This is why martech is a sector still in its infancy
Marketing technology, or martech, is gaining traction in the modern marketing landscape. A recent spike in spending in the sector is serving as a backdrop for the quickly changing field, and indirectly, the mergers and acquisitions (M&A), and consolidation activity from the past few years.
But despite the joining of forces and other activity in martech, some industry experts argue the sector is growing much faster than any amount of consolidation can impact.
One such voice, Integrate CMO Scott Vaughan, says a handful of mega-deals from big players like Oracle, IBM, Adobe and SAP, who have been scooping up pieces to build out their respective "marketing clouds," have fueled the false perception.
"While it may seem like there is martech convergence today because of the race to capitalize on this need, convergence is not happening yet," Vaughan told Marketing Dive. "The number of new players entering the market is outrunning convergence today."
In fact, he explained, from 2013 to 201, the number of martech vendors doubled in size, and if the number is projected out, there are no signs for slowing. The marketing software sector alone is expected to reach $20.8 billion by 2018, according to IDC (International Data Corporation).
"There is a big appetite by marketers and investors alike to bet on martech," Vaughan said.
How martech has changed
Much of the early marketing technology was more geared toward advertising, what Vaughan described as the “black box” of ad tech, adding that this tech was developed “outside the walls of marketing organizations” by agencies and third-party partners. Now marketers need, and are getting, technology that harnesses the data coming in from third-party digital, mobile and social data touch points.
“Marketers are using a variety of technologies – company websites, marketing automation tools, CRM systems, analytics to name a few – to put this data to work in their programs for improved performance and better outcomes,” Vaughan said. “Martech investment is thriving because of the strong need to have all data available in real-time and centralized in marketing systems to create a more consolidated and detailed profile of their customers and to improve the results of their marketing efforts.”
Vaughan believes looking ahead, there will be a sort of "tale of to cities," with one group becoming experts building hyper-integrated, data-driven martech stacks; the other tier buying service in a cloud and leaving it to a core provider to deliver those capabilities.
"This is very similar to what happened to IT organizations a decade or so ago. Some companies bet on in-sourcing and invested in their own tech and people while others went with an outsourced model," he said.
Avoiding the 'Frankenstack'
Vaughan defines a martech “Frankenstack” as glued together marketing tools and systems from different providers that end up a “mish-mash” of technologies that don’t really integrate. He said that marketers need systems that allow users a central view of data and that can improve decision making.
One issue is the convergence of marketing and IT and the somewhat conflicting goals between the two corporate divisions. The "marketing mindset" is traditionally one of agility, "looking to make things happen now," Vaughan explained. "IT methodologies are foreign to marketing organizations and rarely translate into flexibility or speed."
However, not all marketers are ripe with tech experience either.
To navigate the complexity of martech, Vaughan suggested creating a “marketing tech blueprint” that will help marketers avoid the Frankenstack. This blueprint is a visual diagram that identifies and describes technology, systems, processes and data flows to allow marketers to determine priorities and bottlenecks. Essentially the blueprint serves as a roadmap that illustrates where to bring in new technology to achieve goals.
The other piece of the puzzle is making sure the right people are fitting the right roles, but also bring tech and analytics savvy to the table to drive business value. As martech pushes through the building phase of its development, marketers are tasked with creating their own technology stacks that will help integrate and connect the dots.
"Hiring and establishing a culture where all marketers lead with data and are comfortable adopting new tools will only help marketing organizations increase their odds of success," Vaughan said.