3 crucial requirements for maximizing innovation budgets
Innovation is a word that’s thrown around constantly, but organizations have historically underfunded this critical area. While goals and expectations from management get loftier each year, things are changing.
According to Gartner, CMOs indicate that 16% of their budgets are now allocated to innovation, and 63% anticipate that number to rise in the next year. More than 9% of those CMOs feel that marketing innovation will be vital to the delivery of their company’s marketing strategy over the next 18 months, and while marketing leaders surveyed scored themselves an average of 2.2 (out of 5) for their innovation maturity, they aspire to be a 4.3.
While those stats are promising, there’s still reluctance by marketers to commit to innovation. (For the purpose of this article, I’m focused on marketers as a marketer myself, but this issue is not unique to marketers. Product owners, researchers and ad sale executives alike also need to take a hard look at how much – or frankly, how little – they’re allocating to innovation.) So where’s the rub? As a technology startup veteran, I can tell you the onus is on tech companies to prove value that marketers will receive with their innovation budget. If a tech company does their job, marketers look like heroes, and those innovation budgets will increase.
Here are three crucial requirements for maximizing innovation budgets:
Exciting and digestible technology
That same Gartner report shows nearly 1/3 of marketing budgets are allocated to marketing technology. Why? Simple – the solutions are easy to comprehend and to tie their investments to ROI. Email and search may not be the most innovative marketing, but it’s quantifiable and shareable in an executive summary to management. Innovative tech companies need to package their offering and lend those same benefits to marketers with innovation budgets.
Ensure the solution/s is tangentially different, how it works and the benefits to using it are clear, and it gives marketers confidence in circulating the technology to their peers. If tech companies can empower marketers to be an advocate, they’ve done their job.
Regardless of whether you’re vetting innovative martech, adtech, or madtech, always think about the data. There are hundreds of technology companies offering variations of the same thing and to be innovative is to learn something new. The learnings are the data, and the type of data must be unique.
VuPulse is focused on post-click marketing for entertainment brands, meaning we have insight into consumers’ viewing and shopping preferences after the click. We’re able to give a real-time look into those consumer preferences and allow marketers to apply that data to their digital advertising and marketing with ease.
It’s those distinct data points that marketers want to look for when spending their innovation budget, because new consumer insights will deliver a better business result.
A true partnership
This one sounds simple, but is often not the case with innovative companies. If the last couple of years have shown, transparency from tech company to marketer is rare. For years, martech and adtech have focused so much on scaling and margins that they lost sight of customer service. And marketers needed to quickly adapt to these new technologies that they looked past it. Those times are no more, and marketers need to ensure a real relationship when they spend dollars with innovation partners.
Whether it’s onboarding or monthly client meetings, marketers must establish an honest, open line of communication with their tech vendors. Spend the time to dig into the most minor of reports, invoices, and also get to know the individuals you interface with regularly. Some of the most innovative of technologies have shown a lack of transparency with their clients, and many of them are regretting it dearly. By pushing on the most innovative companies to be truthful, you’ll get the most from them.
Look, innovation is here to stay in marketing. That rich Gartner report shows that 1 in 6 marketing dollars spent on innovation, and that ratio will increase in the years to come. Marketers must understand the value, how the data can improve their business, and find decent people. The trifecta is not easy to find but they exist. When marketers find those companies, innovation will seem easy and the results will show value.
This content was contributed by Jason Wolfson, a marketing and startup exec helping build VuPulse, an intelligent adtech company. Jason is also a member of the Forbes Communications Council.