Marketing is leading the digital revolution
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Every revolution has its vanguard. Throughout technology’s history, that vanguard has been the part of an organization willing to invest for one or both of two reasons: it is having significant trouble with the status quo or it has a compelling vision that things could be done in a new, better way.
When computerization first became widespread decades ago, in the vanguard were accountants, who desperately needed to automate number crunching and reporting. The world was globalizing, corporations expanding, and spreadsheets and paper would no longer suffice. From those early, mainframe-led revolts, the revolution spread to engulf every industry in every part of the globe.
But if accounting once led to widespread computerization, marketing is leading today’s digital revolution. Much of the data fueling this revolution had always existed but hadn’t been captured in digital format, or been stored, or been readily available to people and places far from their source. Today, digitally recorded data describe nearly everything about our world, from highly tangible things like parts in the supply chain, inventory on the shelf, and seats on the plane to less tangible concepts like probabilities and sentiment. And it’s the marketing department that’s become the central repository. Once a realm defined by its creative expression, trade shows, and glossy literature, marketing has instead become the place in the organization that pulls together all of the information necessary to find, sell to, and serve the customer effectively and efficiently. This shift blurs the lines of control as supply chain, customer relationship management, and other data systems become subordinate sources for information critical to marketing success.
Marketing finds itself in the vanguard because it stands to gain the most from digitization. Digital data describes a customer’s history, preferences, and — as the proliferation of smartphones grows — immediate context. When combined with powerful analytics, digital data allow marketers to segment their audience and create propensity models that can predict how and when to influence customers to buy. Digital data also describe the amount and location of current inventory, offering merchants an opportunity to make offers based on a sophisticated knowledge of supply and demand.
As evidence of marketing’s central role, just look at which department in your firm is commanding the fastest-growing share of the technology budget and attracting the lion’s share of data analysts and data scientists. There are fewer marketing majors at the controls of marketing decisions than ever before, as the skills needed to participate in the revolution have been redefined. With data analytics as the driver and automation as the goal, marketing departments are scrambling to pull in skills that would have lived purely in IT and in the quant labs of financial service firms. These skills are now reaching beyond data analysis to encompass information architecture, application development, and technology project management.
This might be all to the good except that the rapid change in marketing roles and skills has come at the expense of the traditional IT organization. More than just a drain or overlap in skills, organizational budgets have shifted rapidly away from IT, leaving the CIO scrambling to support legacy systems that are still necessary and costly to maintain.
In every revolution, there is a shift of power from one group of players to another. However, if the marketing-led digital revolution leaves IT behind in a zero-sum funding game, that won’t ultimately serve the needs of the broader organization. Starving IT of budget takes a heavy toll on innovation. And expecting marketers to operate as a shadow IT department is both expensive and presents significant data-governance and operational risks.
For this revolution to work, organizational power can’t simply continue to devolve from IT to the marketing department. CIOs and CMOs must meet in the middle. Decades of safe, smart IT practice needs to be applied to the new ways of finding and using data. Only a partnership will allow marketing to be efficient and effective as this revolution continues to unfold. What form that partnership might (or could) take isn’t clear. Some companies are installing chief information officers to bridge the gap, while others haven’t yet decided what action to take. One promising solution is a new role, the chief marketing technologist — a hybrid of the CIO’s tech knowledge and the CMO’s marketing savvy.
What is clear is that something will need to give as this revolution permanently changes the way organizations are structured and how all software, not just marketing tech, is purchased, deployed, and maintained. Otherwise unaddressed problems will only become worse as the Internet of Things and other digital trends open up even greater opportunities to hone marketing effectiveness, and more and more resources flow (but from where?) into digital-marketing efforts.
This post first appeared on the Harvard Business Review and has been lightly edited.
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