Much Ado About Nothing! How martech remains an underutilised technology by marketers – Brand Wagon News
With Google restricting third-party cookies for one percent of Chrome users, starting January 04, 2023, it has led to marketers scrambling to build or invest in the martech stack. However, data from Gartner, a market research firm shows that marketers utilise just 42% of the breadth of capabilities available in their martech stack overall, down from 58% in 2020. “CMOs (chief marketing officers) reported allocating a quarter of their entire marketing expense budgets to marketing technologies in 2022. Despite turbulent budgets in previous years and current economic headwinds, tech investments are a priority for CMOs and proving their RoI is more crucial than ever. Yet the challenges associated with martech underutilization, such as new business models and disrupted customer journeys, are making it difficult for marketers to demonstrate technology’s value,” Benjamin Bloom, VP Analyst in the Gartner Marketing practice, stated in the report.
The 16 percentage point drop in overall martech utilisation in the past two years can be attributed to a significant amount of overlap among marketing technology solutions said 30% of respondents, difficulty identifying and recruiting talent to drive adoption/utilisation (28%), and complexity or sprawl of the marketing technology ecosystem (27%), as per the report. “Maximising the potential of martech stacks requires a strategic alignment with evolving business objectives. Marketers must continually reassess their technology investments, ensuring that tools are not only integrated seamlessly but also leveraged to their full capacity. Overcoming common challenges, such as skill gaps and evolving technologies, demands a commitment to ongoing training and staying ahead of industry trends,” Gopal Dutt Vashisht, growth manager, PeeSafe, said.
Driving enough RoI
Industry experts believe that marketers’ ability to maximise their existing martech stacks depends on several critical factors including an in-depth understanding of the tools’ features, capabilities, and integrations. Moreover, these tools must align with the business’s marketing objectives to realise its full potential. “Furthermore, harnessing data for insights and data-driven decisions is central to modern marketing. One needs to stay updated about consumer trends to be able to assess the martech stack better. For instance, as consumers increasingly desire a “my personal store” experience, the transition to crafting hyper-personalised interactions using Gen-AI tools should evolve seamlessly and organically to meet these expectations. Additionally, allocating the appropriate budget and resources is crucial to support and enhance these continual efforts of marketers,” Kalpit Jain, Group CEO, Netcore Cloud, explained.
Also, it is believed that ensuring integration and compatibility within the martech stack is equally vital to prevent data silos and inefficiencies. The marketing team’s skill level, necessitating ongoing training and development, is crucial to keep pace with evolving technology. “ In today’s martech landscape, marketers need to have the right tools to engage customers and keep up with the latest digital trends. Two of the Big Five, Apple and Google, have already taken steps to phase out third-party data. So, as the ‘cookie unset’ prepares us for a cookieless future, martech stacks will have to wield the power of first-party data. It includes key data points such as purchase history, customers’ purchase patterns, browsing history, link clicks, demography, and others,” Raj Swaminathan, senior director- revenues and new initiatives, Globale Media, said.
One of the tools identified by marketers which support innovative marketing channels was social commerce, with 62% saying they have deployed, or plan to deploy such technology. Technology to support advertising execution and measurement in audio and streaming or connected TV (CTV) environments has also found a base of support, with 65% of marketers exploring or piloting associated technologies, stated Gartner in its report.
An over-crowded industry
Ever heard, ‘too many cooks spoil the broth’? It is exactly a situation that the martech industry is going through, currently. Perhaps there are too many offerings of the same kind, and price being the only differentiating factor, most of the tools remain utilised. Industry experts believe that this is also a reason by funding has dropped. Investment in martech and adtech start-ups slumped by 94.2% to $45.2 million between January till December 20, 2023 from $769.5 million in CY2022, reveals data from Tracxn, a start-up data platform. As a result, the industry will gradually move towards consolidation and a bundled offering. “The exact future of mergers and acquisitions in the martech industry will depend on various factors including economic conditions, technological advancements, and market demand among others. The martech industry has seen a tremendous amount of M&A activity. In 2022, there were 246 acquisitions for a total value of $54.9 billion in disclosed purchase amounts. While the industry as a whole does not appear to be consolidating, reducing the number of products in individual martech stacks continues to be a topic of conversation,” Mitesh Shah, co-founder, Inflection Point Ventures, said.
Furthermore, industry experts opine that the rapid adoption of automation for better optimisation of marketing plans and campaigns is expected to continue to support revenue growth of the market. Companies which have developed advanced automation tools could become attractive acquisition targets. Interestingly, experts are quick to point out that consolidation often acts as a catalyst for more software to be created. Consolidated platforms make it easier for software developers to build apps on top of them. The rise of ecosystems and marketplaces in SaaS businesses further enables the explosion of commercial specialist apps. For Netcore’s Jain its journey over the past three decades has solidified its base with India accounting for 85-90% of its revenue. “However, aligning with our strategy for international expansion, we’re focusing on diversifying our global presence. We aim to have emerging markets and the US contribute 20% each to our revenue, while India maintains a 60% share. M&As, coupled with strategic partnerships, are pivotal in this strategy. They allow us immediate access to new markets and provide opportunities to expand and enhance our product offerings. This strategy transcends mere growth; it’s about market consolidation, acquiring state-of-the-art technology, and reinforcing our competitive position,” he added.
The report by Gartner further stated that marketers also indicated interest in commercial activity within more emerging technologies. This includes the metaverse and non-fungible tokens (NFTs), with 62% exploring or piloting technology to support metaverse advertising and 59% exploring or piloting technology to enable the creation of NFTs. It is believed that the martech industry is likely to follow a trajectory of harnessing all support under one roof. Mergers and acquisitions (M&As) will be leveraged for geographic expansion, technology acquisition, and market consolidation.
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