Latest report from Arktic Fox finds Australian brands are tackling growth and budget concerns amid turbulent economic climate with privacy requirements, digital transformation and investment in customer data platforms key priorities.
To access the report visit: https://www.arkticfox.io/digital-marketing-in-focus
Economic uncertainty has fuelled a seismic shift for Aussie brands to refocus on growth and measurement with investment in customer data platforms (CDPs) and tackling changes in privacy regulations remaining top of mind for marketers, according to the Arktic Fox Digital and Marketing In Focus Report.
Now in its third year, and formerly known as the Marketing State of Play study, the report, developed in conjunction with Six Degrees and in partnership with Amperity, interviewed 230 marketing, digital and ecommerce leaders across Australia. It unpacks how marketing priorities are rapidly changing in today’s competitive, data-driven and customer-first environment.
Growth tops list of priorities, but budgets are slashed
The growth agenda for Australian brands is one of the top focal points for 78 per cent of digital and marketing leaders and their teams in the year ahead, above developing their first-party data strategy (55 per cent) and brand development and embedding brand purpose (54 per cent). Growth has moved to top the priority list since last year, showing the impact of challenging economic conditions.
Despite growth being high on the marketing agenda, some 60 per cent of respondents struggle with resourcing and budget constraints, and more than a third (35 per cent) of respondents report their budgets being reduced over the past 12 months.
Balancing short- and long-term priorities remains the primary challenge for two-thirds of respondents, demonstrating the delicate balancing act leaders must perform to deliver rapid performance outcomes whilst also building a vision for the future.
“Given the pressure to grow with budgets being slashed, marketing and digital leaders must now be laser-focused on priority areas and investing for impact. In fact, over half of respondents say better measurement and testing, learning and optimising are the focus in the year ahead to improve performance across their operations,” says Billy Loizou, Asia Pacific Area vice president, Amperity.
Industry remains underprepared for looming privacy changes
Significant change is looming on the privacy regulatory front, and it appears that leveraging third-party cookies may no longer be an option after this year. Despite these shifts, when asked about the key priorities leaders have in the data and analytics space across the next 12–18 months, less than one in four (23 per cent) suggested that a focus on improving their compliance with data privacy was a priority.
Meanwhile, less than half (41 per cent) of brands indicate they have their house in order when it comes to privacy and consent, suggesting many brands will be caught off-guard by the magnitude of change that will bear down on the industry. Concerningly, only 11% of businesses from the study say they have a ‘clear plan and path’ they are implementing when it comes to evolving and adapting to changes in privacy and consent.
This finding suggests that leaders may not fully grasp the extent of the changes that will occur and the urgency of preparing for them.
Even more, a capability gap in data and analytics skills is holding back businesses and remains a key barrier to effective technology adoption. Data and analytics is the biggest technical skills gap identified within teams, consistently topping the list for three consecutive years with measuring performance and outcomes also featuring prominently in the list of skills gaps. In fact, almost half (47 per cent) say that data and analytics are the biggest technical skills gaps in their team, and only 35 per cent of leaders believe data literacy is strong within their teams.
However, more than half of leaders say customer data strategy and better utilisation of first-party data is a key priority. In fact, 59 per cent say they are still trying to embed a more data-driven approach to marketing, and half of respondents (55 per cent) say building a customer data strategy and better utilising first-party data is a top priority. This demonstrates a significant gap between business priorities and capabilities to adapt to the rapidly shifting data-driven marketing landscape.
The growing demand for CDPs in the martech stack
The demand for CDPs has almost doubled from last year (21 per cent to 40 per cent) with more respondents prioritising investment in this part of their martech stack in the next 12–18 months, even as overall martech spend is softening.
CDPs are also now recognised as a business-wide tool to bring data quality (61 per cent say they need to improve this) and drive personalised experiences (64 per cent say this is a key priority). CDPs play a critical role in fostering a data-first culture by serving as a trusted, agnostic source for both IT and Marketing teams.
However, platform integration remains the biggest challenge teams face with 35 per cent identifying this as a top concern when it comes to managing the martech stack. The report also finds that martech strategy and implementation is the second biggest skills gap within teams across the country (38 per cent).[Text Wrapping Break][Text Wrapping Break]“Privacy regulations and how data is managed/governed across an organisation are being discussed by the C-suite, but teams are failing at understanding what to prioritise. I find it concerning that the number one investment above CDPs is still marketing automation (48 per cent) because the technology hasn’t really evolved in that space,” says Loizou.
“Further investing or replacing your marketing automation platform for better ‘drag and drop’ solutions will not solve your messy customer data problems, yet that category still leads the martech investment focus for the next 12-18 months. There is a critical need for CDPs to truly solve the messy data problem and increase an enterprise unified view, which will also solve business-wide challenges – not just activation challenges.”
Teresa Sperti, Director of Arktic Fox, says, “Alignment is critical. Marketers and digital professionals need to connect the martech ecosystem to back-end platforms and ensure connectivity between platforms to drive results from their martech stack. Developing an effective partnership with IT to deliver common outcomes is key to embedding and integrating platforms and delivering ROI as is building internal knowledge and capability within the team.”
Executive teams holding back digital transformation
For organisations generating in excess of AU$100m in revenues, digital transformation trumped brand development and embedding brand purpose as a key priority with 55 per cent of leaders suggesting it was one of their top priorities in the year ahead.
Although digital transformation has numerous advantages for businesses, nearly 40 per cent are struggling to implement it due to insufficient backing and expertise from their executive teams. This indicates that skepticism, fear and knowledge gaps among senior leaders are hindering essential initiatives and impeding progress.
“Today we still see far too many leaders believing that digital is someone’s role as opposed to digital capability needing to be embedded across the organisation to become central to the business strategy and operations. When a separate digital or ecommerce function exists that is siloed from the rest of the business, it sends a message that understanding digital is not my job or responsibility and stifles teams’ ability to build capability and develop skills,” says Sperti.
“Organisations that understand digital and technology at an executive level will win the race to talent and the customer. Investment and resourcing are needed in these departments. And the irony is, data is the language of the executives that will drive the flywheel for further investment,” says Loizou.
“The divide between the technology landscape will continue to bring the CTO and the CMO together. The CTO is now very aware that the marketing technology use cases don’t just sit inside marketing. Rather, they are intertwined with other areas, such as business insights and analytics, data science and teams assisting with merchandising and financial forecasting – all of which aid in uncovering insights that promote business innovation.”
