Gartner Inc.

02/08/2023 | Press release | Distributed by Public on 02/08/2023 16:35

Marketing Must Rightsize Its Investment in Marketing Operations

Only 28% of marketing organizations exhibit characteristics that correlate with improving operational performance. CMOs put enterprise growth at risk by investing in ineffective transformation efforts.

Register at our upcoming webinar to learn more.

Everyone Is Trying to Transform

Gartner's 2022 Marketing Operations Survey shows that 94% of marketing organizations have established or are establishing a formal pursuit of marketing operational excellence.

We call this the "pursuit of MOE".

Gartner defines the pursuit of MOE as an approach to improving marketing's functional processes and/or changing the way marketing gets work done to increase efficiency, scale and effectiveness.

The imperative for pursuing change is well documented (see Digital Transformation / VUCA Environment / Journey Orchestration / Cookie Deprecation). But even though business-as-usual marketing no longer looks like a 1970's ad campaign, it's still dominated by the push out of time-bound messages produced by one-off projects.

The Total Cost of Change

In trying to transform itself, I find that marketing leaders have trouble seeing the forest through the trees. Marketing is spending money on many initiatives with many names: driving technology adoption, organizing customer data, implementing agile processes, improving analytics, optimizing workflows, aligning work to strategy. The list goes on.

Gartner's 2022 Marketing Operations survey aimed to cut across these initiatives and build a total cost for the pursuit of operational excellence. Analysis of the data found that on average marketing spends 31% of its budget on the pursuit of MOE.

Here is the list of expenditures we asked about:

  • Dedicated Full-Time Staff for the Marketing Operations
  • Technology for Marketing Operations
  • Training and Upskilling for Dedicated Staff MarOps Staff
  • External Consulting and Research Support for Dedicated Staff
  • Training and Upskilling for All Marketing Staff
  • External Consulting and Research Support for Organizational Change

Less than half of that spend went to dedicated marketing operations staff and technology, the majority went to enabling change.

The Risk of Ineffective Efforts

The cost (and risk) of change is not surprising.

What is worrisome is the inconsistency of effort as it relates to performance improvement objectives.

Only 28% of pursuits have characteristics that correlate with improvement in operational performance. We call those 'strong pursuits.'*

[Link]

Strong pursuits actually spend 40% of their marketing budget on the pursuit of MOE, and are likely to be adding staff. That should scare the 72% of marketing organizations that comprise all other pursuits which don't correlate with success.

All other pursuits spend less than strong pursuits: 27% of the marketing budget. But I don't think you can't just tell 'all other' marketing organizations to blindly up their investment in hope of becoming more effective at the pursuit of MOE.

Also, this research doesn't reflect the opportunity cost of withholding funds from existing marketing programs.

The characteristics of strong pursuits are listed below - along with links to our related guidance. If you don't have alignment to positive operational improvement outcomes, it might just be better to direct budget back into business-as-usual marketing activities until you feel confident in your own pursuit of MOE.

Beware of Over-Optimization

One more word of caution. While change may be constant, transformation should reach an end.

At some point, even strong pursuits of MOE should see diminishing returns on investment as critical gaps are resolved, new capabilities established, and important processes made more efficient.

There will still be a need to spend budget on operational excellence, but marketing operations leaders should set an expectation that investment will be reduced and funds redirected back into a more efficient and effective marketing function.

After all, that is what prudent stewards of marketing resources are supposed to do.

- Michael

* Strong Pursuits

Strong pursuits of operational excellence in marketing complement the day-to-day management of marketing's work. In Gartner's analysis of survey data, strong pursuits generally consist of 5 or more of the following characteristics:

  • No manual work management
  • Broad adoption of a primary work management tool
  • Integrated operational martech (budget, planning, work, resource management)
  • Strong investment in change (> 35% of the marketing budget)
  • Utilization of formal or adapted Agile methods for the majority of work
  • Sole responsibility for one or more change mandates
  • Already in pursuit of MOE for more than 2 years

Gartner Guidance

Subscription required: