Campaign India Team
Mar 27, 2024

Marketers uncertain about ROI from martech tools: Report

The report also finds that while spend on martech is growing, brands are still looking for partner support to help guide budget allocations

Photo: Shutterstock
Photo: Shutterstock

Mirum India and VML, part of the WPP Group, have launched the fourth edition of their report on the martech and commerce tech landscape in India. Building on insights from previous editions, the increasing role of online commerce prompted the expansion of the scope of the report to include commerce tech this year.

As per the report, 65% of brands are now investing more than 16% of their budgets towards martech, compared to only 18% of the brands doing the same in 2023.

Globally, martech spend is estimated to be 30% of the average marketing budget. The report suggests that while India still remains behind the global averages, the growth since last year indicates that the gap now seems to be diminishing.

Amit Doshi, CMO of F&B brand Britannia, said that martech tools make up a small percentage of spend, but it’s a “vital investment” to be made.

“Many look at marketing technology or automation costs as expenses, but I would argue and encourage them to look at marketing technology and automation costs as investments to improve overall productivity and outcomes,” he said. “As far as Britannia is concerned, we are very focused on the areas in which we want to automate, where we want to build, and improve effectiveness and productivity. And we will continue to make choiceful investments as we go.”

According to the report, martech spending is poised to increase across company sizes and sectors, indicating martech as a high-priority growth area in the coming years.

In the last two editions of the same report, the cohorts ‘martech heroes’ and ‘martech explorers’ were dominant. The ‘heroes’ comprised companies that extensively deploy martech tools, and the ‘explorers’ rarely or never used martech tools, but would increase their spending substantially or somewhat in the next three years. Looking at Mirum’s marketing quadrant for 2024, both ‘heroes’ and ‘explorers’ continue to make up a vast majority of respondents.

Technology, as an answer, seems to have made an upward shift by 16% as compared to last year. Perhaps, technologies such as GenAI, that are known to make wonders using prompts have brought this change.

Over 50% of brands also looked at brand loyalty and brand building as top objectives to be achieved using martech, perhaps due to these objectives being closely mapped to marketing leaders' KPIs. IT and tech as well as consumer durables emerged as the top two industries with brand loyalty as the top objective, while F&B or food tech, and media and entertainment are the top two industries looking at sales as the top objective.

When it comes to challenges using martech tools, a majority of marketers point to choosing the right tools for their business as a main issue, followed closely by the often-complex processes of implementing these tools. Thirty-five percent of respondents cite uncertainty of ROI as a challenge. Industries struggling to get personal identifiable information (PII) on consumers—such as FMCG—were more concerned about ROI.

Meanwhile, commerce tech emerged as a strategic growth driver, reflecting its broader applicability beyond just the ecommerce sector. Product-driven industries including F&B or food tech showed higher alignment with digital commerce, while sectors reliant on in-person experiences such as education tech and healthcare opted for physical channels.

The report showed that direct-to-consumer and social commerce are the leading go-to-market approaches employed by brands. Meanwhile, 60% of companies under 500 employees strongly favoured social commerce, versus building owned infrastructure given the lower barriers to activate. Only 15% of pure-play marketplaces use social commerce, indicating that third-party platforms are not a dominant choice to grow online presence.

To add, nearly 50% respondents said they use Gen AI in some or full capacity, indicating that it’s seen as a pivotal tool in organisations’ growth journey. Gen AI sees gradual adoption with close to 20% respondents considering it integral to their overall marketing strategy.

“The widespread adoption of AI-generated content presents both opportunities and challenges,” said Babita Baruah, CEO of VML India. “I feel theres a perception challenge regarding AIs potential to replace creativity, its more about complementing and enhancing creative outputs. Instead, it should be seen as a partner, augmenting creative processes. However, legal complexities surrounding ownership rights and usage rights remain a significant challenge. Once these are clarified, it can transition into an opportunity. However, as brand-specific AI solutions emerge, thereis  potential for safer experimentation and broader adoption.”

Source:
Campaign India

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