The martech landscape is experiencing sequential cycles of fragmentation and consolidation. Driven by the widespread adoption of enterprise cloud solutions, the Martech 5000 (the annual list of all martech vendors and tools) now contains marketing technology solutions from 6,242 vendors.
This is a collection of many crowded sub-industries, given that “martech” covers everything in the list below and more:
- Customer Relationship Management (CRM).
- Marketing Automation.
- Content Management Systems (CMS).
- Data Management Platforms (DMP).
- Tag Management.
- Account-Based Marketing Platforms (ABM).
This growth shows no sign of slowing, either. According to Gartner, the software as a service (SaaS) industry is expected to reach 45 percent of total application software spending by 2021, and the average enterprise uses 91 marketing cloud services.
This increases the challenge for marketers if they cannot use these platforms and tools seamlessly.
From complexity to enlightened simplicity
There is a paradox at the heart of this situation: at a time when the martech landscape is more fractured than ever, brands require cohesion. Digital marketers have moved beyond a focus on the buying cycle and onto customer experiences, from first interaction through to retention. In effect, the martech landscape is a reflection both of fragmented consumer journeys and advertisers’ struggles to keep pace with these developments.
Complexity often leads to informed simplicity, and this is the emerging reality for many marketers today. Amidst so much flux, patterns are coming to the surface as the benefits of consolidation appear with greater prominence. Rather than selecting a range of off-the-shelf solutions for specific requirements, there is an ongoing shift toward enterprise cloud platforms that can create end-to-end customer experiences.
These technologies can manage content at scale, facilitate collaboration across departments and territories and provide accessible insights from customer data.
The blurring of lines between ad tech and martech seems inevitable within this context. The two industries arose in different environments but have converged on a similar goal: using first- and third-party data to shape effective consumer interactions through content. As such, the densely populated martech world is also home to a few dominant giants who are demonstrating the advantages of investment, innovation and integration.
The OASIS vendors: Oracle, Adobe, Salesforce, IBM, SAP
The component companies of the OASIS acronym (Oracle, Adobe, Salesforce, IBM, SAP) offer insights, instruction and advice on the SaaS market today and in the future. While they all started from very different points, they are building out their cloud solutions to try and provide the end-to-end offering their customers seek. For some, this depends on new product developments, while others acquire start-ups and competitors, and others partner with online giants to plug gaps in their list of capabilities.
Oracle’s relational database technology remains the fulcrum of the business; with over 40 years’ experience in this area, this remains a core area of strength, even after the launch of a host of new cloud products. This heritage has provided a healthy platform on which to build the Oracle Marketing Cloud, which caters to both B2C and B2B customers.
The company’s mission statement is simply:
“We help you simplify your IT environment so that you can free up money, time, and resources to invest in innovation.”
Through the acquisition of BlueKai in 2014, Oracle added a leading data management platform (DMP) to its stack to power personalization and made a clear statement of intent to the martech industry.
More recently, this has been backed up by the purchases of brand safety software provider Grapeshot and digital measurement firm Moat. This is part of a multifaceted strategy to build an end-to-end customer experience platform through innovation, acquisitions and integrations.
For example, the Oracle Data Cloud is open to more than 500 partners, which allows brands to bring their data into the Oracle ecosystem. Here, they can maximize the data’s value through marketing automation tools like Responsys and Eloqua. Combined with the launch of a new analytics platform, Oracle is making a serious play to be the central tech stack of choice for marketers who want real-time marketing personalization, at scale.
Learning from Oracle
Oracle’s approach is to focus on client business objectives and develop a tailored martech stack that will help achieve them. This is notably different from a product-driven approach, but it is dependent on a significant amount of faith from customers that Oracle will deliver the optimal mix of capabilities for their audience.
With over 22,000 products available, Oracle certainly has the bases covered, but helping customers navigate this ecosystem will be an important aim, as it should be for all vendors.
Oracle is investing to put customer experience at the core of its products and is using an open approach to partner integrations to bring this to light. In fact, Oracle’s approach to partnerships is particularly comprehensive and shows how strenuously it wants to carve out a dominant position in this market.
Adobe’s evolution into an enterprise cloud giant has been cemented by the launch of the Experience Cloud, which encompasses a suite of advertising products, analytics software and design packages.
When considered alongside acquisitions like video advertising company Tube Mogul and e-commerce giant Magento, the scope of Adobe’s customer experience ambitions becomes clear. In the case of Magento, Adobe has added a significant and hitherto missing aspect of its offering, following in the footsteps of Salesforce’s purchase of Demandware and Oracle’s NetSuite acquisition in 2016. Thus, Adobe has the component parts needed to compete on the data, creative, advertising and e-commerce fronts.
Certainly, their pitch is that only Adobe can offer an end-to-end cloud solution for everyone from artists to enterprise corporations.
The challenge lies in turning this strategy into reality for customers, who are striving for accessible insights and cohesive implementation. Adobe’s proprietary Sensei technology, which uses forms of AI including machine learning and deep learning, personalizes customer experiences across all Adobe Cloud suites.
Learning from Adobe
Brands place strong emphasis on customer experience today, and the reorganization of products into one overarching Experience Cloud helps to provide clarity to Adobe customers. This alignment of company objectives with those of the customer provides a useful reference for other vendors in this space.
Adobe has also managed to build out from its base as a design and document software company by steadily adding to its advertising and data departments, before unifying these threads with elements like video and AI. The acquisition of Magento bolsters this offering by giving Adobe another dimension it has simply not possessed in the e-commerce arena. Much like Salesforce and IBM (among many others), Adobe has reinvented itself in line with market demand.
Everything starts with CRM for Salesforce, but it certainly doesn’t end there. At present, Salesforce’s cloud products include everything from App Cloud to Commerce Cloud and Sales Cloud, with the stated aim of powering “intelligent customer journeys.” Newsworthy acquisitions have provided a strong indication of Salesforce’s future priorities. The $800 million purchase of marketing intelligence platform Datorama this year added strength in analytics and reporting, while the acquisition of CloudCraze of has brought advanced B2B commerce capabilities.
This is unified in the Marketing Cloud with another acquisition, Krux, which has been rebranded as “Salesforce DMP.” The strategy here is to market Salesforce Einstein, the company’s proprietary AI technology, as an on-demand data science team for all customers, enabling new insights and audience targeting. Partnerships have been an important element in Salesforce’s growth, too, when compared to its rivals. A global tie-in with Google allows for much closer integration between Salesforce Marketing Cloud and Google Analytics. This is an important strategic move, as it gives Salesforce a route to real-time marketing optimization.
Learning from Salesforce
Salesforce has shown a willingness to work alongside competitors in areas where it will provide a growth opportunity. Given the convoluted and all-encompassing nature of modern enterprise cloud stacks, it is inevitable that Salesforce will compete directly with companies in some areas and indirectly (if at all) in others. An appreciation of these market forces can lead to long-term advantages, but there are still risks. The rewards from a partnership between Salesforce Einstein and IBM Watson have been less clear-cut, for example.
IBM’s ongoing martech reinvention has seen it evolve from a fragmented data architecture to a more cohesive cloud platform that reflects the convergence of ad tech and martech.
In particular, a partnership with MediaMath reveals a strategy to add media buying to the IBM offering. To date, the huge potential of IBM Watson remains largely untapped, but using this deep learning technology to improve the accuracy of personalization could see IBM carve out an enviable position in a competitive market.
McKinsey has said:
In our experience, 15 to 20 percent of marketing spend can be released through better marketing return on investment (MROI) efforts, either for reinvestment for growth or return to bottom line.
There is certainly a need for this development today. Further down the line, Watson could be used to personalize content for each individual user in real time, based on their past interactions with a brand. Getting the product to market in collaboration with MediaMath is a step toward that lofty ambition.
While IBM’s Marketing Cloud has attracted fewer headlines than those of Adobe or Oracle, it began its life in 1999 and boasts a range of advanced marketing automation tools. The acquisition of creative agency Resource/Ammirati and the development of IBM iX have added expertise in experience design and business consultancy, too. This is a different path to “end-to-end customer experience” when put up against Salesforce, for example, but the pieces are falling into a recognizable shape.
Learn from IBM
IBM is undoubtedly one of the tech giants, with a heritage in both hardware and software that few can rival. However, lately, it has been eclipsed in martech by Adobe, Oracle and Salesforce.
Headlines like “IBM’s Watson gave unsafe recommendations for treating cancer” (from TheVerge) have not helped IBM’s case, as they show the pitfalls of creating high expectations and not meeting them. There is still plenty of time for IBM to deliver on Watson’s undeniable potential, but it needs to find relatable use cases with tangible results. The importance of getting a great product to market in the right way is a key learning in this case.
SAP, Europe’s biggest software company, has also taken advantage of the demand for enterprise cloud solutions by launching SAP S/4HANA, which it describes as the “digital core” of its stack.
The SAP Marketing Cloud is underpinned by machine learning algorithms that can tailor customer interactions from initial engagement through to loyalty. In that sense, its positioning chimes with the mood of the times, as it reflects the evolution of digital marketing from purchase journeys into the full spectrum of customer touch points.
The grand vision for SAP is to use software to “help the world run better and improve people’s lives,” a mission that they believe is enabled through an integrated approach to data and technology.
The purchase of sales effectiveness platform CallidusCloud for $2.24 billion in January of this year reflects SAP’s desire to stay true to its aim of delivering on the metrics that matter for its client base. With over $2 billion earmarked for investment in the Internet of Things (IoT) products by 2020, there is significant potential for the S/4 HANA database to become a powerful driver of customer experience in the home and on the move.
Learning from SAP
SAP has managed to maintain a clear focus on its value to customers while steadily improving its offering to keep pace with the market. The company is also focused on investment in the areas that will drive business impact, whether through acquisitions like CallidusCloud or the ongoing research into new IoT products.
That said, SAP has had less success than some of its traditional competitors when it comes to broadening its appeal. As more businesses seek out an intuitive, effective cloud platform, there is a burgeoning market if SAP can simplify some of its integrations. As a result, vendors can learn from SAP both the importance of clear-sighted vision and the imperative to change direction when the right opportunities arise.
What can other martech vendors learn from the OASIS companies?
As noted at the beginning of this article, the martech ecosystem is vast and contains a range of highly sophisticated vendors. The likes of Marketo, HubSpot, BrightEdge, Hootsuite and Adestra, to name just a few, are all offering enterprise cloud solutions that power better content and customer experiences.
Nonetheless, it is helpful to view the OASIS vendors as a microcosm of the wider trends set to shape the industry for the coming years. In terms of lessons all vendors can take away, the following seems an apt summary:
- Emphasize the importance of data quality: Vendors like IBM are promoting the fact that their algorithms no longer need huge amounts of data to drive business impact. By promoting the importance of both quality and quantity, martech companies can engage a wider audience.
- Work with customers to get the most out of technology: Advanced technology does not replace strategy. Vendors need to act as partners so that their customers can avail themselves of the full power their technology holds. This gap between client expectation and reality is often created by a lack of understanding — the onus is on vendors to bridge it. In-built assistants within the user interface, chatbots and training sessions are all great ways to achieve this.
- Showcase the benefits of integration: The emerging pattern in today’s martech ecosystem is of integration leading to innovation. This is a message that sits well with customers, but each vendor needs to back this up with proof.
- Focus on outcomes over capabilities: Businesses need to gain insights from their data, and they need to deliver seamless customer experiences. Sophisticated vendors are focusing on this as their sales pitch, rather than centering on the products they can offer.