In 2010, I dropped out of college to start a social-listening marketing technology company. Social media was in its awkward teenage years. We didn't know it then, but we were 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 graphic attempted to capture the full marketing technology landscape. It included just 150 solutions. The number of solutions has continued to grow over 30% per year. The marketing technology report includes over 11,000.
Many factors have led to that explosion, but the important thing is where it has left us and what it means for the future of the industry.
Where We Are and How We Got Here
In 2010, while I was busy coding away in my bedroom, something else was happening. America was starting to emerge from the wreckage of the 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. That led to the largest asset price bubble the world has ever seen.
In 2022, that bubble abruptly burst. Tech stocks corrected from historic highs. VCs cut back investments. Lenders and acquirers, concerned about catching a falling knife, cut their activity as well.
The entire tech industry has begun to feel the repercussions of what will be a long-term correction. M&A was down over 50% in 2023—back to 2008 levels.
Tech firms are struggling to adjust to that new capital desert they've suddenly found themselves in: 2023 was the biggest year of layoffs in a decade as VC investment fell to a five-year low that is likely to persist for years to come as investors digest the exuberance of 2021.
Thousands of martech companies are now caught in an impossible situation. They are sub-scale and not big enough to survive on their own. Many are also running out of cash with no new infusions on the horizon. Many have already cut to the bone. Ultimately, these companies will need to find a home.
At the same time, customers are feeling the pain of too many solutions. On average, enterprises have 120+ marketing technology solutions, according to Netskope. From 2020 to 2022, the share of marketers who cited unified customer data as a major barrier to their success grew from 65% to 70%, according to Gartner.
There are simply too many solutions from too many vendors, and integration experiences are too poor for marketers to keep up.
In short, the journey from a nascent martech industry in 2010 to its current state reflects a complex interplay of technological innovation, economic shifts, and market dynamics.
What's Next
The explosive growth in martech solutions, once fueled by an era of easy capital, now faces a stark reality-check. The financial landscape that supported the meteoric rise of thousands of marketing technology companies has drastically altered.
As the industry grapples with the aftermath of an asset-price-bubble burst and a more cautious investment climate, a period of consolidation seems inevitable.
The current environment will likely force many sub-scale companies to seek mergers or acquisitions as survival strategies.
Simultaneously, the overwhelming plethora of solutions in the market poses significant challenges for customers, demanding a more streamlined and integrated approach to martech.
The industry stands at a critical juncture where adaptation and strategic foresight will be key to navigating the post-bubble landscape, potentially leading to a more mature, efficient, and customer-centric martech ecosystem.
Five Tips on Martech Decision-Making for Marketers
To be a successful marketer in this ever-changing industry, consider the following steps in your decision-making when evaluating your marketing platforms for 2024 and beyond:
- Evaluate your stack of martech tools. Take a detailed look at your current marketing solutions and identify tools that have redundancies. Assess the effectiveness of how each tool is meeting your business objectives.
- Prioritize integration. Aim to have all of your marketing tools talk to each other seamlessly. Simple and cohesive integration will strengthen your marketing suite and make it easier for you to assess success.
- Choose scalable solutions. Considering the economy's uncertainty, intentionally choose solutions that can adapt to changing business goals.
- Research consolidation options. Be open to collaborating with companies that complement your current offerings. Don't hesitate to explore growth and consolidation opportunities for your business.
- Invest in data-driven solutions. Finding marketing tools that give you a holistic view of customer data and customer interactions will give you an upper hand when delivering personalized marketing strategies. Find tools that come with deep-data analytics.
More Resources on Martech Trends
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