The AI train is coming down the track and 2024 is the year winning brands and vendors will climb aboard.
AI is going to completely transform marketing.
It is the enabling technology that will give us the ability to manage, analyze and act upon the customer data we’ve collected to truly personalize and enhance the customer experience and journey. This isn’t going to happen overnight and it’s not yet clear how this is all going to unfold but what we do know is that:
- AI technology is rapidly becoming enterprise-ready and will give us the power to leverage the data we have in new ways to drive revenue and customer engagement.
- New vendors are emerging with AI-enabled applications; seemingly overnight we’ve seen an explosion in generative AI applications. This is just the tip of the iceberg; over the next few years we are going to see the emergence of broader AI-enabled applications and platforms that touch virtually every marketing function.
The AI train is hurtling towards us and the decisions we make and actions we take this year will determine if we are able to jump on board or if we’ll be stuck watching from the station as it passes by — or in the worst-case scenario, be left standing on the tracks and get mowed down.
2024 is the year to prepare
2024 is going to be a preparatory year for the marketing evolution and innovation to come. Setting aside generative AI applications that are already being utilized for creative purposes and shifting focus to those AI-enabled applications that have the potential to transform your marketing strategy and drive business growth, the key to success lies in ensuring that your data architecture is sound and that you have the technology personnel in place that understands how to evaluate new applications and the integration requirements associated with their implementation. To be truly useful, AI requires a clean, complete and accurate data set to leverage.
Those who ultimately succeed will use this year to ensure that they have the data infrastructure and personnel resources in place to capitalize on the opportunities ahead.
As always with any seismic shift in technology there are going to be winners and losers that fall by the wayside. Now is the time to ensure that you are set up for success. This call to action extends beyond technology users to those organizations that support them including vendors, consultants, and research and advisory firms.
In this first of a two-part article, we’ll look at what enterprise and vendor organizations need to do this year.
Enterprise organizations
My day-to-day professional life gives me a bird’s eye view of what is happening in enterprise organizations when it comes to marketing technology.
I continue to be astounded at the number of organizations that do not have a handle on the technology they use. And, by that I mean they are unable to produce a list of technology being used, evaluated or retired across the organization. These are the very basics of technology management; it’s mind boggling.
If you don’t have a clear picture of what’s in place you can’t possibly have a handle on your data infrastructure. The good news is that I am starting to see companies begin to prioritize documenting their tech stacks and mapping their data flows which is encouraging.
Another concern is seeing the number of senior marketing operations professionals being laid off as a consequence of budget issues. I’ve heard people say, “We can eliminate headcount because our stack is built and we just need operators.” Say what?!? — see reference to freight train above! Stacks are going to evolve quickly and dramatically over the next five years — you have no idea what’s coming.
The other talk track is, “We’ll hand over the stack to IT.” Again, say what?!? IT and marketing operations are very different functions and while I believe that IT has a role to play in marketing technology you can’t ask the IT department to take on the marketing operations function. First, it’s unlikely IT is sitting around waiting for new assignments, and second, though each function deals with technology implementation, their functional responsibilities are very different. IT deals with internal technology infrastructure, marketing operations deals with technology that directly touches the customer. Apples and oranges.
Architecting and managing a data infrastructure is a complex task that will only increase in complexity as new AI tools are onboarded. Now is not the time to let go of your senior tech talent to save money.
In many companies, the CMO is completely hands-off when it comes to technology. This great divide between the CMO and the technology team must be bridged. Technology already enables every single thing we do in marketing; the introduction of AI is going to reshape how we do marketing. This means new strategies, tactics and tools.
Success is going to require that the CMO is immersed in the technology strategy decisions that will drive the overall marketing strategy and should ultimately be responsible for the collection and utilization of data in the service of marketing objectives. For CMOs that haven’t come up through a technology role (most CMOs) it’s important to partner with a strong and trusted technology lead in the marketing organization to ensure that the marketing technology strategy will support marketing’s objectives and strategy.
Who will win and who will lose in this endeavor? The following characteristics will separate the enterprise winners and losers at the end of 2024.
Dig deeper: Marketing leaders, are you actually ready for AI?
Martech vendors
This is both an interesting and challenging time for vendors. On the one hand, it’s a challenging sales environment as enterprise organizations react to economic certainty and freeze purchasing; on the other hand, there’s tremendous pressure on vendors to innovate as competitors roll out new AI-driven capabilities.
Regardless of how challenging the sales environment is, vendors must compartmentalize and think strategically about product evolution and the impact of AI or risk being left behind.
The Martech landscape continues to grow and expand. Not every product and category will be impacted by AI but most will and we can expect to see new category leaders emerge over time.
Existing vendors can be put into one of two categories:
- Those with products that do not utilize or depend on a large amount of data and data analysis in the function that they perform.
- Those with products that produce, share, analyze and/or direct a large amount of data in performing their function.
Those in the first category are likely to be standalone single purpose products. For these vendors the questions that will need to be answered are:
- Is there data that can be leveraged by this product to create additional value, and if yes, is that data at a scale that warrants the implementation of AI?
- Are we at risk of being displaced by a product that is synergistic and leverages AI? An example: Are stock photography sites under threat with the introduction of generative AI image creators?
- Are we at risk of becoming irrelevant? Will AI render our functionality obsolete? For example: Will a platform designed to support live customer support personnel be made obsolete by a fully automated support system?
Each vendor needs to assess their own situation, risks and threats, and determine a plan of action — this could include product transformation, new product development, a strategic acquisition of new technology or a new player or a decision to sell to a bigger platform vendor that can make the investments necessary for long-term success. The answers to these questions and ultimate strategy will vary from vendor to vendor. The important thing is that vendors recognize that this is the year to put a plan in place.
Vendors in the second category are likely to be large platforms that are integrated with other elements in the technology stack. Here the challenges are of a greater magnitude; vendors in this category must look at both their own functionality and direct competition as well as the vendors in the categories that surround and connect to them as they consider their strategy and plan.
For some large platform vendors leveraging AI may be a difficult challenge due to the “technology legacy tax” associated with the years of development of their current platform which makes it difficult to add new functionality or shift direction. For some it just may be too difficult or time consuming to enhance current platforms and a decision will have to be about building a new platform or acquiring a new platform startup.
For many large platform vendors, understanding the scope of each customer’s data architecture is necessary in order to assess where integrations with their product are required and to successfully manage platform implementation. Obtaining this information is already challenging, but over the next few years this is going to get exponentially more difficult as data architectures extend and reach beyond current functional boundaries to capitalize on the capabilities that AI will enable. This is the year to lock down a process and workflow to ensure that customer environments are fully documented.
We all know that marketers are particularly susceptible to the next “shiny thing” and with the number of new AI-oriented martech entrants appearing on the horizon, maintaining market position and customer loyalty will require ensuring that customers are not distracted by those new shiny things and that entrenched vendors communicate their AI strategy and serve as a trusted resource when it comes to stack evolution and AI.
The vendors that will succeed long term will use 2024 to lock down and communicate their AI strategy and plan to their customers.
This is the year to create the foundation to successfully navigate through the coming seismic shift in technology.
History shows us that market leaders often don’t retain leadership positions as large shifts happen. For example: in the computer market mainframe leaders didn’t become mini-computer leaders and mini-computer leaders didn’t become PC leaders. AI is like nothing we’ve seen before and is likely going to upheaval everywhere. Now is the time for both enterprise and vendor organizations to ensure the foundations and strategy are in place to support the introduction of AI.
The impact of AI will extend beyond technology users and providers to those businesses that support this ecosystem. In the second part of this article, we’ll take a look at the impact the introduction of AI will have on consulting organizations and research and advisory firms.
Coming Up: MarTech in 2024 Part II: Who Will Be the Winners and Losers in the Consulting, Research and Advisory World?
The post MarTech in 2024: Who will be the enterprise and vendor winners and losers? appeared first on MarTech.
About the author
Anita Brearton is founder and CEO of CabinetM, a marketing technology management platform that helps marketing teams manage the technology they have and find the technology they need. A long-time technology marketer, Anita has led marketing teams from company inception to IPO and acquisition. She is the author of the Attack Your Stack and Merge Your Stacks workbooks that have been written to assist marketing teams in building and managing their technology stacks, a monthly columnist for CMS Wire, speaks frequently about marketing technology, and has been recognized as one of 50 Women You Need to Know in MarTech.
(12)
