What’s affecting the growth in martech?

After a few waves of innovation and consolidation, the B2C martech landscape is dominated by a small number of broad suite providers. There’s also a very long tail of niche providers, some of which provide cutting-edge point solutions.

We estimate that three providers—Adobe, Oracle, and Salesforce, all of which grew their capabilities primarily through acquisitions—will account for between 40% and 50% of B2C martech spend this year.

Several factors will affect future growth in martech spending, including future innovation and capability expansion, influences within organizations, and external elements that directly affect marketers.

Capability Focus and Experimentation

As consumer expectations continue to rise and marketers seek to keep pace, more investment will be required across the martech spectrum. Notable areas of focus include:

• Data and insights. A confluence of circumstances has pushed data—and the insights it drives—to the core of marketing efforts. Customers expect brands to recognize them, know their interaction history, and anticipate their needs. Meanwhile, privacy regulations and the looming deprecation of third-party cookies have emphasized the need for a proprietary identity graph for most brands. And the speed, variability, and value of different data types and sources are forcing marketers to step back and rethink their approach.

The recent explosive growth of CDPs—albeit from a standing start—reflects marketers’ need to corral their data quickly and generate insights that inform in-moment interactions with consumers. Similarly, interest in data clean room providers is growing rapidly as marketers vie to extract maximum value from their first-party data and experiment with opportunities to work with the walled garden tech platforms.

• AI. Marketers have toyed with AI for several years to help with customer segmentation and analytics, but their efforts have been lackadaisical to date. Recently, however, marketers and agencies have begun to experiment with initiatives such as AI copywriting and creative tools like DALL-E 2—an OpenAI system that creates realistic images from natural language descriptions. Although it’s early days, expect to see copycat solutions from niche providers followed by potential acquisitions by marketing suite providers if these products prove successful. At the same time, marketing leaders must ensure efforts adhere to security, privacy, and other areas of compliance.

• Decisioning. With an increased emphasis on performance and ROI, the value of making the right decision has never been higher. Additional data, computing power, and analytics capabilities give marketers a greater opportunity to invest and experiment in decision management. Brands are testing approaches to centralized decisioning to leverage the breadth and depth of their customer data, thus driving ongoing dialogues with individuals. Decisioning also takes place at points of interaction with consumers, allowing brands to react in real time to customer actions.

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