Relationships between IT and marketing are a perennial source of interest, analysis, and concern. With the growth of technology budgets inside marketing, the impact on IT and the CIO is undeniable.
Consulting services firm, Avanade, interviewed marketing and IT executives to gain their perspective on how both groups can develop a collaborative perspective, and published the results as a report in the form of an ebook. I contributed to the project, providing an overall view on tensions between IT and marketing. It’s a topic about which I often write, so here is an adaptation of my comments.
Rise of Digital Marketing
Historically, marketing was an exercise in branding and broadcasting. Brands would develop their message and communicate using broadcast mediums such as advertising on television and magazines. Branding meant a tightly controlled series of one-way communications.
Eventually, the Internet enabled large communities of interest, in which consumers could communicate rapidly and form a collective voice that brands could not ignore. Forums, discussion groups, Twitter, Facebook, and other social channels gave consumers the power to shape public sentiment and opinion regarding brands. The rise of digital media put consumers in the driver’s seat.
Scott Brinker, author of the Chief Marketing Technologist blog, wrote a great e-book describing the transition from traditional to digital marketing.
In addition to the sheer speed of communication, digital media adds a new dimension to marketing: highly accurate data. When a YouTube clip or a blog post goes viral, for example, a brand can measure the impact with greater precision than ever before. The ability to track digital interaction based on data, together with the new empowered consumer, changed marketing from broadcast messaging to customer engagement.
Most importantly, accurate data enables marketers to cultivate a relationship with buyers, based on their particular interests. While engagement and relationship are the hallmarks of modern marketing, traditional branding efforts relied on:
Top-down, command and control relationships
Assumption that customers are a commodity
Attempts to create customer perception rather than offer genuine value
Data and technology make possible a form of mass customization in which brands can present content and purchase choices based on individual consumer preferences. Think about Amazon and Netflix recommendations, for instance; data is the foundation of these services.
Digital data is the driver behind marketers’ increasing appetite for technology and underlies tensions between the CMO and CIO. Marketers are still stewards of the brand, and they have also become responsible for measuring digital engagement, which means infrastructure, personnel, and processes related to adopting new technologies. As a result, many CMOs now have extensive budgets for technology outside the control of the CIO. AdWeek predicts that digital will grow to 75% of a marketer’s budget.
The growth of technology budgets within marketing, combined with the consumerization of IT and self-service cloud software, has created a built-in tension between the CIO and CMO.
While the CMO views technology as a means to deliver innovative results and execute marketing campaigns quickly, the CIO needs to supply technology across the organization safely and at low cost. IT allocates resources and makes decisions from a broad organizational view, rather than optimizing to meet the needs of any single department, including marketing.
From the CMO’s point of view, IT appears slow, inefficient and unresponsive; meanwhile, the CIO views marketing as demanding and insensitive to IT constraints and the need to address broader corporate requirements.
The rise of shadow IT reflects this gap. When IT is not sufficiently responsive, it is only natural to expect that corporate users will bypass IT and purchase technology themselves. Modern cloud-based services make this simple, fast, and cheap.
The most forward-thinking CIOs I know use shadow IT as a gauge to measure whether the IT department is meeting user needs. On this point, Intel’s CIO, Kim Stevenson, comments:
The business units make those decisions because they are trying to accomplish their objectives in the way that they think is the most efficient. If they are not choosing you, there is a reason.
I never bash shadow IT because they are fulfilling a need that ultimately IT could not fulfill. Once you get your head around that principle, then you can start working to figure out how we can best fulfill it for the company.
Digital transformation and the future
Many CMOs focus on marketing efficiency rather than aligning to broader corporate strategies. As more companies undertake digital transformation, business model change and the impact on operations becomes more important for marketers to understand.
Recent studies have highlighted the need for CMOs to take a more expansive view of strategy, process, and business model issues that affect the organization as a whole. While Some CMOs will make the leap to digital business strategist, others will find their company hiring a Chief Digital Officer to play this role.
Likewise, CIOs who do not make the transition from infrastructure focus to innovation and solutions provider risk becoming marginalized. The CIO challenge lies in developing the skills, relationships, and credibility needed to participate in conversations about overall business strategy rather than remaining confined to technical and support matters.
(CMO/CIO heart icon image taken from the Pegasystems blog; hope they don't mind. Disclosure: Avanade is a client)