Whether a chief marketing officer (CMO) has $100,000 or $100 million in his or her budget, the question comes down to how the cash is spent. And according to a new report, spend is slowing with more pressure for marketers to prove returns.

Budgets have decreased from 12.1 percent of company revenue in 2016 to 11.3 percent in 2017, according to Gartner's 2017-2018 CMO Spend Survey. Marketing technology saw the steepest decline in investment between 2016 and 2017, with a reduction of 15 percent.

The technology, sometimes known as "martech,"is used by companies in various ways, including tracking customers' browsing habits on different devices and matching that behavior to buying. It can also be used to automatically place advertising on websites, a complex process that has been subject to fraud, and has also resulted in ads appearing next to undesirable content.

Gil Canare, Senior Research Director at SiriusDecisions, went over the steps to creating the business justification for technology investments. In the live poll from the presentation, over 80 percent of attendees said that their organization’s most common purchase driver is capabilities related. The need for new capabilities and to do more with technology is an ever-present issue for today’s fast-changing buyer needs.

Gil noted that with each technology purchase, there are there are internal and external purchase drivers, impacts to the business the technology will introduce, and ultimately a justification for the purchase. Internal and external drivers can help you to paint a picture of why you need a certain solution at a given time. Are there new capabilities that the company needs? Is there competitive pressure and your organization needs to implement new tools to keep you? Outlining exactly what the drivers of the purchase decision are is the first key step to justifying a new technology purchase.

There are a few key guidelines to justifying a technology purchase:

Get consensus on the justifications for the purchase across all stakeholders.
Apply consistency in the way you’re evaluating solutions, so all decisions made are rational and accurate.
Establish baselines for impact measurements, so all conclusions are consistent across purchases.
Review and optimize what your forecasts were and compare to your actual results in order to optimize your purchase.

Proof of Concept is a demonstration that something is possible. In the context of marketing systems, though, a POC is usually not so much an experiment as a partial implementation of an existing product.  What's being proven is the system's ability to execute key functions on the buyer's own data and/or systems. 

The cost of loading client data was the reason most vendors disliked POCs. Today this is much easier because source systems are usually more accessible and marketing systems – at least if they’re Customer Data Platforms – have features that make transformation and mapping much more efficient.  The ultimate example of easier data loads is the one-click connection between many marketing automation and CRM “platforms” and applications that are pre-integrated with those platforms. The simplicity is possible because the platforms and the apps are cloud-based, Software as a Service products.  This means there are no custom implementations or client-run systems to connect. Effortless connections let many vendors to offer free trials, since little or no vendor labor is involved in loading a client’s data. 

POCs are not quite the same as free trials because they require more effort from the vendor to set up.  In return, most vendors will require a corresponding effort from the buyer to test the POC system.  On balance that’s a good thing since it ensures that both parties will learn from the project.

What does a successful platform company look like?

You want to create a lovable platform, said Brinker. One that developers and customers alike love working with. Your business vision might be to build a platform that helps you grow your customer base, or grow revenues, but if the right foundation isn’t put in place, then Brinker said all those things are difficult to achieve.

There are a few ingredients that go into a lovable platform according to Brinker. The first is that it’s the platform’s responsibility to create an attractive market for third-party developers. It must be a large market, and it must have unmet needs. Here he noted that HubSpot is in this position. It has 34,000+ installs and a large expanding base. It also has unmet needs, one of which is video.

See what B2B buyers say about the factors that most influence their purchase decision according to this recent research. If you're a vendor, there's some juicy intelligenc

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When it comes to who’s involved in the marketing technology buying process, you would think that complexity would breed more inclusion.

Buyers of marketing technologies rank demos, test drives, and self-driven online research as the most valuable methods for evaluating martech products or services. Check out details of this study.