In 2016 alone, marketing departments will spend over $25 billion boosting their technology stacks. That estimate comes from the advisory firm IDC, which is projecting a compound annual growth rate of 12.4 percent until 2018 for the marketing technology space.
Martech is, indeed, already big business. VentureBeat claims that the space has received $134 billion in funding in the past five years and now employs 300,000 people. Almost 30 martech firms are valued at over $1 billion. And, as we reveal in the new ebook The Enterprise Guide to Marketing Technology, the industry is only becoming more crowded as new tools emerge in the marketing universe.
These mind-blowing numbers raise an important question: what will CMOs see in the martech landscape soon? Should marketers, for instance, expect consolidation in the space, or is the marketplace only about to get more crowded? Additionally, what existing and new categories should marketers pay attention to?
To honor the year 2016, we collected 16 martech predictions worth thinking about. Here’s a glimpse into the future of marketing technology, according to 16 industry experts.
The rise of open source alternatives
“Open source is coming to martech in a big way,” says Scott Brinker, author of the blog Chief Marketing Technologist and co-founder and CTO of the content marketing software ion interactive. He believes open source contenders will come from struggling vendors, who’ll pivot to open sourcing their solutions as a last resort.
Brinker, who also chairs the Marketing Tech Conference, adds, “There is a small but promising possibility that these open source initiatives will herald the beginning of data standards in the martech space. I doubt that will come to fruition in this next year, but the seeds will likely be planted.”
“Open source is coming to martech in a big way”- @chiefmartec. (TWEET THIS PREDICTION)
The year of “peak martech”
Brinker’s marketing technology landscape supergraphic in 2015 featured 1,876 vendors—a staggering increase from 2014’s figure of 947. But don’t expect the same pace of growth in 2016.
“This is the year that Scott Brinker’s chart of nearly 2,000 marketing technology companies starts shrinking,” says Nipul Chokshi, senior director of product marketing at Lattice Engines, a predictive sales analytics software, in an article for Martech Advisor. “There will be six or seven well known players across the board that begin the consolidation process by creating their own suites of complementary technologies.”
This consolidation might be a good thing for both marketers and vendors. Chokshi sees that the less crowded landscape will lead to “a stickier product set” for marketing organizations compared to the current practice of “purchasing multiple niche solutions to test their effectiveness.”
“There will be six or seven well known players…that will begin the consolidation process” – @nipulc (TWEET THIS PREDICTION)
Neil Patel, co-founder of several marketing products like Kissmetrics, Crazy Egg and Hello Bar, shared his martech predictions with us via email. He says the future of the space is all about personalization.
“Just like how you only see specific items in your Facebook news feed, marketing will be like that for many channels including TV,” Patel predicts. “Technology is adapting very fast and these large corporations have so much data on us that they can make our user experience better by providing relevant information (or ads) at the right time.”
“The future is personalization.” – @NeilPatel (TWEET THIS PREDICTION)
Personalization at scale
Tapajyoti (Tukan) Das is CEO of LeadSift, a social intelligence platform. He says personalization at scale—through the help of a single consolidated view of the consumer—will be a critical component of the future of marketing technology.
“With the explosion of content across different channels and devices, consumers are drowning in noise and as a result they are often ignoring or missing the relevant brand message,” Das tells Vision Critical. “To really drive the right message at the right time, marketers need to tailor their content to that one individual.”
As an example, people who are planning a trip to Cancun expect to see brand content about Mexico, according to Das—not about Whistler.
“Marketers will have to make progress towards getting a single consolidated view of the consumer across all devices and then create super relevant segments with their buying behavior.”
Consumers are drowning in noise. Marketers should tailor their content – @tdas (TWEET THIS PREDICTION)
Mass personalization offline
Teren Teh, CEO and co-founder of Insightico, a real estate website, also sees martech driving mass personalization.
“We know we can personalize everything digitally and it saves money, but can we make traditional advertising more efficient?” he asks in a discussion about martech on Inbound.org. “I think so—just not sure how yet.”
Teh cautions that balancing consumer privacy concerns is a critical consideration as marketers increasingly use tech for personalization. “One of the biggest challenge and opportunities is how companies can leverage the Internet of Things to take personalization to another level while at the same time balancing the creepiness factor that brands know everything about consumers.”
More demand for authenticity
When companies rely heavily on technology, there’s a very real risk of losing the human touch in the marketing practice. That’s because many martech solutions reduce customers to numbers—as just another faceless entry in the database.
Tyler Douglas, chief marketing and sales officer at Vision Critical and author of The Enterprise Guide to Marketing Technology, predicts that forward-thinking companies will increasingly turn to martech solutions that help them humanize their customers.
“CMOs and other members of the C-suite will realize that all the data they get from martech is no substitute for authentic engagement,” says Douglas about his martech prediction. “Customers are more than just the wake of their data; their value is more than the sum of the trail of activities and data they leave behind. Marketers must go beyond data.”
According to Douglas, the solution isn’t to cut back on technology—instead, it’s to compliment your marketing stack with solutions that build customer intelligence and that build stronger customer relationships.
Concludes Douglas, “The companies that prioritize engagement—those that build a stronger emotional tie with their customers—will see more ROI from marketing technology.”
“The companies that prioritize engagement will see more ROI from marketing technology” – @tylerdouglas (TWEET THIS INSIGHT)
Companies are seeing huge ROI from conversion rate optimization (CRO) software. VentureBeat estimates that ROI from these solutions are, on average, 223 percent. Marketers should expect CRO-like solutions coming to many areas of the industry.
Ed Fry, general manager at Inbound.org, calls it the rise of data-driven optimization. He says we will see the launch of companies that will position themselves as “Optimizely for X,” referencing the popular CRO tool. “We’ve seen the sprouts of this in search with Distilled’s new (SEO split-testing) tool, but what about content? Mobile apps? Social?” he says in an Inbound.org discussion.
Martech will see more companies positioning themselves as “Optimizely for X” – @ (TWEET THIS PREDICTION)
Better analytics for smarter marketing decisions
Many martech companies have made huge leaps in developing digital analytics, but more sophisticated tools are on the way. That’s according to Tomasz Borys, director of marketing at Kissmetrics, a web analytics software that helps marketers optimize campaigns and increase conversions.
“Companies need to reap the benefits of investing into analytics, and digital analytic platforms need to make shifts into simplifying the process of transparency,” Borys tells Vision Critical. “We’ve been in an age of data explosion, and marketers have become more sophisticated on how they interact, nurture, prospect, retarget and communicate within their ecosystem. They need an analytics tool that supports that level of sophistication from all data points.”
Borys says that while these tools already exist, they usually take significant resources to set up. There’s an appetite for tools that will enable marketers to “obtain information in real-time, quickly and with ease.”
Marketers want #martech tools that will let them “obtain information in real-time, quickly and with ease” – @tbcali (TWEET THIS INSIGHT)
More telecoms in ad tech
Speaking to CIO.com, Thomas Sommer, content marketing manager at the app marketing firm AppLift, says more telecom providers will follow the footsteps of Verizon—a company that recently acquired AOL and announced plans to buy the ad network Millennial Media.
The reason telecoms are entering ad tech? Customer data. Sommer says that as the services (such as SMS messaging) provided by telecoms become more commoditized, the industry will rely on predictive ad technology to monetize their traffic.
More #telecoms will follow Verizon and enter the #adtech space – @ (TWEET THIS PREDICTION)
A/B testing of technologies
Erik Bratt, vice president of marketing at enterprise tag management software company Ensighten, thinks 2016 will be the year that marketers will adopt an A/B testing mentality when it comes to their stack.
“This is the year savvy marketers will learn to test drive their shiny new solutions, even A/B testing the performance of different vendors, before buying them,” Bratt predicts in a Marketing Land article. He says that the technology required to quickly add or remove digital marketing solutions from web and mobile channels is now there.
As a result of more A/B testing, Bratt says marketers will see dramatically shortened deployments and “avoid traditional vendor lock-in, where the time and cost to replace one solution with another really wasn’t worth the hassle.”
“This is the year savvy marketers will learn to test drive their shiny new solutions” – @ (TWEET THIS PREDICTION)
Deeper integration between martech and adtech stacks
Jessica Cross, director of marketing at the predictive marketing company EverString, believes we’ll see adtech and martech coalescing, enabling companies to serve highly targeted ads.
“If I could write a memoir as a marketer, I’d title it Wasted Impressions,” she shares in an EverString slideshare deck. “There is just too much wasted money on the wrong accounts that will never convert. We can do better, and it’s coming in 2016.”
“In 2016, there will be a much deeper integration between the martech and adtech stacks” – @JFayeSF (TWEET THIS PREDICTION)
The year of value-add
Peter Mollins, vice president of marketing at the sales enablement platform KnowledgeTree, has a pretty optimistic prediction: “2016 is when we realize how important it is to understand the specific needs, pains, and concerns of prospects,” he tells us. “And it’s when we realize the right response to that understanding is not taking their time. It’s about giving something they value.”
Mollins says using technology to push relevant and timely content and information to prospects is crucial because “buyers are getting hit with more and more outreaches from marketers and salespeople.”
He adds, “Capturing a prospect’s interest isn’t about dialing the volume to 11. It’s about being useful and relevant to a prospect.”
“Capturing a prospect’s interest is… about being useful and relevant” – @petermollins (TWEET THIS INSIGHT)
More automation in content marketing
Adam Sarner, vice president at the research firm Gartner, sees more automation in the content creation process. The result of this automation? “Higher-velocity authoring and improved quality, consistency and format of business content through automated editors.”
Sarner notes that 70 percent of marketers already use decision engines in some way when creating website and email content.
Automation in #contentmarketing will result to “higher-velocity authoring and improved quality” – @ (TWEET THIS PREDICTION)
Content marketing on steroids (with the help of your employees)
The next phase of content marketing is all about enabling employees from the entire organization to share and distribute content to customers. That’s according to Maria Osipova, director of marketing at the digital asset management platform MediaValet.
“This year is all about enabling every employee interaction with the audience and bringing the content to their fingertips,” Osipova tells Vision Critical.
Now that marketers have already invested heavily in creating quality, visually engaging content, they need to enable employees to extend the brand experience beyond content marketing. That’s because digital experience isn’t just about marketing—it’s about people’s experience at every company touchpoint, according to Osipova.
This need to equip employees with marketing-approved digital assets will lead to companies investing more in enterprise content management systems and asset management platforms.
Concludes Osipova, “When these platforms are integrated into the entire company infrastructure, the digital story is consistent across every touch point and the impact on customers is incredible. Companies that can achieve that will be winning the race this year.”
More investments in community platforms
Waking up to the importance of customer-centricity, B2B firms will put more resources into getting to their customers. That’s the prognosis from Laura Ramos, VP and principal analyst of b-to-b marketing at Forrester Research.
In an interview with AdvertisingAge, Ramos says companies need to understand that B2B buyers are becoming more empowered and are “behaving more like consumers.” Companies must invest in technologies that will enable them to provide a seamless experience for B2B buyers.
Adds Ramos, “This whole customer-obsession, get-to-know-your-customer, know-your-customer-better [trend] is going to create some investment in things like voice of the customer, meaning really analyzing the voice of the customer, not just doing surveys.”
The customer-centricity trend will drive demand for voice of the customer #martech solutions – @lauraramos (TWEET THIS PREDICTION)
Decline in the use of data brokers
Patrick Salyer, CEO of customer identity platform Gigya, thinks that tough times are ahead for data brokers—companies that “have built a multi-billion dollar industry dedicated to sourcing and selling consumer information from a variety of places, including surveys and questionnaires, public records like voter documentation, enterprise insights from loyalty programs and more.” As a result, there will be more demand for software that provides first-party data.
“Uncertainties regarding the accuracy, completeness and origins of this data make it nearly impossible for marketers to know exactly who they’re reaching and to effectively measure the success of their campaigns, causing more brands to turn to first-party data,” Salyer says. “First-party data lowers campaign costs by enabling marketers to target audiences with highly relevant messaging, minimizing the number of impressions it takes for users to engage and driving conversions at a faster and higher rate.”
Decline of data brokers will lead to growth of #martech solutions that provide first-party data – @patricksalyer (TWEET THIS PREDICTION)
These martech predictions show that the landscape has an exciting future ahead. As the market matures, it will be increasingly important for companies to optimize their marketing stacks. More crucially, as companies add more technologies to their toolkits, they must remember that tech alone does not replace direct customer engagement. In the end, CMOs must ensure that their investment in technology lets them build an authentic and mutually beneficial relationship with their customers.
For a look at the technologies that are the new standard tools for today’s successful marketers, check out The Enterprise Guide for Marketing Technology.