News
The Gist
- Explosive growth in martech. The martech landscape has seen a significant expansion, now featuring 14,106 solutions, marking a 27.8% increase from the previous year, mainly driven by advancements in AI and new tool integrations.
- AI's dominant role. Generative AI has significantly contributed to the growth, with new tools focusing on enhancing content and experience segments, indicating AI's deepening integration across various marketing technologies.
- Resilience and adaptation. Despite economic challenges, the martech sector demonstrates resilience with a low churn rate. Companies increasingly prefer adaptable and integrative tools over centralized solutions, seeking better functionality and cost-effectiveness.
The marketing technology landscape’s heading toward 15K territory.
Scott Brinker, first deemed by CMSWire as the Godfather of Martech (marketing technology), released today his martech supergraphic that now includes 14,106 solutions.
But who’s counting, right? Brinker is, alongside his martech data partner and researcher Frans Riemersma, founder of the MartechTribe. Brinker, who operates the Chief Martec blog, made the announcement at the annual #MartechDay. He and Riemersma also released a comprehensive, 104-page report on the state of marketing technology.
All told, the martech landscape grew by a net addition of 3,068 products since last year’s 11,038; Brinker called it a “crazy" 27.8% growth year-over-year for the martech supergraphic, first rolled out in 2011 with 150 solutions.
Martech Grew ‘by a Lot’
Brinker expressed surprise at the extent of the marketing technology’s landscape growth, admitting he hadn't anticipated it. Initially, he expected the growth in martech, particularly in what he refers to as "peak martech," to stabilize.
He was aware of numerous tools emerging, especially driven by the hype around generative AI, but he also thought more tools would fade away (the landscape saw a record-low 2.1% churn). Despite his expectations, business dynamics didn't rapidly eliminate martech tools, a process he likened to a “pig-through-the-python.”
“It grew by a lot,” Brinker told CMSWire in an interview ahead of today’s release. “And by the way, in case if you're thinking, ‘Oh, these people just throw anything into that landscape,’ we actually had over 12,000 new candidates that we reviewed, and out of the 12,000 candidates we reviewed, we actually only accepted 3,000 of them. So, in fact, actually we do a deeper analysis where there were a number of things happening with these GPTs written for the OpenAI store. Most of those we didn't include in the martech landscape, but you could get into a bit of a philosophical debate of, 'Well, why aren't they martech if people are using them to achieve marketing?'”
Related Article: The Long Tail of Composable in the Martech Landscape
Time for a Martech Audit?
What is it like out there for some marketing leaders grappling with all the technology choices?
Marc Bedine, director of marketing operations and analytics at Cloudinary, told CMSWire with the explosion of new tools and marketing messages, it’s critical for his teams to stay focused on solving their most important problems. They do this by constantly auditing their current stack against operational goals to ensure they are getting the most out of the tools they already have and identify any key gaps.
“We are very open to consolidating tools when feature duplication is apparent between two or three solutions,” Bedine said. “We gravitate towards scalable and composable tools that can perform multiple functions, seamlessly connect with complementary platforms and grow with us as our marketing becomes more dynamic. Through this process, we remain ruthlessly committed to delivering a sizable return on our technology investments — individually and collectively. To do that, it’s critical that we can connect our pipeline back to the tools themselves and communicate value to our stakeholders early and often.”
The Impact of AI on the Martech Landscape
About 64% of marketers say AI is "very or critically important to success in the next 12 months," according to the 2023 State of AI Marketing Report by the Marketing AI Institute; it's an increase of 13 point year over year.
Speaking of those pesky little artificial intelligence apps creeping up in marketing technology … how did AI impact the world of marketing technology solutions?
Well, for starters, The State of Martech 2024 report found 3,135 marketing-specific GPTs alone from OpenAI’s GPT Store. Brinker noted in his blog there are now 1.8 million AI projects on GitHub, according to the 2024 AI Index Report.
Brinker and Riemersma have seen a "massive acceleration" of new martech startups due in large part to generative AI, and, in turn, that's fueled the growth of the 3,000 new marketing technology solutions in the past 12 months.
In analyzing these non-qualifying GPTs, the vast majority (32.1%) provide content marketing capabilities, according to the report. The next most popular categories include GPTs to assist with social media marketing (8.4%), SEO (7.6%), collaboration (6.5%), and product management (5.6%).
“AI is not new in the professional marketing category,” Raviteja Dodda, CEO of MoEngage, said in the report. “Many companies in the professional marketing space have done work around AI, from dynamic content optimization to predictive modeling. But there’s a lot more happening today in AI with new models — and, of course, generative AI. These are all going to be a big tailwind for the cross-channel marketing category. After customer support, I think cross-channel marketing or the marketing more generally is going to be the major category in which we see significant tailwinds in terms of innovation, in terms of growth.”
Related Article: Make It Stop: Martech Landscape Hits the 5,000 Mark
Largest Growing Category: Content and Experience
When asked about the areas where growth was most pronounced, Brinker noted significant growth in the “Content and Experience” segment, particularly highlighting the emergence of 1,200 new martech tools powered by generative AI within that category alone.
Martech researchers did not designate a specific category for generative AI because it integrates across all categories, similar to previous AI and machine learning tools infused into martech. Brinker emphasized the prevalence of a long tail in the industry, where many applications and companies remain small, with few achieving billion-dollar valuations.
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Despite this, these smaller entities often thrive within their niches, contributing to the continuous expansion of the market. Brinker also reflected on the blending of service and software businesses, suggesting that distinguishing between the two might become increasingly challenging in the coming years.
Speaking of the estimated 433,410 advertising/marketing agencies in the world, Brinker told CMSWire, “Nobody ever stops to say … how will we ever choose which ones to use? But the truth is, people kind of figure it out; they find the ones that do the work for them. And not all those agencies stay in business. They come and they go, but there are a lot of small agencies that do very well. And one of the things I suspect we're starting to see is as software gets easier and easier to create, and as services become more and more powered by software, is this blending between what's a services company/what's a software company? It might be really hard to distinguish that in the next couple of years and I think that's one of the things contributing to this continuous growth of the long tail.”
Lowest Churn in Martech History
Brinker told CMSWire he was mostly surprised marketing technology solutions saw only 2.1% churn from 2023 to 2024: only 263 solutions fell off the martech radar. Usually we’ve seen about a 7% churn.
“That was so surprising, we had to check the data twice,” Brinker told CMSWire.
It appears that SaaS companies are quite resilient, according to Brinker. If they have a steady customer base and minimal cost of goods sold (COGS) for maintaining basic cloud operations, they are likely to survive for a long time, even if just barely, he noted in his blog post.
He further noted in our interview the paradox of this resilience following what many predicted would be a devastating year for SaaS businesses due to financial austerity. This resilience indicates a robustness in the martech sector that contradicts broader economic challenges.
“That doesn't mean those companies are going to stay around forever, either,” Brinker said. “They very well may go out of business this year. SaaS is actually relatively hard to kill. When you think about it, once you've got people and they're subscribed, and they're paying this, and the operational costs, the cost of goods delivered, is pretty modest. If you go into sort of an, almost keeping the lights on thing, it can sort of stick around for a while. I'm not saying that's a great thing. I'm just saying I think empirically when people talk about the landscape, going through this sort of spring cleaning … it’s cycles of births and deaths. The deaths might actually take a longer time, then the intuition would maybe lead you to believe.”
Related Article: Strategic Playbook for Martech and Digital Operations Integration
Marketers Like Their Integrated Apps
Another surprise for Brinker? The composability of martech tools has become a critical feature, as organizations increasingly prefer to layer specialized solutions on top of their central platforms (for instance, marketing automation, CRM or CDPs): 82.7% of the respondents said they do it. And 33.3% said, “They do it a lot,” Brinker added. This indicates a significant shift toward a more flexible, integrative approach in building martech stacks that can adapt to specific needs and enhance overall functionality.
So why do they constantly build on top of these centralized marketing technology applications? This decision is primarily driven by the superior functionality of the alternative tools, as 67% of respondents affirmed. Additionally, 31% choose alternative apps for a better user experience, even though using multiple tools can in theory complicate the user interface across different platforms.
But wouldn't layering small martech onto big martech lead to governance and cost problems, right? Not so much.
Another surprising insight from the survey is the cost-effectiveness of alternative tools. Despite the intuitive notion that adding more tools would increase expenses, 31% of respondents found it cheaper to use specialized tools for specific needs.
Additionally, governance might be simpler with specialized apps tailored for specific functions, offering better control and reducing complexity.
“This would be the memo to the CIO: 'I know you think the way to the best path of governance is to reduce the number of apps, and other things being equal, that's probably true. But things aren't always equal,'" Brinker said. "There are going to be cases where actually having another independent app that may actually be the better governance model for that capability.”
Layering Integrated Composable Solutions
We asked Cloudinary’s Bedine if his team commonly finds success using integrated tech on top of a centralized stack.
The answer: Yes, indeed.
“Our marketing automation platform, Marketo, is the centerpiece of our marketing stack, and we rely on it for all of our basic marketing and lead management needs,” Bedine said. “But we have also found that layering an integrated tech stack built with open and composable solutions on top of Marketo is incredibly powerful. It allows us to maximize the impact of each tool, enhance our marketing efforts, enrich our sales conversations and deliver strong return on investment.”
He cited an example where their Marketo instance has a bi-directional sync with their CRM (Salesforce), “which gives us sharp visibility into the sales funnel.”
“We have a data lake that is the foundation of the stack,” Bedine added. “We have a tool for lead routing and matching, deduplication and verification. We have a business intelligence tool that allows for data visualization and a level of advanced reporting that you can’t get from the tools themselves. They all work together to create a whole that is more than the sum of its parts.”
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