3 steps to increase your martech budget

Marketing technology budgets have declined by 18% over the past six years, with Gartner reporting a radical reprioritization of resources this year. Martech budgets experienced the steepest cuts, reflecting a shift in control from CMOs to other enterprise leaders like IT and CFOs. 

This highlights a deeper issue: a lack of trust in martech’s value. While IT and marketing departments have long implemented martech solutions with high expectations, proving their transformative impact remains challenging. This ongoing struggle affects MOps, marketing teams and the broader organization.

The dangerous cost-cutting race

CEOs, CFOs and CIOs have long asked the million-dollar question: “Are we getting value from our martech?” With IT’s support, CFOs may choose to consolidate systems, often neglecting the unique capabilities some marketing systems offer. That type of consolidation can be similar to replacing company trucks and cars with bicycles simply because they all have wheels, and bikes are the cheaper option.

With a similar mindset, some CFOs choose to consolidate various email systems, such as newsletter platforms (e.g., MailChimp), transactional systems (e.g., SendGrid) and marketing automation platforms (e.g., Marketo), into a single solution. However, while all systems use email, their core capabilities do not overlap.

• Newsletter platforms: Deliverability, IP reputation management, bounce rate optimization and blacklist prevention.
• MAPs (marketing automation platforms): Automation sequences, drip campaigns, audience segmentation.
• Transactional systems: Scalability, managing large volumes of time-sensitive emails.

Consolidating these platforms might seem cost-effective, but it leads to expensive fixes since the other email systems cannot replace the other capabilities. 

On the other hand, CFOs may not realize that some martech tools do not contribute to company value because most martech metrics are centered on cost rather than value. This can create a perilous downward spiral for the entire company. As Rory Sutherland, Vice Chairman of Ogilvy UK, puts it:

“A cost is quantifiable. If you cut it, it delivers predictable results almost instantaneously. A missed opportunity does not appear on a balance sheet. But serving your existing customer base, ever more cheaply until a weird crunch point where customers get pissed off and go elsewhere.”

This relentless drive to cut costs can lead companies into a trap, sacrificing long-term value and customer satisfaction for short-term gains. Without clear metrics to show martech’s true contribution, it’s challenging for marketing teams to defend their budgets and demonstrate value. 

To break this cycle, companies must rethink how they measure martech’s impact, align team objectives and build internal support for martech investments. The following three steps offer a path to achieving this shift and securing martech’s role in driving business growth.

Step 1: Use martech metrics that show value

Most current martech metrics focus on efficiency, not value. The table below highlights how these metrics often emphasize operational efficiency only.

Companies need to strike a balance between opportunity and cost. The martech value metric connects martech maturity with company value by correlating internal performance with external outcomes. Time and time again, companies that can demonstrate the value of martech see their budgets increase.

Dig deeper: The CMO’s guide to aligning martech and business strategy

Step 2: Identify martech agendas

There are two primary agendas within companies. 

• Some departments focus on what benefits the company — current revenue, efficiency and doing things right. 
• Others focus on customer needs — future revenue, effectiveness and doing the right things. 

The matrix below can help identify these agendas before heading into meetings.

Companies must balance these agendas, recognizing that both are essential. Unfortunately, many fail to do so, leading to ongoing internal conflicts. IT accuses marketing of creating Shadow IT and using point solutions, while marketing accuses IT of deprioritizing their needs, preventing innovative campaigns that maintain brand relevance.

Both sides have valid points. Both need each other. Each approach is necessary for a company’s current and future success. As Dr. Phil once said, “You can’t change what you don’t acknowledge,” and he’s an expert on resolving trust issues.

Step 3: Identify your martech stakeholders

The core issue is that no single department owns the customer experience, so every department thinks they do. This fragmentation results in suboptimal martech utilization and customer experiences. To align and share martech ownership, identifying internal stakeholders (or “buying centers,” as vendors call them) is crucial. There are generally three stakeholder groups.

CIO-CTO-CFO group

• Focuses on cost and control management.
• Emphasizes simplifying architecture, deduplication and maintaining cost efficiency.
• Aims for scalability and performance, leveraging proven revenue streams and practices.

MarketingOps-Admin-Data group

• Prioritizes internal martech management, addressing technical issues, service quality and managing backlogs.
• Works on automating processes, expanding capabilities and centralizing platforms to reduce workload and enhance operations.

CMO-Marketing-CX group

• Focuses on finding new martech use cases to drive future revenue.
• Implements experimentation and growth tactics to discover innovative business strategies.

The martech stakeholder matrix

The martech stakeholder matrix offers a structured approach to clarifying martech responsibilities across diverse agendas and stakeholder groups. By aligning objectives, this matrix helps teams manage martech ownership and investment priorities more effectively. It also serves as a practical tool for facilitating internal discussions, ensuring each stakeholder’s role and goals are clear. 

Below, the matrix outlines three martech stakeholder roles, helping to build a shared understanding that supports collaborative decisions.

Dig deeper: 3 tips to tackle the annual marketing budget challenge