MarTech Research Insights is based on an online survey that WARC and Moore Stephens fielded to more than 500 brands and agencies based in the UK and North America to gauge the current and future states of the marketing technology.
The marketing technology (MarTech) industry has seen rapid growth due to a plethora of consumer data and the fast-paced, real-time nature of marketing and consumer purchase decision-making.
The goal for MarTech tools is to help marketers optimize and automate the delivery of of the front of the sales cycle (the part sales delegates to marketing) at scale. Marketing technology ranges from content marketing tools tailored to different media, to data management, analytics and attribution tools, and vendors vary from start-up specialists to established, full stack, enterprise-level providers.
MarTech Research & Insights – A Macro View
Organizations are planning for increased MarTech use over the next 12 months, and 50% don’t have all the tools they need. Respondents to the survey expect to increase their MarTech budgets over the next year anticipate an average rise of 10%.
From 2011 to 2017, digital marketing Ad Spend has increased from $88M to $157M: 31% of total global Ad Spend. On average, brands are spending 16% of their marketing budgets on marketing technology; 7% in-house and 9% outsourced.
This spend is currently being focused on email marketing, with 85% of brands currently using a tool for email, and almost 75% using a tool for social media marketing. The majority of outsourced MarTech spending seems to be going to analytics, measurement and insights.
MarTech Research & Insights – MarTech & Media Spend
How has increased investment in marketing technology affected media spend?
- Increased investment in marketing technology has meant our media spend has decreased 28%
- Increased investment in marketing technology has meant our media spend has increased 39%
- Increased investment in marketing technology has not affected our media spend 33%
How will marketing technology budget to change in the US over the next 12 months?
- Increase 38%
- Remain the Same – 55%
- Decrease 7%
MarTech Research & Insights – Size of the MarTech Opportunity
The majority of agencies believe their clients don’t have all the tools they need and don’t fully utilize what they do have (58%). In comparison, half of client-side respondents think they have the tools they need. Of these, 26% go further, saying they have what they need and fully utilize all their tools.
Marketers are most likely to be using a MarTech tool for email; 85% are currently doing so, with a further 3% planning to do so in the next 12 months. The majority of respondents also use social media and CRM tools, whereas experience optimization and collaboration tools are currently used by around a third. However, both the latter will see growth over the next year, with almost 25% of additional respondents planning to begin using a tool over the next 12 months to assist them in user experience (UX) and collaboration endeavors.
Interestingly, US respondents are slightly ahead of the UK in their use of tools despite higher investment in the UK; 88% of brands in the US said they were using email, compared to 82% in the UK, and 71% said they were using CRM tools compared to 66% in the UK. Marketers from both countries expect to see the largest growth in the use of collaboration and experience optimisation tools, but the country results revealed a difference in the proportion expecting to be using a tool for analytics, measurement and insights in the next 12 months; 24% in the US expect the latter, compared to only 8% in the UK.
Thinking about the marketing technology capabilities within your company, what best describes your capabilities?
- We have all the tools we need and fully utilize them – 26%
- We have all the tools we need but don’t fully utilize them – 24%
- We don’t have all the tools we need but fully utilize what we do have – 31%
- We don’t have all the tools we need and don’t fully utilize what we do have – 19%
In which of the following marketing disciplines do you currently use a marketing technology tool?
- Email – 85%
- Social Media – 75%
- CRM – 68%
- Analytics – 64%
- Content Marketing – 63%
- Mobile – 58%
- Data Management – 58%
- Ad Tech – 57%
- Commerce, Lead management, sales – 56%
- SEO – 47%
- Marketing Automation – 41%
- Experience Optimization – 37%
- Collaboration – 28%
- None of the above – 9%
In which of the following marketing disciplines what do you expect to be using in 12 months time?
- Email – 3%
- Social Media – 7%
- CRM – 9%
- Analytics – 11%
- Content Marketing – 11%
- Mobile – 14%
- Data Management – 15%
- Ad Tech – 14%
- Commerce, Lead management, sales – 11%
- SEO – 17%
- Marketing Automation – 20%
- Experience Optimization – 24%
- Collaboration – 23%
- None of the above – 13%
MarTech Research & Insights – Limited Budget is a MarTech Barrier
Positively for an industry centered on the use of technology, when asked about barriers to MarTech investment and use, inadequate technology innovation was only selected by 14% of brands, with budget constraints emerging as a much more immediate concern for both brands and agencies (42%).
What are the main barriers to marketing technology investment and use in your company?
- Marketing Budget constraints – 42%
- Lack understanding of the tech – 25%
- Unclear on the value – 19%
- Lack skills and talent — 17%
- Unconnected data or poor data quality – 16^
- Inadequate tech integration – 16%
- Lack senior management support – 14%
- Internal silos – 13%
- Measurement and metrics – 12%
- None of the above – 11%
- Inability to differentiate between vendors – 9%
MarTech Research & Insights – Brands Prioritize CX Skills
Myriad tools for optimizing the customer experience are available to brands, and for the 60% that see customer experience (CX) optimization as very important for their company, investment in a MarTech tool alongside the talent investment evidently taking place could be the key to increased effectiveness. A bad customer experience can scupper even the best creative campaign, and marketers are becoming well aware of the need for this experience to be consistent across channels.
Of those respondents using MarTech for CX, only 17% claim to be able to optimize the experience across all channels and touch points. When asked which tools they use for optimization, CRM and analytics and tracking tools are most-used in both the US and UK. The US again appears to be ahead of the UK in its use of tools (with the exception of content management systems), however, the majority of technologies are being used by less than a third of respondents, despite the purported importance of CX to responding brands.
How important is customer experience optimization for your company or for your clients?
- Very Important – 60%
- Somewhat important – 36%
- Unimportant – 4%
MarTech Research & Insights – Don’t Have The Tools or Don’t Know How to Use Them
Whether this full usage of the tools is a perception of those using a full-stack provider or a fact remains to be seen, but agencies certainly have a much less bullish attitude towards their clients’ use of tools. Only 2% feel their clients have all the tools they need and fully utilize them, and a majority of 58% believe their clients don’t have the tools they need nor fully utilize those they do have.
The developing industry is finding new ways to adapt to continuing innovation, and established vendors are competing with emerging contenders by improving the ability for integration of their products with others, allowing customers to use their product as a base stack and plug in other specialist tech to produce a ‘best of breed’ stack. In the meantime, the pace at which the digital marketing industry is developing and diversifying is providing space for new entrants to gain a foothold in the market, some succeeding, some failing, and some ending up belonging to their competition.
Thinking about the marketing technology tools you currently use, which statement best describes your access to them?
- We use one marketing technology provider for the entire stack – 24%
- We use one marketing technology provider for most of our needs, but specialist providers for others – 42%
- We use specialist independent providers for all of our needs – 34%
MarTech Research & Insights – Worth Noting
Brands are spending 16% of their marketing budgets on marketing technology
- The MarTech industry has seen rapid growth in recent years.
- Driven by a wealth of consumer data and the fast-paced, real-time nature of marketing and consumer purchase decision-making, MarTech tools have been developed to help marketers optimize and automate the delivery of marketing messages at scale.
- On average, 16% of budgets are spent onMarTech (18% in the UK and 14% in the US).
The MarTech market could be worth more than $34B
- Using MarTech spend data from the survey, and WARC Ad Spend data, the UK and North American MarTech market could be worth up to $34B this year – if there is a representative sample.
- This figure is reflective of a market that has seen huge growth in terms of the number of vendors and M&A activity over the past few years.
- In 2011, chiefmartec. com listed around 150 companies in the space and in 2017 there are almost 5,000 companies offering myriad services to help marketers meet their goals and objectives.
Brands expect MarTech budgets to rise by 10% over the next 12 months
- Going forward, this research highlights the opportunity for growth in the sector, if brands can secure the necessary investment and organizational change required. More than 40% of respondents expect their MarTech budgets to increase over the next year, by an average of 10%. This means that mMarTech spend could reach to more than $43B by the end of 2018.
- Set to see the biggest growth this year in terms of MarTech use is experience optimization. Almost a third of brands plan to use a tool to assist them in this discipline in the next twelve months, and it is a key priority for the majority of respondents.
50% of brands don’t have all the MarTech tools they need
- The opportunity presented by MarTech for vendors and agencies is large; half of brands and 58% of agencies don’t think they (or their clients) have the tools they need. Over the next year, brands are most likely to begin using experience optimization, collaboration and marketing automation tools.
- Particularly of focus is the skill-set associated with user experience. Though the majority of marketers feel they have the internal skills and talent they need to capitalize onMarTech investment, they have also seen an increased need for skills associated with MarTech use, and customer experience skills are at the top of their list of priorities.