It’s that time of year again.
The martech landscape grew this year…again.
When Brinker started mapping marketing technology vendors in 2011, there were just 150 companies operating in the space. Seven years later and the martech landscape has ballooned to nearly 7,000 solutions spread across more than 6,000 vendors.
Brinker’s annual report underscores the tremendous popularity of marketing technology at a time when even small businesses are investing in building their own martech stacks. The martech landscape grew by 27 percent in 2018, and according to the Walker Sands 2017 State of Marketing Technology report, 70 percent of marketers plan to invest more budget into the martech landscape in the coming year.
But, a closer look at the report tells us more than just growth experienced by the martech landscape. By looking at where the industry grew (and shrunk), marketers can stay up on current industry trends and make smarter decisions about where to invest their marketing technology budget.
The Leadspace team put together this post to help marketers make sense of Scott Brinker’s 2018 Marketing Technology Landscape and better understand key insights about how the industry is evolving.
How Did The Martech Landscape Change in 2017?
Despite the fact that the martech landscape grew by 27 percent in 2017, growth has slowed down considerably since Brinker’s early days of mapping marketing technology. For example, just three years ago, in 2015, the martech landscape grew by a whopping 87 percent from 2,000 solutions to over 3,500. The year before, growth had literally doubled. Even last year’s report — while substantially less than the year previous — revealed 40 percent growth in new solutions.
The 2018 report is the slowest rate of growth in the martech landscape since Brinker started tracking new vendors in 2011. However, that slowed growth doesn’t indicate a diminishing interest in marketing technology. As Brinker notes, 2017 was a record year for martech investments — funding catapulted to more than $14 billion ($2 billion more than the industry received in the previous record-holding years) and the number of unique vendors grew by 28 percent. Perhaps most interesting of all, the martech landscape experienced just 4.5 percent “churn” in 2017. That means demand for new technology is so high that the industry can withstand new vendors entering the market without the need for proportionate turnover of existing vendors.
Now, you may be asking yourself:
All of this is great news if you’re a company looking to enter the martech space, but what exactly does it mean for your average marketing team?
Great question. Here’s what you need to know.
5 Insights from the 2018 Marketing Technology Landscape
#1. Artificial Intelligence is Everywhere.
Because artificial intelligence is everywhere.
Artificial intelligence and machine learning permeated every corner of the martech landscape in recent years. From content creation and distribution to improving data quality and an enhanced customer experience, AI is everywhere. Examples of artificial intelligence exist in all 48 categories of Brinker’s 2018 map and as a result, it doesn’t make sense to give it a category of its own.
And to be clear — it’s not just AI that Brinker uncategorized. Predictive analytics have long been a mainstay of the martech landscape. But for the first time, Brinker chose to spread predictive analytics tools across all categories for much the same reason he distributed artificial intelligence.
There was a new category added to the 2018 landscape that certainly must pay tribute to AI: “Bots & Live Chat” made its debut this year after an explosion of new tools entered the market in 2017. With 80 percent of companies planning to adopt chatbot technology by 2020, Brinker forecasts that this corner of the martech landscape will be particularly ripe over the next 12-24 months.
#2. The Lines Between Marketing and Sales are Blurring.
Aligning sales and marketing has been a long-term goal for many organizations. For decades, the two teams stood at odds with one another despite their common goal of generating more revenue. Marketers blamed salespeople for not closing leads; salespeople blamed marketers for delivering weak leads.
But, as the digital revolution brought about new, tangible ways for marketers to clearly demonstrate return on investment for their campaigns, the ability for sales and marketing teams to truly complement each other’s efforts has come to fruition. It appears as if the days of discord between the two factions may be behind us, and Brinker gives a not-so-subtle nod to that in this year’s graph of the martech landscape. “Sales Automation, Enablement & Intelligence” is the largest category in the 2018 report with nearly 500 individual solutions catered toward bridging the gap between marketing and sales. For some, such a vast array of solutions warrants its own “salestech landscape” — after all, when Brinker began mapping the martech landscape in 2011, marketing technology solutions made up little more than a quarter of what exists in the “salestech” space today.
However, Brinker is quick to shut down the notion of separating sales and marketing, calling the marriage between the two fields (plus customer service) the “new marketing” and tools that enable it “digital transformation technology.” In other words: martech and salestech are now part of a larger, more holistic vision of how businesses engage with and sell to their audience. That vision plays into a much-discussed topic of 2017: the overall customer experience, which is clearly on display in this year’s martech report.
#3. Customer Experience is King.
A quick visual scan of the 2018 landscape tells you everything you need to know about the importance of customer experience in marketing. In addition to the 490 solutions making up “Sales Automation, Enablement & Intelligence,” categories like “Social Media Marketing & Monitoring,” “Advocacy, Loyalty, & Referrals,” and of course, “Customer Experience, Service & Success,” take up large chunks of the map.
Account-based marketing was once a niche technique accessible only to large companies that could bankroll the expensive martech needed to enable such an approach. Today, 90 percent of marketing teams take at least a partial account-based marketing approach. As martech affordability improved and companies of all sizes began building respectable technology stacks, the ability to hone in on a best-in-class customer experience for their audience emerged.
Of course, as more companies deliver on better customer experiences through ABM and more personalization, audience demands will naturally increase. That demand for more and better experiences could continue to fuel new generations of marketing technology for years to come.
As Brinker so succinctly puts it on the Chief Martec blog:
“As much amazing marketing software as there is today, there is still opportunity for new ideas. Marketing should be — and can be — better.”
Customer experience may be the push toward that improvement, much as new data privacy regulations coming out of the EU pushed companies to give some long-overdue attention to their data infrastructure in the past year.
#4. GDPR Brought Much-Needed Attention to Data Infrastructure.
The Global Data Protection Regulation (GDPR) goes live on May 25, but companies have had a two-year headstart on preparing for the largest overhaul to data protection laws in the last twenty years.
For the first time, data controllers will be held accountable not only for their own protection of customer information but also for ensuring the data processors — a.k.a. marketing technology vendors — they work with take adequate steps to protect customers from a data breach. As a result, a number of new companies in the data compliance and privacy space emerged in 2017. As Brinker notes, these new vendors may be capitalizing on the fears and frustrations of marketing teams scrambling to comply with GDPR before the May deadline, but they are also addressing a longstanding gap in the martech landscape.
Many marketers historically deprioritized data quality due to the time and financial investment required to get it right. GDPR has pushed organizations to make that investment and as a result, companies are seeing improvements in their own data quality, which naturally improves the performance of other solutions in their martech stack. A rising tide lifts all ships.
#5. Integration-Platform-as-a-Service Companies are Thriving.
The 48 categories that comprise Brinker’s 2018 report are broad. Within each lie a number of niche tools intended to serve specific purposes, often for a small demographic audience. As Brinker notes, development of these niche tools has been a primary growth factor for the martech landscape. The relatively low financial and technical barriers-to-entry for entrepreneurs to develop a new app or API combined with the demand for more and better marketing technology helped a number of small vendors thrive in 2017 while also helping small marketing teams establish their tech stack.
But integration is still a critical factor for long-term adoption of many of these tools. Marketing teams want tools that communicate with one another and offer seamless collaboration across the entirety of their stack. As a result, a new corner of the martech landscape known as “Integration-Platform-as-a-Service” a.k.a. “IPaaS” had a fruitful 2017. IPaaS solutions allow marketing teams to avoid the “frankenstack” and create that holistic marketing experience they so desire.
For smaller businesses, these IPaaS providers may offer a more affordable solution than investing in a comprehensive enterprise platform like HubSpot. Marketers can pick and choose from the wide array of niche tools spread across the martech landscape and bring them all together through an IPaaS provider. As Brinker notes, IPaaS solutions make it so “innovation is happening not only with individual SaaS applications, but also without how companies combine them together into their own unique digital operations fabric.”
As the martech landscape continues to evolve, one thing is abundantly clear. How companies use data is often the difference between increased growth or stagnation. How are you using your data?
Download the Ultimate Guide to Driving Revenue with a B2B Customer Data Platform to learn how to leverage your data for successful marketing campaigns.