The Martech ROI Dilemma: Growing Spend, Disappointing Returns, and the Need for an Integrated Business Development Strategy

Highlights from the 33rd edition of The CMO Survey, directed by Professor Christine Moorman of Duke University’s Fuqua School of Business.

Business Growth Against the Odds (DALL-E)

The Promises of AI in Marketing

Since the arrival of Generative AI technology Martech has been seen as the early adopter promising new levels of customised customer engagement and data analytics. This is reflected in the survey showing an increase in Martech spending:

• Actual marketing spending levels have risen. Digital marketing spending continues to increase, up 3%+ from a year ago to 11.1%.

• Marketers predict increasing spending by 12.7% over the next 12 months. This compares to overall marketing spend growth of 5.8% in Autumn 2024 and projected growth of 8.6% over the next 12 months.

• Drilling down, all marketers expect to spend more on customer relationship management (+ 6.9%), customer experience (+ 5.6%), branding (+ 7.0%), new product introductions (+ 8.1%), and new service introductions (+ 4.3%) in the next year.

The Honeymoon appears to be over

The survey also shows signs of recognition that new AI technologies do not create value over night causing a slow down in technology adoption:

• Only 50% of Martech tools are used in operations, down from 56% in spring, despite Martech’s close connection to marketing functions.

• Fewer CMOs are focusing on strengthening data strategies and reducing data silos, declining from 51% to 48%.

• Marketing experimentation has also decreased, from 35.6% to 32.7%.

Across sectors, companies are 5.8% more likely to cut expenses than to grow revenues, on average. Marketing is disproportionately impacted; 44.6% of the time executives cut these expenses over other areas. As a result, marketers will face continued pressure justifying budgets and any spending increases moving forward

Are we seeing just another example of over-hyped technology and the resulting recognition that sustainable revenue growth needs a more comprehensive business development strategy?

CEOs and sales leaders often feel frustrated when significant sales and marketing investments do not yield the expected pipeline growth. True, sustainable growth comes from a balanced, interconnected approach that combines multiple facets of development, from creating valuable content to delivering on customer expectations. This is where the Business Development Continuum comes into play—a holistic model encompassing all the stages of business development in a continuous, self-reinforcing loop.

The first step is about stock taking by comparing the entire footprint an existing business development strategy with best practices in the B2B industry.

I help CEOs and Sales Leaders achieve consistent sales pipeline and revenue growth through integrated sales marketing and business development strategy.

Written by Thomas List, T.L. Advisory