. Prioritize which areas to integrate first, based on the benefits that integration provides. Don't expect a single vendor to provide everything; consider multiple deployment options (on-premises versus SaaS versus hybrid) and depth of functionality requirements (suite versus best-of-breed). One vendor may provide the platform and most of the functionality (particularly for midmarket/b2b companies); however, third-party applications for analytics or some degree of master data management (MDM) may need to be integrated to plug holes. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 WHAT YOU NEED TO KNOW Marketing organizations should think integrated, not enterprise, when making marketing technology investments. A focus on integrating the nine areas of planning, financial management, performance management, people, online/offline channels, processes, content, data/analytics and procurement will lead to a higher ROMI. STRATEGIC PLANNING ASSUMPTION(S) By 2014, companies that develop an IMM strategy will deliver a 50% higher ROMI than those that don't. ANALYSIS Gartner has found that, when used in connection with EMM, the term "enterprise" may have negative connotations, because it's often associated with large and expensive projects that yield little return on investment (ROI). Enterprise is also associated with large companies and considered something beyond midmarket firms or resource-constrained companies. Cloud and SaaS-based technologies have opened the potential doors of EMM to a wider market segment; however, many still view EMM as applicable only to large enterprises with global marketing functions. Gartner believes that EMM no longer resonates with the market. Therefore, Gartner will be using IMM, rather than EMM, to emphasize the focus on integration. The definition remains largely the same; however, the focus has shifted to the benefits of an integrated marketing approach (see "EMM Platforms Support the Marketing Ecosystem"). Four factors are driving this change: The rise of new social and mobile channels that accentuate marketing's complexity Demands for accountability and measurement of marketing performance Technology adoption in B2B industries and the midmarket for marketing The development of SaaS-based offerings The integration of people, processes and technology to drive ROMI is the true value proposition underlying IMM (formerly known as EMM). By 2014, companies that develop an IMM strategy will deliver a 50% higher ROMI than those that don't. Marketing processes are complex across the marketing mix (e.g., advertising, targeted marketing, digital marketing, lead management/sales enablement, field marketing and events) and the growing number of accessible channels (e.g., traditional media, direct mail, , Web, contact center, store/office, social media and mobile). As digital and social-media channels explode, the need to manage the marketing mix increases exponentially. Many of these new channels are not integrated into the traditional marketing processes, creating internal competition for resources and external competition for customers' attention, leading to customer fatigue and poor customer experiences. With continued pressure on marketing budgets and accountability, marketing leaders and chief marketing officers (CMOs) need a foundation that enables them to integrate people and processes across the marketing ecosystem for planning, financial management and performance management, as well as to balance the channel mix (online/offline, traditional media and social media). The marketing ecosystem includes internal marketing staff and external stakeholders inside and outside of the company (see Figure 1). Internal participants typically include multiple roles and Publication Date: 6 October 2010/ID Number: G Page 2 of 8

3 functions that support database marketing (campaign planners, business analysts, channels, customer segments and product teams) and the creative side of marketing (brand managers, creative planners, marketing communications/public relations, advertising and media planners), as well as marketing leaders (CMOs, marketing operations directors, sales VPs, directors, marketing communications [MARCOM] managers, etc.). Figure 1. Participants in the Marketing Ecosystem Source: Gartner (October 2010) External participants within the organization include e-commerce, sales, field marketing, the contact center, finance, procurement, HR and compliance. External participants outside the company include marketing services providers, third-party data providers, market research firms, creative and interactive agencies, PR agencies and print shops. However, the internal/external boundaries shift, depending on the size and resources of the organization. For example, midsize and resource-constrained firms may have more external company participants than internal ones. IMM is just as important in these organizations (if not more so) to manage the stakeholders. SaaS solutions become interesting alternatives to integrate the ecosystem, as the number of external participants increases. IMM encompasses the business strategy, process automation and technologies required to effectively operate a marketing department, align resources, execute customer-centric strategies and improve marketing performance. Figure 2 depicts the IMM platform required to fully manage and integrate all marketing activities, programs and campaigns. IMM can be delivered on- Publication Date: 6 October 2010/ID Number: G Page 3 of 8

4 premises, hosted, SaaS or hybrid. It does not require a solution from one vendor only, although one vendor may supply foundational or standard applications, such as the marketing database, content repository, process management or workflow, and performance management. Gartner believes IMM will be owned by the vendors that differentiate themselves on process and performance management as the platform to integrate their applications, as well as those from other vendors. Figure 2. The IMM Platform Source: Gartner (October 2010) An IMM strategy and platform will enable marketing to achieve a higher ROMI through several techniques. Integrated Planning Planning is often ad hoc across marketing and not aligned with other business functions, such as sales or the supply chain. Lack of planning prevents marketing from setting common objectives and determining the appropriate marketing mix to achieve those objectives. Even worse, it can result in conflicts with sales or marketing promotions where a product is not on the shelf. There is no ability to make course corrections to the marketing mix during the year based on results. IMM provides a platform for marketing leaders to establish objectives that are aligned with corporate goals, determine the marketing mix and make short-term adjustments based on results. IMM should also integrate with solutions for sales, supply chain and field marketing, as well as agencies. Publication Date: 6 October 2010/ID Number: G Page 4 of 8

5 Key Capabilities: Objective setting, global calendar, analysis dashboards, scenario planning, resource planning, marketing mix optimization, project planning and daily calendars Integrated Performance Management Measurement rigor varies greatly across marketing from very rigorous in digital marketing to fairly decent in targeted campaigns to not at all in traditional media advertising. Inconsistencies in measurement make it impossible to justify budget and resources based on performance. It can also lead to erroneous decisions to keep doing what is measurable, because it's easy to justify the budget that way, and cut all that isn't measurable. Without a common view of performance across marketing categories, marketers could cut programs that drive response and performance in the other areas. IMM provides a common foundation for measuring performance and for applying measurement techniques to areas that had been poorly measured. IMM should also integrate with solutions for corporate performance management (CPM). Key Capabilities: Reporting, performance measurement, interactive dashboards and ROMI analysis Integrated Financial Management Financial information and costs are often tracked in numerous spreadsheets (if they are tracked at all). There is no central line of sight into actual spending. The result is the absence of a capability for understanding the costs of marketing campaigns and determining ROMI. There is also limited ability to understand where money could be better reallocated to other programs after the budget is set. It is not uncommon for marketing staff to "burn" money at year-end, rather than lose budget. Integrated financial management supports budgeting across the entire marketing mix, better allocation of resources and the ability to track costs by marketing campaign or initiative. It also prevents rash spending and supports the reallocation of funds to new or existing programs, if justified during the year. This solution should be integrated with finance. Key Capabilities: Budgeting, cost tracking (committed versus actual) and alerts/notifications Integrated People In large marketing organizations or organizations with numerous external participants, connecting with colleagues and finding the best resources for a marketing initiative can be difficult. IMM should enable and support collaboration, knowledge sharing and human resource management across the marketing ecosystem, involving participants in the marketing process in a streamlined fashion to complete marketing programs, campaigns and other initiatives. Knowledge management capabilities are critical here. Key Capabilities: Common user interfaces, business rules and workflows, project and task management, blogs, wikis, social media and communities Integrated Online/Offline Channels and Campaigns The number of channels available to marketers has grown tremendously, and digital and social media are increasing the number of potential options exponentially. However, many of the new types of digital and social campaigns are often conducted in isolation in the new channels. As a result, many organizations end up with lots of marketing silos in which different channel target the same customers. Companies risk poor customer experiences and customer fatigue from uncoordinated marketing across all the channels. By integrating online and offline channels, marketers can create multichannel campaigns that support a dialogue with the customer and generate higher response rates, support opt-in and opt-out centrally, and measure channel Publication Date: 6 October 2010/ID Number: G Page 5 of 8

6 contributions/impact to plan a better marketing mix (see "Five Business Benefits to Be Gained From CRM Multichannel Campaign Management Inbound/Outbound Integration"). Key Capabilities: Multichannel campaign management and measurement, digital marketing, e- mail marketing, lead management, outbound campaigns, inbound offers, event-triggered campaigns and campaign/offer/channel optimization Integrated Processes IMM provides business rules and workflows that support closed-loop marketing from concept to execution to measurement for any type of marketing initiative e.g., targeted marketing campaign, digital or social media campaign, creative advertising, product launch, promotion. It aligns executional, operational and analytical processes to support the closed-loop process for each marketing initiative (e.g., campaign, promotion, offer, advertising, product launch) and integrate the relevant participants, including those external to the marketing organization and the company. Key Capabilities: Business process management (BPM), business rule engines (BREs), workflow, task management and project management Integrated Content Marketing content and digital assets are often stored in numerous repositories (if they're stored at all) or with the agency. Sales and external participants often have separate content repositories, even if marketing has a centralized one. IMM should provide access to marketing content and digital assets across the marketing ecosystem, based on appropriate levels of access, with appropriate rights to update and change content based on role (e.g., creative staff versus sales/field). This supports reuse, eliminates rework and enables the assessment of usage and effectiveness. Key Capabilities: Centralized content and a digital asset management repository (ability to store, search, review, comment and revise document, video and audio content), templates and guidelines for usage Integrated Data and Analysis Marketing data often resides in many data marts associated with different marketing applications, in spreadsheets, in other office productivity tools and with third-party sources. Reporting and analytics is often tied to the applications and the databases associated with those. This approach limits the ability of marketing to share data and analyze results consistently across the marketing mix. Integrating customer, partner, financial, campaign, activity and vendor data provide more insight across all marketing activities, and a set of common analytical tools supports the ability to analyze and measures results consistently across the marketing organization. (Prospecting data and third-party data may still be kept separately, with only aggregated information pulled into the marketing database). Integration with numerous data sources and leverage of MDM is required. Key Capabilities: Centralized marketing database, marketing data models, data quality tools, reporting and analytical tools, MDM, customer data integration and operational data stores for operation access Integrated Procurement Most marketing organizations spend a lot of money with third parties, but don't manage vendor procurement and payment effectively. Most marketing organizations spend about 80% of their money with 20% of the vendors with which they've done business, but are unable to demonstrate Publication Date: 6 October 2010/ID Number: G Page 6 of 8

7 leverage, because of a lack of integration across marketing (see Figure 3). Integrated procurement processes enable marketing to achieve economies of scale by using preferred vendors, negotiating better deals, supporting bidding and avoiding duplicate payments. Marketing solutions should be integrated with the companies' procurement systems. Key Capabilities: Requests for quotation (RFQs), preferred vendor list management, order management and payment tracking Figure 3. The Nine Areas of Marketing Integration Source: Gartner (October 2010) RECOMMENDED READING "Magic Quadrant for Enterprise Marketing Management" "EMM Platforms Support the Marketing Ecosystem" "Five Business Benefits to Be Gained From CRM Multichannel Campaign Management Inbound/Outbound Integration" Publication Date: 6 October 2010/ID Number: G Page 7 of 8

8 REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 6 October 2010/ID Number: G Page 8 of 8