Business ecosystems are nothing new. Back in 1993, James F. Moore pioneered the idea of a business ecosystem in the Harvard Business Review. He defined these ecosystems as companies coevolving capabilities around a new innovation, that “…work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.”
That was over 25 years ago. Looking around today, you’ll see that business ecosystems exist all around us and come in a variety of shapes and sizes. From Apple’s ecosystem of operating systems, computers, apps, iPhones, iPads, music, and more, to Salesforce’s AppExchange and network of partners, ecosystems are a necessary development as businesses grow, evolve, and mature.
What’s new about business ecosystems today are the categories that now require this kind of cooperative and competitive drive in order to move forward. Following in the footsteps of established categories, a business ecosystem is now emerging in the relatively new technology category of account-based marketing (ABM).
So, how and why did an ABM ecosystem develop? What does today’s ABM business ecosystem look like? Let’s take a look at ABM’s development leading up to this point to understand what’s next for the category.
Up until a few years ago, ABM was more hype than reality. It was a strategy B2B marketers were talking about, but not actually doing. This hype might sound bad, but it actually turned out to be good for the category. It piqued both marketers and vendors’ curiosity in ABM. It allowed marketers to dip their toes into the ABM water. And instead of sinking, marketers swam. They saw great results and began doing more with their ABM strategy. In fact, according to a survey by ITSMA and the ABM Leadership Alliance, 99% of respondents reported a higher return on investment (ROI) from ABM than traditional marketing initiatives.
Meanwhile, vendors and venture capitalists saw this budding excitement and began to invest heavily in all things ABM. As a result, scores of solutions came onto the market to cater to an account-based approach. With the influx of new tools, B2B marketers could now target, engage, and convert their target accounts at scale. Add in artificial intelligence and machine learning to the mix, and all of a sudden, these solutions were faster and more powerful, accomplishing things marketers could only have dreamed of.
Then, last year, Forrester officially recognized ABM as a bonafide technology category with the Forrester ABM Platform New Wave. This ascent of ABM into the mainstream marked a turning point for the category. No longer the upstart experimental strategy employed by early adopters, expectations, and competition grew higher. By that time, according to Demand Gen Report, 50% of marketers found that their ABM programs were meeting all their organizational expectations, noting key benefits as efficient use of marketing resources, streamlined customer acquisition processes and a clearer path to ROI.
While competition is beneficial for an emerging category by driving innovation, the detrimental side effect is that the ABM landscape became a composite of disconnected point solutions. This fragmentation forced marketers to make do by stitching siloed solutions together to create their own Franken-ABM technologies. As a result, a lack of continuity of data permeated the ABM landscape and marketers had no feasible way to gather a complete view of their accounts and their activities. Just measuring results across the funnel became a herculean task. Data here, data there, it became an imperfect experience.
Enter the need for an ABM ecosystem. According to chiefmartec.com, there are over 7,000 martech solutions as of 2019, and the martech landscape has grown year-over-year by double or, originally, triple digits since 2011. As a result, the next phase of ABM as a category requires connecting these point solutions into a consolidated ecosystem and bringing the key pillars and functionality of a marketing tech stack together.
True technology integrations where data can be shared back and forth is key to the success of an ABM ecosystem. It’s about common data, shared audiences and integrated workflows across the ABM tech stack.
Ultimately, business ecosystems thrive because they help solve customer challenges. By integrating other technologies into an ABM platform, customers can more easily get value across their technology investment. The ABM category has now evolved to the next stage of productivity- moving from stand-alone point products to platforms that connect technologies, drive innovation and growth, and ultimately, create seamless experiences for the user. It’s a brave new world for ABM.
Peter Isaacson is the CMO for Demandbase. He can be found on Twitter @peisaacson.
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