• June 9, 2023
  • By Liz Miller, vice president and principal analyst, Constellation Research

Where Can Marketing Technology Grow From Here?

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The news was deafening: The marketing technology landscape “Supergraphic” now included more than 11,000 solutions. If you’ve never seen this feat of organizational wonder, every year a graphic is produced that aims to aggregate, categorize, and make sense of the MarTech landscape. And every year, like a hungry amoeba, it grows. In 2020, back when the graphic was a humble 8,000-plus solutions, it looked more like a gaming map showcasing warring clans ready to conquer unsuspecting once-allied nations.

If truth be told, back in 2020 the landscape felt like a million-pound elephant sitting on marketing as a function, squeezing the life, and the joy, out of engagement. It was a representation of a beast chasing us down, a manifestation of the Frankenstack that was lumbering about promising experiences while delivering confusion and complexity.

Had you told me that three years and one pandemic later 11,000-plus solutions arranged into something that looked like a DNA sequencing map would be marketing’s “new normal,” I would have laughed. I also would have understood that no matter how many tools were added, this was all self-inflicted acts of random technology in search of growth.

First, let’s do a little unraveling about the landscape itself:

  • Categories are shifting, but not quite transforming.Six hundred and eighty-nine companies were removed from the landscape between 2022 and 2023 (7 percent churn), some thanks to acquisitions, but others because of business closures. However, 7 percent churn is hardly the category consolidation many in the market expected for the space. While consolidation is still looming, it is happening thanks to re-platforming of foundational architectures as opposed to categories and solutions totally disappearing.
  • The brakes have been pumped, but not by much.The growth rate of the space has slowed to 10 percent year over year. By comparison, in 2020, the growth rate for new market entries was 24.5 percent, with a churn rate of 8.7 percent. While the slowdown has provided a bit of respite for weary marketers exhausted by the endless sales pitches, don’t expect the slowdown to remain. After all, artificial intelligence hasn’t earned its own segment yet.
  • Unicorns abound, but some power players were overlooked.A total of 11,038 products are included, but there are a couple omissions, which is bound to happen. For example, Oracle Unity is a CDP not included in the category. Salesforce CDP, or a even mention of Genie or Data Cloud, is missing. Brightspot is listed as a digital asset management (DAM) solution, but not a CMS. HCL has a DAM offering that is included with its DX solution. Should it be listed, or it should not be because it isn’t sold as a stand-alone? On and on it goes. It is a safe bet to agree the number is actually higher; just look at the truncated list in Vendor Analysis & Management.

While a by-the-numbers view of the sprawling landscape can feel overwhelming, the continued growth is also totally understandable. Customer engagement, and more specifically the ways our most profitable customers want to engage with companies, has become increasingly complex. While we need the data to power ambient experiences, we also need the traditional investments in events and moments that are indelibly etched into a customer’s lifetime of experiences.

The moral of this year’s landscape is that this world we call marketing is not getting easier. We haven’t hit a point of mandatory and potentially cataclysmic tech category consolidation. For every logo that disappears, eight more emerge like an angry Gremlin that’s been doused with water. Expect to see an exponential explosion of Gremlins when the water known as AI is thrown onto the category!

Then again, AI could shift the landscape in any number of ways. AI could be the great consolidator of disconnected point tools, pulling data across these segmented systems and driving new efficiency in intelligence operations in new ways. The connection between AI’s capacity to analyze data at machine scale and empower work at human scale is undeniable. Joining AI’s intelligence output with automated workflows promises to herald in a new age of near-real-time customer journey optimization. Instead of collaboration tools to connect people around conversations, expect to see AI-empowered work and collaboration tools that start to manage how humans collaborate with AI and, eventually, how machines collaborate with other AI-managed machines.

The MarTech stack is merely a reflection of marketing itself. As the role has shifted from a creative-intensive, advertising-driven exercise to drive awareness and adoption to a growth-driving practice that leverages experiences and engagements to establish durable (and hopefully profitable) relationships with customers, partners, and larger ecosystems, the stack has had to expand to bring new capabilities and skills to the table. Automation, workflows, tagging, content, collaboration, data, and even more intelligence are all on the must-have technology list. We can’t do without any of it. Then again, no function on the front lines of experience delivery can. And this is the consolidation the market needs to be prepared to answer.

When the frontline functions of customer experience delivery consolidate and begin to operate in a connected, holistic manner, technology platforms and tools will need to follow suit. True CX stacks will understand that the acts of marketing, selling, and servicing can and must happen in any function, largely defined by the customer’s glide path of interaction as opposed to the organizational structure of the brand. Instead of data platforms that segment customer data based on which department’s toys collected it, CX stacks will centralize all things customer data, intelligence, and workflow into a hub.

The MarTech stack will stop being the domain of just marketers. The power of the stack will not be measured in the efficiencies and effectiveness of marketing itself, but rather in the growth and profitability of the connected systems and strategies. CX needs to think beyond a supergraphic and toward a megagraphic that unifies the shared services and tools like journey optimization, data, or assets that connect across sales, service, and marketing, allowing us to dig deeper into functional enablement tools that accelerate outcomes.

My best advice as we dread a landscape that could very well include as many as 12,000 solutions: Catalog and discover now. We have officially hit the phase of marketing and experience operations where we must step back and admit that we can’t know what we don’t know.

Dive into those web-based stack-building tools. Experiment in building your dream stacks. Get back to reality and map out your actual stack with all of its legacy bumps and bruises. Build out a stack using nothing but icons in the form of animals.

Take the time to build a bill of materials for experience delivery. Start with MarTech but expand out beyond marketing’s walls to include any and all solutions that touch the customer or deliver experiences, from data and intelligence to delivery and fulfillment. Even if you think you took a single-vendor approach, you likely have a rogue implementation of something hiding in a corner and now is the time to find it.

If there is a single call to action to land upon after analyzing this landscape, it is this: Get on those muck boots and wade through the known and unknown of all the engagement stacks out there. Drag it all out into the light. Get your CIO colleagues involved. Let it be a bonding exercise in radical tech and data transparency. But do it now. Choice drives innovation and transformation. It also sows chaos. It’s time to tame the chaos. 

Liz Miller is vice president and principal analyst at Constellation Research, covering the broad landscape of customer experience strategy and technologies.

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