Long-overdue Martech Consolidation to Make Life Easier for Rev Ops
With Ken Lordy
Senior Vice President, Product Management, True Influence
Marketing technology — martech — is a confusing mess right now.
Need proof? The annual Martech 5000 vendor landscape infographic swelled to 8,000 logos (that’s right, 8,000) for 2020, each claiming some vague upside in one of six key functional areas. That number has exploded from about 3,500 just five years ago.
B2B marketers used to log into their core automation systems – Marqueto, Eloqua, Hubspot – and perhaps two or three additional tools for specialized tasks. Now marketers are expected to juggle 10, 15, maybe 20 logins to do their jobs.
There are only so many data and task panes an individual can view on a daily basis before it all becomes noise. It’s bad enough for enterprises with dedicated demand gen or branding teams; for smaller businesses, it’s completely untenable.
Consolidation in the martech vendor landscape is long overdue – but it’s coming. The major players are beginning to acquire adjacent vendors. More importantly, marketers are demanding more efficient tools that let them focus less on remembering logins and more on winning new business.
In this post, I’ll look at the coming wave of martech consolidation and how B2B marketers can ensure their data and services partners work seamlessly in a new, simplified technology environment.
More Martech Isn’t Necessarily Better Martech
Ten years ago, when there were about 150 logos on the first martech landscape map, the ability to bulk-automate branched email campaigns was still pretty amazing. Martech was a revolution, and revolutions tend to get messy.
Some new tech categories – intent data, social sentiment tracking, multi-channel attribution – joined the mix, adding waves of new vendors. Some of these vendors brought new value. Others were simply me-too plays looking to win on price or newly identified market gaps.
As time went on, vendors latched onto industry buzzwords to spin up new offerings. Martech vendors positioned themselves as “best of breed,” hinging their pitches on minor, incremental differentiation in niche value points.
But B2B marketers, under pressure to deliver more and better leads with measurable ROI, routinely cited martech as a critical priority in annual spending priorities. They kept buying the latest and greatest tools, fueling the proliferation.
So today, marketers have so much tech that they don’t use a lot of it. Gartner reports more than 40 percent of martech functionality simply goes unused at a lot of companies. C-level executives are being warned about over-investing in martech, particularly as pandemic-related revenue shortfalls are shifting emphasis to near-term wins instead of long-term systems investments.
Time to the Downsize Martech Stack?
Nearly everyone agrees that it’s time to pare down the martech stack to a handful of core systems that handle the six key pillars of modern B2B marketing and sales:
- Social and relationships
- Advertising and promotion
- Content and experience
- Commerce and sales
Three Ways Martech Consolidation Is Taking Shape
Any check of industry news headlines shows that major vendors are making big deals to snap up adjacent technology and “complete” their platforms. Just in 2020, SalesForce acquired real-time CDP provider, Evergage; DemandBase bought Engagio to shore up its first-party capabilities; and SAP acquired omni-channel engagement specialist, Emarys.
Other deals (and they are announced weekly) typically come in three flavors:
- A niche provider partners with a major player to expand a feature set.
- Niche players announce partnerships to cobble together a new “platform.”
- Data providers / analytics houses announce integrations with industry-standard tools.
The first scenario, of course, can be a test run for an acquisition. SAP, Oracle, Salesforce and other major platform vendors have always aspired to the holy grail of a completely integrated, easy-to-use solution to all your marketing and sales problems.
But while acquisitions will certainly be a big part of the coming martech consolidation, I don’t think it will necessarily be the most significant one. CMOs simply have too much invested in those 20 or so tools they’ve bought to throw them all away and go all-in on a single provider. And there will continue to be meaningful innovations in martech, which seldom come from well-established monoliths.
I think a combination of the second and third scenarios will give B2B marketers what they really want – fewer, but more powerful tools that are easy to use.
In Part 2 of my series, I look at what delivers the real value in martech. Any guesses?