SCOTTSDALE, ARIZ. -- It was a rough year for marketers, as is often the case anytime there's a dip in the economy,...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
but cutting back on marketing budgets doesn't mean companies need to cut back on marketing programs, according to a speaker at this week's Gartner CRM Summit.
Last year, said Kimberly Collins, research vice president with the Stamford, Conn.-based research firm, more than 75% of companies surveyed by Gartner said they would cut 20% or more of their marketing budget. The solution, Collins said, is to spend more -- on marketing resource management (MRM).
"It becomes very challenging for marketing to get any budget in this recession," Collins said. "MRM really helps put companies in a position to be more agile. There are always going to be highs and lows. Agile marketing organizations will always be able to adjust."
MRM is a set of processes that tries to enhance and optimize marketing processes, both internal and external, she said.
"There's a lot of areas in marketing that remain unmeasured and I hear it's 'because it's unmeasured we start to cut it out of our budget,'" Collins said. "With MRM, you begin to measure things you were not able to measure before."
Marketing resource management consists of five disciplines: strategic planning and financial management; creative production management; marketing fulfillment; marketing performance management; and knowledge management.
However, most companies don't have the ability to take on all areas of MRM at once. A good starting point, Collins said, is to appoint a marketing operations director or marketing operations office to recommend investments, establish benchmarks and best practices, select the technology and determine enhancements over time.
The MRM financial management discipline can offer big returns but also takes more time to implement and poses greater operational risk, Collins said.
"The worst thing to do is to take the hardest thing and try to make it a success first off," she said. "If something fails up front, it's really hard to go back and get buy-in. The key is to pick a few wins."
Additionally, organizations hoping to capitalize on MRM are best served by picking one area -- a brand, a product, a campaign -- where they can realize short-term wins and leverage best practices.
"The easiest and fastest is creative product management. It's the low-hanging fruit," Collins said.
Be aware, however, that creative people don't like to be automated and will push back on those projects. MRM project leaders need to stress that MRM will automate the mundane and administrative tasks that they hate, not their creativity.
"You really have to sell it to creative people because they will resist it if you don't," she said.
For companies launching marketing asset management, Collins recommends identifying one asset, like marketing literature, and managing that first before expanding.
Similarly, the marketing fulfillment discipline within MRM often means significant savings in printed collateral.
"You want to have some basis of an asset repository built before you start investing," Collins said. "It's hard to make things available to the field if you don't have good storage to begin with."
Marketing performance management is also a trickier discipline to begin with.
"When it comes to marketing performance management, that's something everybody is aspiring to do a better job with, but it is huge risk," Collins said.
There are few packaged software applications for marketing performance management, and they "are not ready for prime time," she said. Most of the available offerings are services.
"The key is to select one area," Collins said. "You probably have one already. This is going to take some time. Think about adding a new area of measurement every six months."
Collins offered up a number of other key recommendations for marketing. They include thinking of MRM in stages and identifying one area of interest in the next six months or integrate some of them together. In addition, be sure you establish key metrics; have an understanding of the value of the program; consider SaaS; and think about the long-term roadmap.
"I think this is a time [when] marketing's funds don't rebound with the economy," she said. "There are so many things happening for marketing -- social media, the CFO focused on reducing spending. If you don't have a platform in place to prove the value of your programs, you will not get far."
"Now is the time to act on MRM," Collins said. "If you take the time to act now, you'll be in a key position to move when the economy recovers."
Gartner estimates that by 2012, companies that leverage MRM effectively will save more than 15% of their annual marketing budgets.
Build the business case for MRM
When it comes to building a business case for MRM, determining revenue can be difficult, so don't worry too much about it, Collins said. For example, if MRM can eliminate $200,000 in waste, offer $2 million in productivity gains, eliminate $300,000 in head count and eliminate $3 million in spending with outside vendors (all of which are achievable for a large marketing organization, according to Collins), that's a total of $5.5 million. If the application and implementation costs $1 million, organizations are still saving $4.5 million without even counting the revenue gains.
Marketing resource management software vendors
Gartner has published a Magic Quadrant for MRM, which ranks the MRM vendors based on ability to execute and completeness of vision. The leaders are Aprimo, Assetlink and Unica, for their reputation and breadth of products. The challengers are Oracle, with its Siebel Marketing product, and SAP. Both have gaps in their products but are investing and growing their market share, Collins said.
The visionaries, companies with a good vision for MRM or in a key area, are SAS, with a strong marketing performance management product and Orbis, for its vision for MRM. Additionally, there are a large number of niche vendors; buyers should consider them -- but carefully, to be sure their niche offerings fit the requirements, Collins said.
Another consideration in buying marketing software is Software as a Service (SaaS). Companies often consider the SaaS model for the low cost of entry, ease of building a business case, budget restraints in IT or marketing, a need for faster deployment or faster ROI. Organizations should avoid SaaS if they have heavy IT involvement in their business processes, require deep marketing functionality, use complex process flows, have compliance requirements limiting their use of data or need lots of flexibility and configurability, Collins said.
Still, rolling out MRM may be a tough sell for one attendee at the CRM Summit. Marc Roberts, who supports marketing at the Canadian Tire Bank, said his business is investing but there are political challenges with marketing.
"We haven't been too scared about investing," he said. "We just finished investing in Unica and right now our energy is on BI. Our most recent investments have been around campaign management. The next phase for the strategic path I'm trying to take is key metrics that will fold into BI."