Once I heard a complaint from a software architect that it is becoming extremely hard to catch up with new technologies – they are springing up like grass, and before you take them on, they dry up, while new technologies are taking their place. What is most important, not only young and brave start-ups contribute to this accelerating “circle of life”, but even IT-behemoths like Microsoft or Google. These leading companies develop and test new platforms, and then discard as soon as they are demonstrating insufficient feasibility or market potential. So defining new paths and guessing which technologies will become “the new black” is often just playing dice.
But in the area of marketing technology, it is even worse. Everyone seems to survive. Neither natural selection, no natural disasters can restrain diversity and population growth of new species. So our greatest challenge is to navigate through the profusion, learn and be fast enough to adopt new technologies before competitors do.
Non-surprisingly, while Chief Marketing Technologist blogger Scott Brinker is humorously commenting his work on 2016 marketing tech landscape, he shared an important insight. Though he always seemed more than aware of the abundance in the industry, he said, “I underestimated the number of marketing technology companies out there today”.
Isn’t it fascinating? For the last decade, we observe a growing number of martech companies, and it would be logical to expect this exponential rise to slow down. But year after year, it is not happening.
This situation also fulfills a prophecy made by Brinker two years ago. He came to a counter-intuitive conclusion that despite a well-known business pattern, marketing technology companies might not consolidate; besides, customers would benefit from large number of vendors. Thus there would be no decrease of their number in foreseen future.
This phenomenon might be explained not only by technological reasons described by the blogger (rise of cloud computing, API, etc.), but also new business reality and trends. According to Ashu Garg, in 2014 just 1% of $1 trillion world marketing budget was spent on technology, but within 10 years this percentage will increase 10 times, so “this shift will open up a $120B per year opportunity for marketing technology start-ups”. So companies are not consolidating because the market is still young and expanding. Existing and evolving players can hardly digest the space around them, they are too far from getting to each other’s borders.
Obviously, marketing technology badly lacks classical marketing, with its categorization, segmentation, clear USP, positioning, and a good story. Who are all these logos, what do they offer and how can you can the one you need? How do they differ, and how do they position among their peers? It is not an easy question, especially as most of them are armed with the same buzz words and very fast in making promises.
A great example of marketing technology fluidity and uncertainty is Gartner’s reports. In 2014, the company released Digital Marketing Transit Map, which offered a holistic and organizational alternative to the Brinker’s kaleidoscopic landscape. It gave probably a first complete and rich view of marketing technology stack. The heart of the map was Digital hub connecting all lines and dots. The idea of connectedness and accessibility to any destination was obviously the key point.
In January 2016, Gartner published Magic Quadrant for Digital Marketing Hubs. They elaborate on the definition of DM Hub and include not only ability to track audience across many platforms and multi-channels management, but also planning and collaboration, and unified performance measure.
But the most striking thing is diversity of marketing companies put together in the Magic Quadrant. Some of them are best in breed products, robust platforms with the richest functionality, others are smaller players with a focus on certain areas. Even within the space of ‘niche players’, they seem too way niches. Leaders are quite predictable – Adobe, Oracle, Salesforce and Marketo, marketing cloud and automation providers mainly for enterprise level companies. “Challengers” include marketing automation company (IBM), data and marketing services and advertising technology providers (Experian, Epsilon). While “Niche players” and “visionaries” quadrants embrace a wide range of companies providing programmatic advertising, data management platforms, media data and analytics, search engine marketing, personalization and CRM use cases… Their core features description is diverse, verbose, full of abbreviations and correlations with broad and narrow marketing categories.
Another important point is a complimentary, not competitive relation between the listed companies. Even among leaders, there are platforms, which in most cases are used as an integrated system – Salesforce-Oracle (Eloqua) or Salesforce-Marketo. Out of 15 smaller players, seven are Marketo partners, and eight are Oracle partners, perfectly coexisting in the marketing environment.
What does it mean? Marketing technology categories will be slowly evolving, migrating, merging and taking multiple paths. Pure functionality seems not enough to define them, and the categories will take over customer use cases, segments, and position or configuration in a marketing technology stack.