As the Consultants at TKM spend more time with their clients reviewing, analysing and understanding the hugely complex and fragmented MarTech space, it is abundantly clear that the speed of growth of the technology vendors has significantly surpassed the speed of adoption for both Corporate Marketing Teams and their Agency counterparts. Is this sustainable?
“”The marketing technology (MarTech) landscape continues to evolve at a lightning speed, driven to a large extent by a vibrant ecosystem of new start-ups pushing, in some cases, seriously disruptive innovation. The truth is, very few companies really understand the modern marketing landscape. It’s evolving so rapidly, and thus finding a good explanation of how all the parts fit together is a challenge, to say the least” (MarTech Advisor)
Market Size and Description
The number of technologies in the sector is doubling year on year. According to Scott Brinker there are almost 2000 software vendors in over 40 different categories.
The less mature, more diverse growth phenomenon of Marketing Experience technologies has layer upon layer of technology capability, with a deep focus on Mobile, E-Mail, Social, Video, Content, Customer Experience, Display, SEO & Influencer Marketing.
The slightly more mature Marketing Operations technology set has a primary focus on Digital Asset Management, Marketing Resource Management, Web Analytics, Channel Marketing/Localisation and Business Intelligence. We are certainly seeing a resurgence and repositioning of Digital Asset/Content Management, as effective Omni-Channel marketing becomes a critical “must have strategy” in 2016.
(TKM have created a glossary of terms for the various software descriptions, please get in touch if you’d like to discuss what they all mean!)
The amount of investment in this sector is frightening, Venture Beat claim $134 billion has been invested in this industry over the past 5 years ($64B of that in the past 2 years), and now employs 300,000 people, with 26 companies valued at over $1 billion.
According to the IDC, Marketing departments are expected to spend more than $25 billion in 2016 and more than $32 billion in 2018 on marketing software solutions. The challenge for many Marketers is, to quote Donald Rumsfeld, “There are things that we know we don’t know…. And things we don’t know we don’t know”. That is to say many marketing departments are unaware of the technologies available to them, so investing is of course a challenge, but even when educated, there is still a huge risk around the effectiveness of many these software solutions, as many are early stage, unproven and disruptive. Ideal for brands fixated with “early adoption” but high risk for brands that are “late adopters” or even “laggards”.
Consumers Are Driving the Agenda
Consumer demands, ultimately, are at the centre of MarTech innovation. Without the consumers thirst for effective brand engagement, many of these technologies would be obsolete. Consumers are now more knowledgeable, collaborative, demanding, empowered and engaged than ever before. Whilst incredibly exciting for analysts like ourselves, there are considerable challenges for the target audience when a tech sector grows at such a rapid pace. The speed of market development is merely trying to keep up with consumer activity. This, however, is proving challenging for CMOs and Agencies alike that need to define, then invest, educate and finally deploy their own MarTech Ecosystem.
Brands and Agencies Need to Respond Quickly
Brand Marketers are overwhelmed, desperately searching for answers as to what MarTech they need, why they need it and how do they manage it once in their business. A study published by Ascend2 in 2015 revealed that only 9 percent of marketers have all the tools they need and fully utilize what they have, whilst 59 percent of those surveyed say they don’t utilize the technology they have at their disposal.
The old adage that “No one got fired for buying IBM” unfortunately does not translate to the MarTech sector, as there is no dominant player across all our categories, and those that claim their platform can support marketing across customer experience and marketing operations must be put through effective due diligence.
Advertising Agencies are naturally getting defensive. Creativity, not technology, is at the heart of their business, but they know they need to engage with these technologies to drive customer experience. More often than not, time and budget are preventing effective education. Many agencies are looking to acquire the relevant skills in house or partner with specific tech businesses, but are concerned about getting into bed with a single supplier, within such a fluid market.
Private Equity firms are throwing money at these technologies in the hope of discovering the next Unicorn. Market share, rather than profitability, continues to dominate as the marketing fraternity play catch up.
Develop Your MarTech Eco System
It is critical that in in the next 12 months, every brand and every agency have a MarTech plan. Conduct that MarTech Audit you’ve had pencilled in for the past 18 months. Determine the gaps in your MarTech Ecosystem and ensure it is clearly aligned to your consumer’s needs, your primary marketing channels and those channels that require greater attention. Dedicate time to educate your marketing teams on the various tools at their disposal. Cloud based software ensures we can utilise technology in a more flexible, affordable way. Accept some technologies are suitable for certain campaigns and brands, but not others. Hosted software, in the traditional sense, was driven by the IT Director’s “Agenda” which is less relevant with every day that goes by, especially as “infrastructure as a service” becomes common place in 2016, reinforcing the integrity and security of cloud based software.
The Marketing Director’s agenda should be one of responsiveness, automation and instant commercial returns.
MarTech is at the heart of digital, mobile, social and video advertising. The consumer is demanding a seamless experience, only made possible through a joined up technology roadmap, working for your business across all channels, providing automation, analytics and ultimately engagement.
2016 will definitely see a level of maturity develop for all businesses investing in MarTech, don’t get left behind.
TKM Consultants work with Brands and Agencies in relation to their technology needs, advising on which technologies best suit their business and support their implementation.
Further information can be found at www.tkm-consultants.com