“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Julian Baring, general manager, North America, at Adform.
The COVID-19 pandemic and its economic implications are catapulting the tech-driven marketing world into a new phase of maturity: a long-overdue period of reflection and refinement, during which the lessons of the past 12 years will be distilled and applied to marketing organizations.
As brands across industries feel the pinch of the recession, they shouldn’t race to downsize their human capital. They must first look to correct the inefficiencies and leakages that have emerged within their expanding tech stacks.
Since the Great Recession, the marketing technology world has followed a predictable pattern of growth and innovation – the kind required for nascent opportunities to reach maturity. A large part of this innovation and growth has materialized within the media supply chain in the form of new, often automated tools for media planning and buying, creative development, performance monitoring, campaign optimization and other functions. These tools have elevated the discipline of marketing over the past decade, but the speed of innovation and race to keep pace often meant sacrificing efficiencies for the sake of rapid adoption.
As companies steel themselves for the coming economic challenges following COVID-19, business practices and systems must shift. We can’t assume we’re going to witness a V-shaped economic recovery. Marketers must adapt and usher in a new era of efficiency.
To accomplish more with less, marketing leaders must take a hard look at their systems and determine where costs might be leaking as they attempt to deliver on KPIs.
Common culprits of inefficiency
Over the past 10 to 12 years, many marketing organizations have cobbled together best-of-breed ad tech and mar tech solutions across functions. Adapting to changing consumer media consumption habits from display to mobile, social and now connected TV have also resulted in technology and solution fragmentation and unnecessary inefficiencies that can’t be tolerated in the post-COVID-19 economic landscape.
As marketers examine their stacks for savings opportunities, they should look for redundancies:
Tech licensing costs: It’s likely that multiple services with similar functions are employed across disparate departments, resulting in redundant or inflated licensing costs for technology. This could be avoided by deploying a single solution across departments and functions.
Operational costs: When collaboration is required across teams, but those teams are working with different tools, significant resources are required to get data to flow across systems and cross-train employees on multiple tools. This redundancy and operational complexity adds significant hidden costs.
Service fees: Operational models that employ multiple agencies typically see some degree of overlap among agency contracts, resulting in redundant service fees that cover the same function.
Lost data or insights: When disparate tools or systems can’t communicate, actionable insights are lost. The net result is waste in the form of missed opportunities for optimization and improvement.
Solution redundancy: Many marketers duplicate their efforts with various solutions and partners because an early-stage or legacy solution lacked capabilities that a new partner met. But rather than remove the duplication, they often sustain both solutions, creating greater inefficiency.
As marketing organizations look to reduce waste within their patchwork tech stacks, many will move toward platform solutions that fulfill multiple functions across multiple departments, thus eliminating waste. However, in making this transition, marketers must take care to not stumble into another common scenario that breeds inefficiency: reliance on tools that lack the transparency required to continually optimize efforts.
Marketing organizations that rely on certain multifunctional platforms might find they’re avoiding the costs inherent in fragmented tech stacks. However, if they’re unable to fully assess how their money is being deployed and how it’s performing, they’re still wasting resources. True performance optimization requires full platform and media supply chain transparency.