Martech
Martech, short for marketing technology, is the software a marketing team uses to plan, run and measure its work: marketing automation, analytics, data, campaign and customer relationship management (CRM) tools. The term also covers the budget line that pays for them, which includes the integration, training and upkeep the tools need, not only the license fees.
How it is measured
Martech is usually tracked as a share of spend. The formula: martech share = martech spend ÷ total marketing budget.
Track it a second way too, as martech spend ÷ company revenue. The first shows internal allocation, and the second helps finance understand the business-level investment.
pedowitzgroup.com, What's the optimal martech spend percentage?
One practical benchmark is 20% to 30% of total marketing budget. For a company spending about 7% to 8% of revenue on marketing, that comes to roughly 1.5% to 2.5% of company revenue. Compare your figure with our martech share of budget benchmark.
pedowitzgroup.com, What's the optimal martech spend percentage?
Worked example: the real cost of one tool
Take a tool with a $50,000 annual license. It might require $30,000 in developer time to integrate and another $20,000 in ops time to maintain, making the real cost double the license fee. Budget the full figure. A plan built on license fees alone will run short.
ZoomInfo Blog, How to Build a Martech Budget That Proves Its Value
The usual mistakes
Renewing without review. Check spend at least quarterly and before every major renewal. One team audited utilization and consolidated duplicate tools. Afterward, martech spend decreased, but campaign speed, reporting confidence, and conversion improved.
pedowitzgroup.com, What's the optimal martech spend percentage?
When it matters to you
Expect the chief financial officer (CFO) to question this line. Report it in the terms finance uses: payback period, customer acquisition cost (CAC) and pipeline contribution. Lead with payback period, because finance cares about how quickly the investment pays for itself. Put those numbers in your board deck.
ZoomInfo Blog, How to Build a Martech Budget That Proves Its Value
Sources
- What's the optimal martech spend percentage?, pedowitzgroup.com
- How to Build a Martech Budget That Proves Its Value, ZoomInfo Blog
Written by the CMO Tribune Desk and edited by Lila Odinaev. Every factual sentence was checked against a passage on the source it cites. See how we work, or report an error on the corrections page.