Marketers are spending more on data management platforms than operational tech

Marketers are investing more of their budgets in databases and analytics management technology platforms than operational tech solutions like campaign and decision management tools, according to Merkle’s Q1 2020 Customer Engagement report, released Tuesday.

The survey, which polled 400 U.S. and UK based marketers, found that 29% said they spend more on management tech than operational tech, with another 29% reporting they invest only in management technology solutions versus spending on both.

Less than a quarter of marketers balance their spend. Only 24% of the survey participants report spending “about the same” on both management and operational technology. The findings show marketers are more likely to focus on data management tools compared to solutions used for campaign activation — highlighting a potential disconnect between collecting and managing customer data and having the necessary martech to plug the data into campaign efforts.

High adoption rates for CDPs. Seventy-five percent of the marketers surveyed had invested in a customer data platform (CDP) — and 37% had invested in both a CDP and data management platform (DMP). There was a small fraction — 17% — who had only invested in a DMP without also implementing a CDP solution.

To account for the marketers who have avoided purchasing a CDP, but bought a DMP — or the 7% who have neither — Merkle said it believes there is “confusion” within the marketplace around what a CDP can deliver: “Organizations view the traditional marketing database as representative of the data hub, but in reality, this does not take into consideration the capabilities of true CDPs.”

Identity solutions account for decent share of marketing budgets. Merkle’s survey revealed many marketers are investing a sizeable amount of their budget to identity tech, with nearly half of the marketers it surveyed allocating as much as 21% to more than 25% of their marketing spend to identity-related solutions. (A fifth of the marketers report they spent more than 25% of their budget on identity.)

Merkle acknowledges much of this spend is going toward solutions that provide “traditional processing of names and addresses and to digital onboarding.”

Personalization efforts fall short. While, at least, 94% of the marketers had purchased personalization technology, the large majority (78%) had failed to implement it on more than three channels within the first year of having the tech. (Previous research by Merkle shows that most personalization efforts are focused on email, site and digital media channels, with lagging adoption for browser, mobile push, SMS and chat efforts.)

On a more promising note, 50% of the marketers report they had implemented personalization on five or more channels to date — 7% said they used personalization on more than eight channels. So while marketers may be slow to apply their personalization tech within the first year of having it, the survey shows at least half have been able to move beyond their limited first-year implementations.

Why we care. It’s one thing to capture the necessary data to personalize your marketing efforts, but quite another to have the operational tech — and needed skills — to activate personalized, relevant campaigns. If marketers want to take full advantage of the data they are collecting, they’ll need to build out their martech stack to include both data management platforms and the operational technology that enables effective campaign activations.

About The Author

Amy Gesenhues

Amy Gesenhues is a senior editor for Third Door Media, covering the latest news and updates for Marketing Land, Search Engine Land and MarTech Today. From 2009 to 2012, she was an award-winning syndicated columnist for a number of daily newspapers from New York to Texas. With more than ten years of marketing management experience, she has contributed to a variety of traditional and online publications, including MarketingProfs, SoftwareCEO, and Sales and Marketing Management Magazine. Read more of Amy’s articles.