Marketing Technology May Never Consolidate (But That’s a Good Thing)

Credit: Illustration by Kotryna Zukauskaite for Advertising Age

You’ve certainly seen those eye charts perplexing to classify hundreds of selling record vendors by category. There are a iconic Lumascapes by Terence Kawaja. And there’s my possess selling record landscape, that final year orderly 3,874 martech solutions on a singular slide. (Spoiler alert: a arriving 2017 book will have more.)

These charts incite a abdominal greeting of startle (“How can there be so many?”) followed by fear, doubt and doubt (“How do we collect a right ones?”). One selling executive referred to my landscape as a kind of striking fear novel for CMOs.

Instinctively, maybe as a coping mechanism, many people interpretation that a martech marketplace of such scale is unsustainable. It’s firm to consolidate, and soon. And then, appreciate goodness, we will have a docile series of selling program choices.

But what if that didn’t happen?

Before we start sputtering or twitching, hear me out. Because not usually is that unfolding plausible, it indeed could be a good thing.

First, let’s explain what we meant by consolidation. People mostly support converging as a rebate in a series of vendors in a space—i.e., a series of tiny logos on that selling tech slide. So going to 50 martech companies from 5,000 would consecrate vital consolidation.

While that’s an easy metric to count, however, it ignores a relations scale of those vendors. A some-more picturesque perspective would uncover a placement of income among them. Adobe, with $1.63 billion of income for a Marketing Cloud in 2016, is 1,000 times bigger than a martech startup that only done a initial $1 million.

Through that lens, a marketplace is already consolidating. It looks like a pyramid: a few billion-dollar giants on top, dozens of firms earning $100 million or some-more during a subsequent spin down and thousands of companies with reduction income next that.

But interestingly, during a same time that a ones on tip are flourishing larger, a series of companies on a bottom is still increasing. So by income distribution, a attention is consolidating. But by series of firms, it’s expanding.

Is that a paradox?

No, it’s indeed a sincerely common marketplace structure in a age of digital platforms famous as a “long tail”—a tiny series of blockbusters and a clearly gigantic route of ever-more-niche offerings. We see this with Netflix (movies), Amazon (books) and Spotify (music).

In fact, platforms pull their strength from a colourful ecosystems that freshness on their foundations. For instance, Apple with iOS and Google with Android have “consolidated” a mobile marketplace while concurrently enabling a prolonged tail of millions of mobile apps.

Martech is a tiny different, since many of a vast vendors—with a important difference of Salesforce—initially downplayed a height event and positioned themselves as “all in a box” solutions instead. (In their defense, Steve Jobs was primarily demure to open adult a iPhone to third-party developers too.)

However, that’s changing. Adobe, HubSpot, IBM, Marketo, Oracle and others now any support and foster integrations with dozens or hundreds of other selling record products. And new technologies such as patron information platforms and integration-platform-as-a-service providers are rising as platform-like alternatives.

There’s flourishing rival vigour for who will assemble a biggest and best ecosystem. They’re encouraged by a just cycle that successful platforms can achieve. A vast ecosystem attracts some-more customers, and some-more business attract a incomparable ecosystem.

Stable platforms revoke a cost and risk of adopting third-party products. This encourages some-more of them to be adopted and, in turn, some-more to be developed. (How many apps have we commissioned on your smartphone? Martech won’t be that simple, though a element is a same.)

The outcome could be a marketplace that is effectively combined during a height level, nonetheless perfectly different in a series of specialized products accessible to block into those platforms. Some third-party developers will be big, with category-leading, horizontally-applicable applications. Others will be tiny and narrowly-focused on some-more straight solutions. It will be a extensive prolonged tail market.

You’d have a advantages of fortitude and plug-in harmony that good platforms offer, including a common fortitude for unifying patron data. But you’d also have a advantages of augmenting those platforms with artistic third-party products that best fit your sold business needs, strap a latest innovations and give we a leisure to compute in a digital world.

The charts full of logos won’t get any reduction busy, though for marketers, it could be a best of both worlds.

Scott Brinker is a author of “Hacking Marketing” and editor of

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