The 2023 growth marketing report deep dive: Tech edition
It’s no secret that the tech industry has had a tough time over the last year-plus. After a tumultuous 2022, a year marked by significant layoffs and investment pullback, technology businesses have continued to maneuver through a shifting market and uncertain economic climate.
While organizations as a whole must grapple with this challenging and rapidly evolving landscape, tech marketing teams face increased pressure to perform, stand out from competition, and deliver extraordinary experiences for their customers — all while dealing with decreased budgets and high ROI expectations.
For our annual Growth Marketing Report, DEPT® surveyed 150 technology marketing leaders, from companies with revenue ranging from $100 million to over $1 billion, to get inside the heads of those who are actively navigating this tricky environment. What we discovered is that tech marketers may be missing out on significant opportunities to amplify their brands, provide value to their customers, and remain relevant long-term.
Let’s delve into the state of digital marketing within the technology sector and five ways marketing leaders can drive organizational transformation by prioritizing growth marketing practices as they round out the year and plan for 2024.
Turbulence for tech marketers
To combat increasing expectations and shrinking budgets in 2023, we’ve seen tech marketers over-prioritizing lower funnel activities, rather than taking a growth-focused, full-funnel approach.
It’s not uncommon for brands to shift their focus to bottom-of-the-funnel (BOFU) marketing efforts when the business climate is tough. These activities, like paid search, often feel like quick wins in a last-touch environment — but over-investing in them leaves marketers vulnerable to missed opportunities, limited audience reach, and fewer customer insights. Although much simpler to attribute ROI to BOFU marketing activities, performance marketing is not enough to drive sustainable growth, especially in an increasingly crowded and competitive industry.
Additional challenges that DEPT® has seen tech marketers face this year include:
- Providing differentiated, effective, and value-based content in a marketplace of similar products and services.
- Identifying and executing innovative strategies while digital marketing technologies and channels are rapidly evolving.
- Reducing silos between sales and marketing teams to ensure alignment with each other and overall business strategies, while creating a seamless customer experience.
- Measuring ROI and proving the effectiveness of marketing channels and campaigns that don’t always have a straightforward impact on lead generation, sales, or other business metrics.
Going forward with growth
There’s no one-size-fits-all solution for technology marketing teams. However, there is the growth marketing approach, which involves taking a full-funnel strategy that focuses on three essential growth drivers: strategy and planning, analytics, and creative. When these growth drivers are executed in alignment, tech marketers can outperform their competitors, maintain sustainable growth, and drive incremental value for their brand.
DEPT®’s survey revealed that while 40% of technology marketers understand the concept of growth marketing, the majority remain heavily focused on solely performance marketing activities alone. And among the 40% that grasped the idea of growth marketing, only 13% implemented the mindset within their organizations. This is a significant drop from the 27% reported last year.
This doesn’t have to be the story in 2024. As planning for the coming year commences, tech marketers can implement the following strategies to fuel their growth marketing practice and set up a pipeline for sustained success.
1. Deliver value with organic content
The Growth Marketing Report shows a heavy reliance on paid social and paid search, two channels that can quickly see diminishing returns. Tech brands can complement these efforts and consistently increase impressions and engagement by putting additional focus on their mid-funnel organic content and SEO efforts. Strategic, well-crafted, and optimized content allows you to capture wider audiences and grow awareness, gives users an easy point of entry to engage with your brand, and is an effective means to build trust and authority.
2. Invest in brand and creative
As one of the three essential growth drivers, audience-centric creative plays a vital role in facilitating a seamless customer experience. But out of the three growth marketing pillars, tech marketers are putting the least investment toward it. When budgets are strained, creative and content often seem like the obvious place to cut back on spending — but investing in creative upfront will allow you to reduce your media spend later in the funnel. By prioritizing the development of a unified brand experience, your performance marketing efforts will perform more strongly, customers will connect more deeply with your brand, and your bottom-funnel dollars will be used more efficiently and effectively to drive conversion.
3. Unlock untapped potential with conversion rate optimization
Across technology businesses of all sizes, conversion rate optimization (CRO) is deeply underprioritized. Although tech marketers tend to invest in a wider variety of marketing channels than those in other verticals, they’re missing out on potential value that could be generated from existing traffic. By investing in additional testing and optimization programs, these teams can create more seamless user experiences that don’t lose audiences on the critical pathway between acquisition and conversion.
4. Stop neglecting mid-funnel nurturing activities
Tech products and services often involve a long and complex decision-making process. Especially for business-to-business tech companies, the buyer’s journey can span several months. This means mind-funnel marketing activities are absolutely crucial — and, based on our research, often under-prioritized.
The mid-funnel serves as a critical stage for educating potential buyers about your product or service’s features, benefits, and advantages. Neglecting to nurture audiences in this phase can leave prospects uninformed and result in missed opportunities. A balanced approach to the mid-funnel helps improve lead quality and higher conversion rates, leading to long-term business growth and success.
5. Drive decisions based on holistic data
Marketers are inundated with data, and our survey indicates that 42% of tech marketing teams are investing in analytics and 39% in data science. However, effectively managing and analyzing the right metrics to make informed decisions remains both a challenge and a necessity. Too often, tech marketers focus on short-sighted KPIs, like driving down CPAs and increasing ROAS. Instead, teams should shift their priorities to tracking growth metrics, including customer lifetime value, market share gains, and brand equity. These data points allow tech marketers to better understand their positioning in the market and evaluate the long-term value of their customer relationships, which allows them to execute more effective campaigns across all stages of the purchase funnel.
Evaluate your growth marketing practice
Growth marketing is an innovative approach to traditional marketing that intentionally blends brand and performance. It’s marked by its long-term focus, alignment with broader business objectives, and full-funnel investment. Over the last several years of publishing our Growth Marketing Report, we’ve seen tech marketers increasingly understand and embrace the mindset. However, implementing these practices takes time and is more of a journey than a flip of a switch.
We developed a custom measurement and ranking system called the DEPT® Growth Marketing Maturity Index™ (GMMI™) to assess how well marketing leaders have implemented a growth marketing approach within their companies. We evaluate brands based on six pillars — strategic approach, data management and activation, management buy-in, in-house resources, agency support, and integrated customer experience — to determine their current growth marketing maturity, from Laggard (least mature) to Disruptor (most mature).
Ultimately, the maturity score tells us where a brand falls in its growth marketing journey. In 2023, the majority of technology marketers surveyed fell in either the Performer (46%) or Transformer (41%) categories.
You can think of Performers as “middle of the road” – brands that have an established performance marketing practice but need to make improvements quickly or else face diminishing returns on their marketing investment. Transformers are a bit more advanced and have started to implement some growth marketing measures, like outlining a formal, full-funnel plan with goals tying back to the broader business vision and strategy.
Find out how your brand compares to other companies within the tech industry and dive into even more data and insights from our 2023 Growth Marketing Report.