So, Q1 of 2023 is done. As Head of New Business - Digital Marketing, at Clarity, I’ve spent the last three months talking to global companies (mainly in B2B tech, SaaS, and software sectors) on a daily basis about their pain points and requirements, and how digital marketing can support their business goals. There’s no doubt it’s tough out there, but I’d argue there are also grounds for cautious optimism as we move into Q2.
A tough time for tech
First, some context. No-one could argue that the last six to nine months hasn’t been tough for the tech industry, particularly set against the rapid growth days of 2021 and early 2022. VC funding has dropped, startups have suffered, scaleups have scaled down, and many companies have sadly been forced to shut up shop altogether. Big tech has made big layoffs, and most recently the collapse of Silicon Valley Bank has sent shockwaves through the market globally.
But, this isn’t necessarily spelling complete doom and gloom. The rapid tech expansion during and after the COVID-19 pandemic was always likely to have a correction; while there may be less VC money flooding the market, it means that companies at all stages of growth are being pushed to be smarter about where they invest their time and money. Intelligent tech that solves human problems will always have a market. For now, while times are indeed tough, companies can navigate many of their immediate challenges with digital marketing solutions that provide both strategic long-term growth and ROI, and tactical short-term results.
We have been speaking with companies across various sectors as they change gears in light of ongoing economic uncertainty. We’ve found tech companies that support more traditional verticals like education, finance, energy, and property have been the most keen to invest in their growth at this time. Data management and cybersecurity firms have also held up in light of ongoing security and privacy concerns globally. Climate tech and HeathTech have both been areas where we’ve seen exploratory conversations taking place; it feels like only a matter of time before we see further investment there too. And of course the large language elephant in the room - AI - has seen massive disruption and growth which will no doubt run well beyond 2023.
With digital marketing, there’s no ‘one size fits all’
It comes as no surprise that tech companies at different stages of growth are looking for different things when it comes to digital marketing support. Larger, more established enterprise players are often looking for a very particular set of skills (typically not those provided by Liam Neeson in ‘Taken’, unless they have a real gripe with a competitor). They’ll often have larger in-house teams that know when they need, for example, deep SEO or analytics expertise, as well as credentials that demonstrate proof of concept, and a clear business case for ROI over time, as well as a good cultural fit that will enable the agency team and in-house team to work together seamlessly.
Startups and scaleups on the other hand are very often looking for short term performance impact, and digital marketing services that supercharge growth. With a shorter runway and a small (or non-existent) marketing team, they are dealing with different pressures and priorities. For these fast-growing firms, our support with a full-funnel digital content strategy, including activation and paid platform management to fill the pipeline can be a gamechanger. Alongside this, if they're at an earlier stage, their website UX and Conversion Rate Optimisation might also need work. This takes time and investment to do well so with smaller, scaling companies it’s about building a growth roadmap based on priorities and budget - and being realistic about what can be achieved in a short period of time.
Needing more, for less
Marketing teams are under significant pressure to deliver more - more services, more solutions, a bigger pipeline, higher ROI - whilst maintaining or even reducing the budget available. Same as it ever was? Yes - but in the current climate even more so.
Here are some of the key challenges we’ve been seeing.
Pipeline velocity has decelerated with the gaps between all pipeline stages growing longer. In B2B Enterprise tech, where sales cycles are typically longer anyway, this means weeks if not months are being added to deal lengths. There’s an undoubted cautiousness about signing off revenue - underpinned no doubt by the jitteriness of financial markets and general tech concerns. For marketing teams this can be frustrating as it’s often internal approval processes that are causing the delay, and with marketing usually focused on generating revenue for the business, this delay can have a serious impact on the bottom line.
A related point has been the challenge of getting all internal stakeholders aligned on a project. Remote working may have contributed to this; for example if the marketing and IT teams disagree on an approach, dispute resolution typically happens more quickly if you can get the key decision makers in a room together. That now takes longer, or issues end up being debated online, which is rarely the most effective way of finding a mutually agreed solution. Typically the best way to resolve this is to get key stakeholders from all relevant organisations on a video call (if F2F isn’t possible), with a pre-planned agenda that allows everyone a chance to contribute. This both expedites decision making and avoids the risk of key points getting lost in translation.
Finally, when in-house teams are at or close to signing off on an agencies’ budget, they will typically face pressure on the deliverables, along the lines of, ‘we like what you’ve proposed, but can you do it for 50% less’? Tougher negotiations, clear statements of work, and a level headed assessment of what the agency team can actually deliver, is needed to reach an agreement that works for both sides. It’s not always achievable, but the damage that a bad relationship can cause is hard to overstate. Both clients and agencies need to feel invested in a mutually beneficial partnership based on trust and respect from the start, otherwise things are only ever going to end one way.
I couldn’t end this article without mentioning ChatGPT, or if that’s now very 2022, maybe I should be referring to GPT-4. Interestingly, despite the hype, there isn’t as much VC capital flowing into AI as you’d expect. No doubt that will change in the months to come, and when we look back at Q2 in July it will be a different story. I would try asking ChatGPT for its assessment of the tech market in 2023, but as its data set ends in 2021 it’s currently not much use. However I suspect as far as its own future is concerned, it's quietly confident of being gorged with investment and data.
So while times might seem tough, there are always opportunities for companies who can take the long-term view, but also have the flexibility to pivot if something isn’t working. Testing and learning has always been important, but now it’s critical; accepting that the world is changing at speed, and adapting how you operate as a business to meet challenges head on, set the foundations for future success. All of this needs to be underpinned by a strong cultural approach of investment in teams and staff satisfaction, with the long term success of any company being predicated on the wellbeing of its people.
Are you a company looking to supercharge your next phase of growth? If so please get in touch - we’d love to have a real life chat.
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