Scott Brinker is back with his encyclopedic marketing technology landscape – and this year the number of companies listed has doubled, but the number of categories has stayed the same. In this in depth analysis, we explore the growth and maturation of the marketing technology industry.
He has done it again. Scott Brinker has painted the 2015 marketing technology landscape in what has become his famous annual supergraphic. The landscape evidences the blistering speed at which the marketing technology industry (martech) continues to expand, now with 1876 companies in 43 categories. Brinker’s annual marketing ecosystem delivers the most comprehensive visual of the growth within arguably the most dynamic and high-growth enterprise spaces for business leaders, thought-leaders, and even investors.
This year’s marketing technology landscape establishes two big market trends: growth and maturity. While new, innovative companies enter the landscape, incumbents are cementing categories and their early adopters are setting precedents for others to implement integrated solutions into their technology stack. Even the historically CIO focused Larry Ellison, Founder of Oracle, is keen to win over marketing: “The CMO’s role is going to be more important next year than it is this year, and more important the year after that” (Ad Age).
No need to get light headed from this dizzying illustration. We’ve caught up directly with the mastermind himself, Scott Brinker, to pinpoint 4 key trends highlighting the expansion and coming-of-age of today’s Marketing Technology Landscape.
1. The Landscape Is Growing
“The reaction to the graphic last year was “OH MY GOD!” and now we’re releasing one that’s twice the size.” Even with reduced duplicates, the sheer number of logos makes for an extremely dense supergraphic in 2015. The landscape has seen an average annual year-over-year growth of 170%, going from 100 companies four years ago, to over nearly 2000 this year. So what is spurring so much growth?
The momentum is not from unknown energy or speculation, but rather, from the growth of the marketing landscape into a trillion-dollar-a-year industry that’s being disrupted in just about every way. The top four driving factors to martech growth are as follows:
- Life is MORE digital
- Marketing culture has changed
- CMO budgets are growing
- Investments & acquisitions are through the roof
As the world becomes ubiquitously digital, buyers gain more control with channel preferences and content accessibility. Effectively finding and engaging with the new, savvier buyer falls on marketing’s plate – it’s not tasked to sales or IT, but to the CMO. To level the playing field, marketers are arming themselves with the tools to engage across channels, operationalize a more complex internal technology ecosystem, and capitalize on the digital breadcrumbs buyers leave behind. Laura Ramos of Forrester says it best: “A wealth of insights is available to B2B marketers if they are willing to dig in. Internet exploration, search, smart device usage, content browsing, and business community social activity reveals the twists and turns customers take throughout their lifetime.”
To handle the digital revolution and the data that comes with it, the CMO in the boardroom has changed from “Mad Men to Math Men.” Instead of developing campaigns based on intuition or simplistic frameworks, marketing decisions are made through advanced empirical engines with results that are objectively attributed and predicted through analytics. Marketers are no longer just good storytellers, but technologists that are required to make data-driven decisions. An era of a “Quantified Marketer” is here, and many modern marketing teams have already made the necessary steps to implement a vast array of tools.
These technologies don’t come free (well, besides the Freemium modeled tools). To support the now infamous Gartner claim that CMOs will outspend CIOs by 2017, surveys report that 50 to 65% of marketing executives anticipate spending more on marketing technology in the coming year, including 28% who plan to increase their spending by more than 25% (Conductor). Simply put, teams have deeper pockets to onboard more products. If this trends continues, we can safely say that by the time 2017 rolls around, marketers will have no trouble finding budget to implement a plethora of technology tools to manage and automate every area of marketing.
And lastly, with more than $50B invested in marketing technologies (VentureBeat), $6.2B in investments and acquisitions alone in the final 3 months of 2014 (VentureBeat), entrepreneurs have the resources to launch companies almost at will.
In all, CMOs are taking responsibility and budget to understand, engage, and acquire savvier-buyers in an growing market. The importance of new tools and partners to aid their success will likely not decelerate in the near future.
2. The Landscape Is Maturing, but Still in Adolescence
The 2015 landscape shows remarkable growth, but while the number of entrants was significant, there are definitive signs the martech space is maturing, not just growing.
To start, the marketing cloud juggernauts are ramping up acquisitions resulting in the consolidation of solutions. Over the past couple of years, Oracle has spent $3 billion on a martech acquisition spree averaging a company a month (CIO.com). A concentration of dollars went to Customer Data Platforms, such as Bluekai to Oracle for over $350M and Salesforce’s acquisition of RelateIQ for $392M. LinkedIn made a major investment toward becoming a B2B marketing platform with the purchase of online marketing platform BIZO for $175M, and is poised to make billion dollar advances into the B2B marketing space (Business Insider). Scott Brinker predicts Microsoft will make dramatic moves into the martech space by “spending more than $1 billion in M&A to make a bid as a major marketing platform provider” (Chiefmartec). These high-sticker prices certainly show the marketing cloud has established its value, and promise consolidation and distribution of new capabilities, such as predictive analytics and omni-channel advertising.
Limited change in landscape categorization is another sign that martech has grown up. Since last year, the total number of categories went from 43 to 42. While many categories saw name revisions, and companies jumped from one category to another, most new entrants fell within existing category. This makes sense since most technologies are startups in their introductory lifecycle stages, when proper categorization is difficult while value-propositions and key products are being fine-tuned.
The bulk of newcomers are niche players in established categories. Marketing automation, for example, despite having its heyday over the last few years, nearly doubled from 51 in 2014 to 83 this year. Scott Brinker this trend in several categories:
“It [marketing automation] is both consolidating on one side, while exploding with new entrepreneurial ventures on the other…. For instance, I expected the web analytics category to shrink this year — but it’s actually expanded quite a bit, with some intriguing new entrants. Email marketing is another category that’s experiencing an innovative rebirth” (Chiefmartec).
While companies exit and categorizes solidify, marketing technology newcomers are vastly outpacing the consolidation.
3. Customer Data Platforms Are Exploding
The next big thing for the marketing technology space is all about data – and, as Scott Brinker illustrates, the customer data platforms clearly reflect data as the “new center of gravity.”
A new category in 2014, with almost all companies pre-launch in early landscapes, Customer Data Platforms (CPDs) offer a layer of data, science, and software to focus on smarter, data-driven marketing. Where the previous generation of platforms was built for execution to provide marketers the infrastructure and coordination to do “more marketing,” CDPs are architected entirely around data.
While the category name changes depending on who you talk to (Forrester-Customer Insights System, Radius-Marketing Intelligence Platforms), the definition provided David Raab is fairly consistent: “Customer Data Platforms are a marketer-controlled system that supports external marketing execution based on persistent, cross-channel customer data.” Many CDPs package predictive solutions and machine-learning marketers can use to better understand customers, accelerate growth with hyper-targeting and prioritization, and solve operational inefficiencies resulting from data-silos. It’s a natural evolution from the big data era of a few years ago – these companies apply data science to turn massive big data into actionable insights.
The broader machine intelligence space is so hot that investor Shivon Zilis developed her own Machine Intelligence Landscape, with several martech logos appearing in a Rethinking Enterprise layer (Radius, CommandIQ, Infer, Preact). For a two-year-old category, CDPs are getting impressive financing – with $1.6B in funding and $3.19B in acquisitions during 2014 alone, according to data from Crunchbase. Scott Brinker argues in the future middleware could become the next big platforms, as the current big marketing cloud players just add the layer of execution.
4. Community Is Emerging
The landscape can inflict doubts for marketers crafting their marketing technology stack. How do I navigate all the options? Will I ever get enough budget for the solutions I need? Is there some best-of-breed stack? Will they all integrate with one another? Is my personal and company data secure?
Squinting as you scan from logo to logo won’t help you make the right technology purchasing decisions, but determining clear business objectives and challenges will. The rapidly changing landscape makes marketing technology enormously complex and difficult to manage, which also means it can be your biggest competitive weapon. Most organizations will continue to struggle, but marketers that can learn, implement, adapt, and continually optimize their marketing stack can create massive advantages. Luckily, support for marketers comes in two ways.
First, backbone platforms are making huge investments in their partner and ISV ecosystems to help marketers make better decisions and solve problems created from a collection of disparate tools. For example, Marketo Launchpoint was introduced in late 2012 and now hosts over 400 marketing applications, many of which appear in this landscape. Salesforce’s AppExchange lists an astounding 2663 apps, with 230+ in the marketing category and 1090 in sales. Even smaller players, such as content management platform Kapost and video marketing software Vidyard, tout their dozen or so integrations. And if there isnt a native integration – well, there are a handful of third party integration platforms, such as Zapier, Snaplogic, and Mulesoft, that support an enormous vendor environment.
Second, early adopters are revealing their marketing stacks to encourage their peers during this constant state of evolution.
Take, for example, this marketer who took her company from 2 technologies supporting demand generation efforts to 20 in just two years:
But as we discussed, just picking solutions out of the overflowing martech hat will likely detract from achievement of marketing goals. Marketing must create their own landscape that aligns solutions with challenges and objectives that will drive revenue. This marketer’s stack is very specific to demand generation, and each tool addresses a specific stage in the funnel, or customer lifecycle.
Scott Brinker informs us that his creation is a “Theoretical landscape to see the scale and scope. But it is not how should go about strategy.” If you’re starting with a fresh canvas, crumble up the landscape and think about what youre trying to accomplish. Start with requirements, and back your way into finding partners and vendors.