Marketing has changed quite a bit over the past few years, thanks to the emergence of social media channels, mobile technology, and other formats that open up greater possibilities to companies. A new report from TechCrunch, written by Ajay Agarwal, breaks down this potential growth – and how it could benefit some companies financially.
The author broke down several statistics with marketing tech spending, indicating that (per IDC) $32.4 billion would be spent on marketing technology through 2018, indicating a 12.4 percent growth per year.
Agarwal referred back to a previous report he posted three years back, and compared to how much has changed in the marketing tech world since that time. He pointed out many acquisitions within that time frame, with some companies selling for billions of dollars, including ExacTarget (going for $2.57 billion to Salesforce), Criteo ($2.54 billion by IPO) and Responsys ($1.5 billion to Oracle).
In addition, he discussed the emergence of marketing automation, which has suddenly become a “must have solution” for CMOs in business. Hubspot and Marketo both show value in this department, somewhere over $1 billion apiece, with increased growth per month.
While Agarwal admitted that it will be a while before we see a $10 billion titan in the marketing tech world, we are getting pretty close to seeing a $5 billion tech company, pointing out three key drivers that will “get us there”. These were broken down from his article.
Predictive analytics and machine learning: The sheer volume of data about buyers, channels and communities that marketers can now harness is astonishing – and it’s the largest opportunity ever seen for CMOs and vendors alike. With sales and marketing automation in place to provide core workflow and plumbing, an ecosystem of new startups and categories has emerged to deliver added value and insight across marketing functions and channels. The best of these companies use machine learning and data science to tap into the marketing and sales automation data sets – and troves of external third-party data – to deliver insights and capabilities. This is especially valuable for B2B companies, where lead times are longer and purchase decisions are more considered. Early pioneers in predictive marketing include Infer, Lattice and 6Sense*.
Consumer identity and personalization: For B2C companies, identity is emerging as the backbone of user experience and digital commerce – similar to what lead management and marketing automation are doing for B2B. Most consumer purchases are quick, ephemeral in nature, and done with limited research. New B2C marketing competencies focus on user identity data and personalization, with a goal of having the right content and experience for each user (during the three seconds they are looking at that page on their tablet or mobile device). It’s the difference between a sale and a bounced user. Key players include Bloomreach, Sailthru, Monetate, Optimizely, Kahuna, and Appboy – all of which focus on optimizing web pages, mobile apps and/or email to drive the highest conversion and revenue per visitor.
Consumer behavior and targeting: Beyond identity, consumer behavior data is becoming increasingly critical for B2C marketing and commerce – location, past purchase behavior, demographics, preferences, household information, etc. This challenge has become increasingly difficult in a cookie-free mobile world, which makes traditional desktop targeting techniques useless. As a result, marketers are relying on vendors that bring cross-device targeting capabilities and others that can ingest anonymous consumer behavior on your website. The best marketers are leveraging this rich information to build massive in-house databases of customer purchase and browsing history. Companies like AgilOne, SmarterHQ, TellApart, Retention Sciences and others are leading the way on this front
To conclude his piece, Agarwal pointed out new frontiers for the tech marketing field, including data science, machine learning and behavioral insights, which in turn can drive optimization and personalization. This could provide great opportunity for vendors and CMOs alike, and, eventually, create the first $10 billion marketing tech company.
