This blog was adapted from BrandMaker’s: “Marketing Ops Now” podcast. Each installment discusses valuable ideas for both management and marketing executives. You can listen to this 20-minute podcast here.
There are multiple reasons why navigating Martech is a big topic for m. And the truth to be told: the topic isn’t getting any smaller. ‘Buy first, think later’ seems still a very often used approach for acquiring new martech solutions (for a further discussion, access 4 challenges for marketing ops: Marketing Tech Monitor 2021).
Martech consolidation, acceleration, or atomization?
We see that Martech solutions on average are being replaced every six to nine months (Marketing Charts), call it Martech Acceleration. Over the last decade the number of Martech solutions has exploded (Chief Martech), call it Martech Atomization. For many years, Martech Consolidation was expected, through shake-outs or merger & acquisitions. But the numbers show no sign of that.
However, one might argue there is a consolidation happening on the Consolidation of platforms in the sense of that some core pieces are often used as the foundation of stacks. A relatively small set of platforms act as technological foundation. Beyond that platform marketers start looking at more specialized capabilities in specialized solutions.
Those more specialized capabilities are generally not solved by the larger suits. This is where you end up in the wondrous variety of software startups and innovators. Yes, finding a way to get the best of both worlds can be truly challenging.
Gradually, the evolution has taken place from relatively closed suites, to more open platforms as the core stack foundation. This core foundation serves more and more as a basis to add, change, or remove solutions. Therefore, flexibility is needed to be able to plug and play, swap things in and out, or remove tools. It boils down to the question: “What is the core stack made of and what is the shell around it?”
PACE layered model
This is where the PACE layered model from Gartner comes in. It is a 20-year old IT framework, but still a good start for somebody to start navigating martech before even evaluating individual solutions.
The PACE model has three levels: system of record, the system of differentiation, and the system of innovation.
System of Record
- Run the Business
- Support Current Revenue
- Replaced once every > 5+ years
System of Differentiation
- Grow the Business
- Support 3-Year Strategy
- Replaced once every 2-3 years
System of Innovation
- Change the Business
- Support Growth Hacking
- Replaced once every 2-3 months
Systems of record
System of record is not just a system managing the customer data, it’s also the orchestration of the entirety of marketing. Traditionally we think of marketing automation or campaign management. But there are other sets of data to be managed.
One of them is content and . Much of the explosion of innovation has to do with Content, digital asset management, Headless CMS, etc.. All of this should be considered as part of the core foundation.
And then there is a third system of record. It is around the operational data. Think of marketing resource management, performance tracking, campaign orchestration, aligning agencies, automating marketing activities.
These three types of system of record feed their data into measurements and KPI frameworks (reference to KPI Framework ). They are therefore critical tracks for measuring marketing .
Systems of differentiation
The system of differentiation is largely about things that are very specific to how your business operates and to the very specific experience you were delivering to your customer.
These systems should deliver a customer experience personalized to the user. To set the experience apart from competitors, systems of differentiation are less about buying new technology off-the-shelf and more about customization. You want the ability to do some light customizations to be able to shape that unique user experience.
Here is an example. The CMS is a system of record, right? It’s a core foundational platform, but the actual website, an experience you build on top of that, is highly specialized to your business. It’s going to have different services, such as product configurators or dealer locators.
No code tools are enabling greater differentiation on top of your core Martech stack for exactly that reason. No code tools because I think they are enabling greater differentiation on top of your core Martech stack for exactly that .
Systems of innovation
Around the shell of systems of record and even differentiation, there is a layer of constant experimentation. Systems of innovation explore specialized capabilities beyond the core foundation. No surprise that probably in this layer, the rate at which companies replace tools is picking up pace.
These specialized tools are these innovative new capabilities that companies are experimenting with because for the market keeps changing for your company, competitors and customers.
This is where smaller freemium tools come in, as well as low code and no code tools. These solutions allow marketing ops to conduct quick experiments.
To centralize or decentralize martech?
Who decides on what martech should be purchased and used? That brings us to one of the most fascinating topics about martech – the balance between centralization and decentralization. A CFO once joked that his McKinsey consultants advised them to centralize every odd year, and to decentralize every even year.
To be fair, there is value to having centralization, control, and standardization, but there’s value too in decentralization. Having a decentralized ability to create in local area marketing and the agility to adapt and pursue very specific opportunities can be groundbreaking.
The game is to balance these two things and constantly re-evaluate if the company is realizing maximum value from the entire system. To some extend it is almost a little bit cyclical, where there are times where you lean into really strengthening the centralized capabilities. And then there’s times where you focus a little bit more on how do you empower the decentralized capabilities.
In essence, centralization has two responsibilities. One responsibility is establishing those guardrails, a governance framework, making sure that there’s compliance and a certain level of standardization and control. But there is also the responsibility of those centralized leaders to empower decentralized agility and innovation.
Please join us
BrandMaker’s “Marketing Ops Now” podcast series has officially started. In each podcast industry luminaries and deep thinkers share valuable marketing ops ideas for both management and marketing executives (some worth stealing).
For every podcast in the series we’ll do a blog post to share the highlights with you. You can listen to this 20-minute. podcast here.