Why Marketers Need a Tag Management System

A little-known industry until roughly two years ago, tag management is heating up. In 2013, a Forrester report revealed that 96 percent of marketers struggle with customer data integration, and with demand rising quickly, vendors have stepped up to the challenge.

Since last year, funding for new technologies has been free-flowing and acquisitions have been frequent. In November, one of Chicago's fastest-growing start-ups, BrightTag, secured $27 million in funding and soon after acquired Signal, a customer tracking solution, to strengthen its tag management offering. Ensighten, another tag management system (TMS) player, recently swallowed up TMS pioneer Tagman after securing $40 million in series B funding. And Tealium, which has thus far resisted the call to eat or be eaten, has been making waves as well—Forbes just named it one of America's most promising companies of 2014, and the Digital Analytics Association called it the Best New Technology of the Year.

"Tag management is becoming big, and at this point, there isn't really a way around it. It's evolving, and it should be on every CMO's mind," Andrew Jones, an analyst at Altimeter Group, says. But with a hefty overhead cost and little precedent, marketers are faced with a lot to consider before taking the TMS leap.

What Is Tag Management, Anyway?

From email campaigns to social platforms, marketers connect with consumers through various touch points. With vendors offering best-of-breed solutions that target different areas, marketers relying on multiple technologies that track specific parts of the customer journey are limited when it comes to piecing that entire journey together.

No technology vendor currently offers an all-in-one, fully integrated digital intelligence platform, leaving IT and marketing departments responsible for creating cohesive data ecosystems, Forrester analyst James McCormick wrote in a recent report. "The vast majority of organizations already have digital intelligence components in place from existing marketing and analytics efforts," he explains.

"Most organizations are more likely to retain existing solutions than take on the challenge and risk of replatforming and expecting new technology to integrate with the legacy investments. Marketers pursuing digital intelligence must cooperate with their technology management counterparts to assemble a platform from multiple technology components," he adds. That, however, is easier said than done.

Every solution that marketers deploy—be it a retargeting tool, a testing platform, or marketing automation software—requires that pieces of proprietary vendor code, called tags, be added and configured to the brand's Web, app, and email codes. Once embedded, the tags report on the user behaviors they are assigned to track, such as a click on a designated part of a landing page.

Though this works on a small scale, companies that rely on upward of 10 solutions find that as tags are modified or added and digital properties are redesigned, the code becomes too unruly to manage. This makes even the smallest updates challenging for IT departments, which means longer wait times for marketers. What makes it worse, however, is that even if the increasingly tangled web of code works perfectly, it's programmed to collect data on different user behaviors and compile it in disparate 

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