MarTech a Snapshot
The pandemic accelerated the adoption of MarTech solutions across businesses of all sizes. Therefore, I decided to look a bit deeper into it. Scott Brinker and his Chief Marketing Technologist Blog popped up very quickly on my screen. I can highly recommend reading his blogs/posts and follow him.
Global Market & Landscape
In one of his previous blog posts, he mentioned that the worldwide spending on MarTech was around $121.5B for 2020. Based on that, I estimate that the global spent this year is about $166.5B. But, of course, it might be even higher given the accelerated adoption of MarTech solutions.
According to Scott Brinker's blog last year, there were around +8,000 MarTech companies. When he started to map the landscape in 2011, he had 150 on the map! Today we most likely look at around +10,000 companies.
He categorises companies into 6 main groups; advertising & promotion (+900), content & experience (+1900), social & relationships (+1900), commerce & sales (+1300), data (+1200) and management (+600) (data: 2020). Each category is broken down into subcategories (49). If you are looking for a new tool, I recommend checking out his database: Martech 5000.
Market Observations
In my opinion, the landscape will continue to grow for at least the next few years. The increase in competition and technology knowledge of marketers will make it harder for new market players to gain market shares. Finding the right solution is already today a challenge. However, Gartner reported that CMO's intend to allocate more than 25% of their budget to their MarTech stack. Besides the expected increase in spending, the market is also expected to focus more on a future without third party cookies. Previous data breaches led to consumers wanting to know who has their data and how it is being protected. Safari and Firefox removed third-party cookie tracking. Google Chrome has committed to do the same by 2023. Therefore, marketers need to change how they collect the data and find the tools to support them. This is one reason why the data category is expected to grow.?
According to Gartner, the pandemic also showed that companies cut first marketing budgets (2020: 11%, 2021: 6.4%). However, this is nothing new marketing budgets have always been cut first and restored last. The cut led to a prioritisation of digital channels. More than 72% of marketing budgets are allocated to pure digital channels. Furthermore, the budget cuts also led to some companies bringing strategic capabilities back in-house, which were previously done by agencies (29% of the outsourced work has been back insourced). However, around 23% of the marketing budgets are still allocated to agencies.
The pandemic has also led to digital late consumers being forced to accept online channels. Therefore, it is no surprise that digital commerce (12.3%) is ranked highest on the budget allocation, followed by marketing operations (11.9%) and brand strategy (11.3%). Marketing analytics is ranked number fourth with (11.0%) and is expected to grow.
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Conclusion
The quick market overview shows plenty of opportunities for startups since the MarTech market will continue to grow. In my opinion, we will see much growth around solutions and platforms which enable marketers to create even more personalised campaigns, generate more data and insights and reduce time and effort through automation. In addition, MarTech founders should focus on solutions that are easy to integrate into existing marketing technology stacks to increase the chances of adoption.?
I also expect to see an increase in low-code / no-code solutions to increase marketers' productivity. Furthermore, we will also see an increase in solutions that enable businesses to build deeper relationships with their existing customers by leveraging the existing data. According to Gartner, 73% of the CMO's intend to focus on existing customers. Their objective is to increase sales of current (39%) and/or new products (34%) to existing customers.
One question is, is there still space for traditional marketing? Yes, research shows that people feel spammed digital and demand more privacy. Therefore, marketers should remind themselves that the goal is to add value to the consumer and not spam them and extract as much data as possible. Consumers are still willing to share their data as long as they think they received an appropriate amount of value in return.?
One final thought: In some cases, a conventional personalised print mail campaign is even more effective than a digital campaign since most mailboxes are nearly empty these days. So, digital is not always the more intelligent way. However, it depends on the target customer and their behaviour and preferences.
What is your opinion on MarTech?
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