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In 2010, I dropped out of college and started a social listening marketing technology company. Social media was in its awkward teenage years. We didn't know it at the time, but he was starting one of the first companies in what would become the martech industry.
A year later, in 2011, Scott Brinker published the first Martech Supergraphic. The 2011 graphics sought to capture a panoramic view of marketing technology. Only 150 solutions are included. The number of solutions continues to grow by more than 30% annually. His Marketing Technology Report includes over 11,000.
There were many factors contributing to this explosive growth, but what matters is where it leaves us and what it means for the future of the industry.
where we are and how we got here
In 2010, while I was deep in my bedroom coding, something else happened. America was beginning to emerge from the wreckage of her 2008 financial crisis. The Fed embarked on a dual-track policy of $4 trillion in quantitative easing and 13 years of negative real interest rates. This created the largest asset price bubble in world history.
In 2022, that bubble suddenly burst. Tech stocks have corrected from historic highs. VCs have cut back on investments. Lenders and acquirers also ceased operations, concerned about catching a falling knife.
The entire tech industry is beginning to feel the effects of a long-term correction. His M&A in 2023 has decreased by more than 50%, returning to 2008 levels.
Tech companies are struggling to adapt to the new capital desert they've suddenly found themselves in. 2023 marks the year of the biggest layoffs in a decade as VC investment falls to a five-year low. As an investor, I would like to summarize the excitement of 2021, as this trend is likely to continue for many years to come.
Thousands of martech companies are currently in an impossible situation. They are subscale and not large enough to survive on their own. In addition, many companies are running out of cash with no prospect of new injections. Many have already broken their bones. Eventually, these companies will need to find a home.
At the same time, customers are feeling the pain of having too many solutions. According to Netskope, companies have on average more than 120 marketing technology solutions. According to Gartner, from 2020 to 2022, the percentage of marketers who say integrated customer data is a major barrier to success increased from 65% to 70%.
There are too many solutions from too many vendors, and the integration experience is too poor for marketers to keep up.
In short, the journey from the martech industry's infancy in 2010 to its current state reflects a complex interplay of technological innovation, economic change, and market dynamics.
what's next
The explosive growth of martech solutions, once fueled by an era of easy capital, is now facing a harsh reality check. The financial landscape that has supported the rapid rise of thousands of marketing technology companies has changed dramatically.
A period of consolidation seems inevitable as the industry deals with the fallout from the bursting of the asset price bubble and a more cautious investment environment.
In the current environment, many mid-sized companies will be forced to merge and acquire as a survival strategy.
At the same time, the overwhelming number of solutions on the market is creating significant challenges for customers, requiring a more streamlined and integrated approach to martech.
The industry is at a critical juncture, where adaptation and strategic foresight will be key to surviving the post-bubble situation, potentially leading to a more mature, efficient, and customer-centric martech ecosystem.
5 Martech Decision-Making Tips for Marketers
To succeed as a marketer in this ever-changing industry, consider the following steps in your decision-making when evaluating marketing platforms for 2024 and beyond.
- Evaluate your martech tool stack. Take a deep dive into your current marketing solutions and identify duplicate tools. Assess the effectiveness of how each tool achieves your business goals.
- Prioritize integration. We aim to enable all marketing tools to seamlessly communicate with each other. Simple, consistent integrations power your marketing suite and make it easy to measure success.
- Choose a scalable solution. Given economic uncertainty, purposefully choose solutions that can adapt to changing business objectives.
- Explore integration options. Be proactive in collaborating with companies that complement your current services. Feel free to explore opportunities to grow and consolidate your business.
- Invest in data-driven solutions. Finding a marketing tool that gives you a comprehensive view of your customer data and interactions will give you an edge when it comes to implementing personalized marketing strategies. Find tools with deep data analysis.
More resources on martech trends
Navigating the marketing AI landscape in 2024: 4 trends
Martech solutions marketers can't live without
Martech 2024: Three trend predictions
