Where is marketing technology (martech) going? Good question. A lot has been happening with marketing technology this past year, and it doesn’t all point in the same direction.
For example, there have been an impressive number of acquisitions in the industry, suggesting greater consolidation. At the same time, though, the number of new products and arrivals on the martech scene keeps growing, which would suggest greater diversity.
Take consolidation. In just the first six months of 2019 the marketing technology industry experienced 246 mergers and acquisitions – a significant increase from the 162 in the same period a year earlier.
Most of them were smaller companies, acquired by larger martech firms to expand their capabilities and user base. Others, however, were acquired by the client brands themselves, including McDonald’s and Nike, to craft elements of more custom-tailored marketing strategies.
Martech’s ecosystem is growing rapidly. In fact, according to Scott Brinker, it has exploded from fewer than 200 solutions in 2011 to nearly 7,000 last year.
A survey by Gartner revealed that U.S. and U.K. marketers now spend more on marketing technology than on salaries for internal staff.
In 2018, 29 percent of their budgets, excluding media spend and agency fees, went to martech while just 24 percent went to paying staff. In 2017, those percentages stood at 22 and 27 percent, respectively. More is spent on marketing technology today than on advertising.
The dollar amounts are impressive. Forrester projections show spending on global marketing automation tech hit $13.4 billion in 2018 – a figure that was projected to nearly double, to $25.1 billion, by 2023.
And 42 percent of respondents to Chief Marketer’s 2019 B2B Marketing Outlook survey said their martech budgets would increase this year.
However, it’s also important to understand that the universe of martech is not monolithic. It includes categories of software, like Microsoft Office, that might not seem, at face value, to be primarily tools for marketing.
Brickner breaks them down into six high-level categories: Advertising & Promotion; Content & Experience; Social & Relationships; Commerce & Sales; Data; and Management – each of which can be further subdivided into more specific functional groupings.
Beyond that, different companies use their own distinctive mix of those tools, use them in different sequences, and apply them to different tasks. Industry standards are still at an embryonic stage.
But are those idiosyncratic patterns of products and applications nothing more than a reflection of today’s relatively early point in learning to use martech tools – a phase that will eventually lead to pretty much everyone using the same tools in the same ways?
Or does it reflect the distinctive topography of each market, the unique characteristics of each client, and conflicting philosophies of how people behave, in addition to the inventiveness of so many players in the martech space?
It’s worth noting, as Brinker points out, that factors apart from marketing needs have contributed to the proliferation of martech solutions. They include the growth of cloud service, open source software, microservice architectures, and more.
And besides, the barriers to market entry remain quite low – someone writing code on a laptop is still very cheap, although scaling it to commercial levels remains an uphill climb.
As a result, Brickner cites the claim by a Forrester analyst that there could be a million software companies worldwide by 2027.
But, as the authors of a Harvard Business Review examination point out, there’s still a big issue: although we have all this data, which is now more influential than ever, most people aren’t very good at interpreting or making sense of it.
A few years ago, The National Center for Education Statistics assessed the data-interpretation and problem-solving skills of adults in 23 countries, and found that the United States ranked 21st out of 23 countries participating.
As a result, today the responsibility for training has shifted from academic institutions to employers.
The data skills company’s need have evolved over the last five to 10 years. Today, much of the technical know-how that employers looked for in the past is embedded into data platforms.
As a result, companies are now searching for people who understand the nature of these data systems, how they work, and how to use them to create sound data governance, privacy, security, and trust.
So, where does that leave us?
Going forward, consolidation of the martech industry will continue, and the big players will become even bigger. But new entries into the market and specialized boutique players will also continue arriving.
Part of this martech push-pull comes from marketers’ demand for greater unification in their technology stacks.
We anticipate unification around data analytics and the consolidation of technologies into fewer platforms which will help to reduce redundancies, as well as shortening the learning curve needed to master different solutions. That should also help to limit the overall cost of ownership.
But as the demand for technical solutions continues to grow, select incumbents and new industry leaders will emerge to reduce the friction of conflicting products in the martech stack.
Although we expect to see continued acquisitions of marketing technologies and their consolidation into unified platforms, it’s important to keep in mind that markets, products, cultures and environments are dynamic.
The world will not be the same ten years from now. New conditions will beget new solutions and the pool of big industry players will continue to be refreshed by the influx of new ones.
Daryl McNutt is Senior Vice President, Marketing for TapClicks, with responsibility for development and execution of growth initiatives for the company’s marketing operations platform. A seasoned, dynamic and well-accomplished senior executive with over 20 years’ experience in digital technology and advertising, Daryl brings to TapClicks a combination of talents across marketing, analytics, research and business intelligence and a history of leadership at innovative startups, large agencies and top consumer brands.Reblogged 7 months ago from www.clickz.com