Marketing Budget: 5 Ways to Optimize Your MarTech Spend

MarTech, short for marketing technology, encompasses the tools and software in your tech stack designed to scale marketing efforts and tackle challenges in data analysis, customer relationship management, messaging, collaboration, content creation, and more.

With thousands of MarTech solutions available, marketing leaders often struggle to decide where to invest. As of 2024, the MarTech landscape offered nearly 14,000 technology solutions, with projected growth of 25% by 2025. These tools span a wide range of categories, including advertising technology (AdTech), customer relationship management platforms (CRM), content and email marketing, SEO, collaboration, and data management tools. The sheer volume of options can overwhelm teams trying to identify the software that best aligns with their goals.

But before selecting the right tools, a critical first step is determining how much of your overall marketing budget should be dedicated to technology in the first place. Some companies calculate their marketing budget as a percentage of annual revenue, while others reverse-engineer it based on specific revenue or growth targets. Marketing budgets typically range from 1.5% to 25% of total revenue, depending on the industry and company goals.

Once the budget is set, the next challenge is allocating a portion of it to MarTech. A 2024 CMO survey revealed that CMOs allocated roughly 25% of their marketing budgets to technology. Given the complexity and significance of this investment, optimizing your MarTech spend is crucial for saving time, money, and improving team effectiveness.

In this blog, we'll share five actionable strategies to help you optimize your MarTech spend, ensuring it aligns with your marketing strategy, goals, and key performance indicators (KPIs). By fine-tuning this aspect of your budget, you'll not only streamline your tech stack but also gain a clearer understanding of how MarTech investments influence your overall marketing efforts.

1. Evaluating Your MarTech Needs

This first strategy is focused on building a better understanding of your digital marketing needs and identifying the marketing initiatives and goals for the company and for your team. The information you gather at this phase provides the foundational elements for making more informed decisions in the other strategies listed below.

Information to gather and decisions to make:

• Rightsizing
  • Determine user seats, licenses, and usage (contacts, messages, data rows, assets)
  • Assess necessary features (e.g. GenAI tools, multi-channel integrations)
  • Avoid paying for unused functionalities; consider customized packages
• Optimizing
  • Discover the needs of the team as well as the predicted ROI of tools
  • Prioritize spending based on those key elements
  • Check for overlap of features and functionality
• Reducing
  • Eliminate components with low user adoption or complexity without value
  • Reallocate saved costs to departments entering a growth stage

2. Cleansing and Scrubbing your Existing Data

A regularly measured metric that can affect the costs of your total marketing budget is the number of contacts that you maintain in your database. Examples of technologies that store and organize contact data include customer relationship management (CRM) platforms, customer data platforms (CDP), and email marketing and mobile marketing tools. 

It may be tempting to hold onto every contact that you have ever collected but depending on the technology package, having a few additional thousand contacts or records could burden your company with unnecessary expenses when these contacts may not add marketing value. There are best practices for approaching this challenge. You can either increase the marketing value of your database by re-engaging inactive customer records or save your marketing dollars by removing the unengaged from your dataset.

Maintaining a healthy target audience and dataset

Whether you want to negotiate a better contract with your current technology provider or you are looking for a new solution, they'll want to know the size of your database. In preparation, run a contact health check:

• Based on elements like your purchase cycle and average engagement patterns, determine a time when a customer is considered 'unengaged'
• Run a re-engagement program for the unengaged audience
• If they don't re-engage after a certain window of time, consider archiving them or removing them from your list completely
• Check for duplicate or similar records for example: J Smith, RCompany = John Smith, RCompany Ltd
• Have internal teams (marketing, sales, and support) clean and update their records highlighting any critical records

3. Evaluating Solutions and Key Integrations

Features and functionalities differentiate marketing technologies as well as the packages they offer. The information gathered in Phase 1 will help you assess the needs of your marketing teams and determine your requirements. Start with your key objectives and align the different technology solutions to those goals. When the time comes to evaluate, this list will help you analyze the different providers and qualify and disqualify quickly.

Establishing a list of required integrations

Of course, a streamlined, fully connected marketing stack is the end goal, but it's not always that simple. Even a robust marketing platform won't solve every one of your marketing needs. Your marketing stack will be a mix of multi-solution platforms and one-off point solutions. As you evaluate different options and optimize your MarTech spend, make your list of non-negotiable integrations. Do you rely on Snowflake or Salesforce or Hubspot and need everything to integrate well with one of those? Do you have a technical team who can help integrate if they only offer an API?

As you research and have conversations, see how they integrate with your preferred providers. Are they compatible with your existing marketing technology stack or offer alternatives included in their pricing and packaging? These all have associated costs that can help in optimizing your marketing budget.

Consider AI, automation, and cross-departmental functions

MarTech should support more than just one-off marketing campaigns. It has an opportunity to offer greater impact across departments and can elevate all marketing efforts through the use of automation tools and AI. Automation across marketing channels (like email marketing and social media management) can save your team time and improve the customer experience.

Artificial intelligence has become a buzzword, so it's important to understand how a technology actually applies AI, how it's incorporated into the product and the models it uses. It can support everything from the marketing workflow to holding conversations with customers. Clarify what is considered part of a product or package and what is an add-on. Also, additional functionality like AI can come with its own usage rates.

Reviews and market placement

Many companies are featured on review websites like G2, Forrester, and Gartner. These websites have customer reviews and key data points, evaluating how each tool stacks up against its competitors in the broader market. These review sites are a perfect place to find and assess tools that meet your needs, giving you invaluable insights from your peers. Use these additional inputs as you review your existing digital marketing budget, MarTech stack, and potential new providers.

4. Consider Alternative Financing Options

MarTech investment can come with expensive upfront commitments, which can be tough on cash flow, so spreading out payments over a manageable period is a really powerful option for marketing teams. You can save money, extend your runway, and improve cash flow by using solutions like Gynger to unlock the flexibility you ended with your tech bills. 

Two ways to optimize MarTech expenses with alternative financing

1. Access discounts when you pay upfront

Many MarTech vendors offer monthly subscription plans but provide significant discounts for annual upfront payments. With Gynger’s alternative financing, you can take advantage of these discounts by paying annually, while still enjoying the flexibility of spreading out your payments on terms that suit your company. This approach helps control cash flow more effectively: Gynger pays your vendor in one lump sum, while you repay Gynger in manageable monthly installments. Plus, the savings you gain from committing to an annual plan tend to be greater than the cost of our financing fee, netting you additional savings.

2. Streamline many MarTech bills into a single monthly payment

Marketing teams often juggle payments for several different MarTech tools, which can make it hard to track expenses and manage due dates. Gynger allows you to streamline all of your MarTech payments into a single, easy-to-manage monthly payment through one dashboard. This simplifies budgeting, helps you avoid missed payments, and gives you a clearer view of how MarTech fits into your overall marketing budget.

For example, companies like Driveway were able to save 15% on their software spend when using Gynger - read more to see how you could do the same.

5. Contract Review and Uncovering Hidden Expenses

Getting into the weeds of your MarTech contracts can help you uncover ways to improve, change, or remove elements of the contract to help optimize your marketing budget and expenses.

Some key areas to review in your contracts:

1. Included features and functionality

Ask your MarTech vendor to review with you all of the specific tools you have access to and the data usage across the tools. You might learn you can scale down to a lower-tier offering or scale up to an offering that better fits your needs.

2. Data Limits

Learn the data and usage limits of the technology within your marketing stack. It's important to fully understand how your selected plan and package will be affected by either consuming under data limits or over data limits. If you're not meeting your full data allotment, there might be an opportunity to reduce your marketing spend and allow you to focus it on other parts of your marketing strategy.

If you meet or exceed the data limits you will have to prepare and account for these expenses in the total marketing budget. If your data needs only just exceed a threshold and places you in a higher plan bracket, consider negotiating for a plan package that suits all of your operational needs, and pay for an add-on data fee. Cost structures for overages can be negotiated as well.

3. Customer Support

When leveraging technology, challenges inevitably arise and technical assistance may be required. Whether you've hit a snag with your regular marketing activities or you want to build something net-new, you will want some additional guidance. Depending on the tools you are leveraging, support services may be free or restricted past a certain point. If certain types of support are critical to growing your marketing program, consider targeted offerings versus paying for a full tier higher.

4. Onboarding

As a marketer, you already have an incredibly busy schedule, and onboarding a new technology will only add to that workload. MarTech varies in many ways when it comes to integrating into your marketing stack and onboarding will look different for every kind of technology. As you consider new offerings, be sure to evaluate onboarding timelines and any associated costs that may increase your spend.

Finalizing Your MarTech Budget

There are many factors to consider when calculating a total marketing budget. It can be representative of a percentage of your total company revenue or you can weigh the budget according to your focus areas and overall strategy. Assessing your team’s needs and goals will help you be more strategic with your MarTech investments as you assess which marketing technology is supporting you in hitting your targets.

To optimize your MarTech budget leverage alternative financing with Gynger and see how far your budget can really go.