Sep 6, 20173 min read

Becoming a martech mastermind: Agility, proficiency and accountability

The evolution of Scott Brinker’s iconic Marketing Technology Landscape graphic since 2015 tells the tale of an industry rapidly evolving and bursting at the seams. That was the year the number of martech companies doubled year over year to nearly 2,000 vendors, all the way from just 150 when he began illustrating the proliferation of martech solutions back in 2011. Last year it became a “supergraphic,” itemizing

close to 4,000 martech vendors across categories like Advertising & Promotion, Content & Experience, Social & Relationship and more.

Today, it’s ballooned into the “Martech 5000,” comprising 44.2 percent private companies, 48.8 percent investor-backed startups and 6.9 percent enterprises (defined as having at least 1,000 employees or being publicly owned).

In fact, the monster that is martech has the potential to swallow ad tech whole. In this post, we’ll have a look at the current state of martech and what you need to become a mastermind in this exciting, rapidly growing space.

The convergence of ad tech into martech

Sure, ad tech came first, but the automated buying and selling of display, mobile and video ads is, at its core, just a function of marketing. Publishers had a need to sell inventory and advertisers needed to buy; advertising technology permitted these activities in an efficient and accountable way.

Martech has always been about more than the automation of a market, though. Born out of CRM (customer relationship management) systems like Salesforce, martech has empowered marketing and sales teams with tools for lead nurturing, contact management, attribution and analytics, customer support and more.

While ad tech helps brands complete a task, martech is all about achieving specific business outcomes. In a sense, this convergence of ad tech and martech we keep hearing about better fits the biological definition of the word than the physical one:

The technology that empowered automated ad buys evolved first, but ad tech’s success combined with “environmental” conditions gave rise to tools across other facets of marketing, as well. Decreasing investments in ad tech in favor of martech makes sense in this context; for a while, ad tech was the only game in town. Now, technology can empower smarter email marketing, search and social advertising, retail and proximity marketing and more.

It makes sense that companies are diversifying spend as their marketing campaigns become more comprehensive, and investors are following suit.

What the rise of martech means for organizations

Marketing budgets now comprise 11 percent of total company budgets on average, up slightly from 10.4 percent in February 2012, according to Deloitte’s The CMO Survey. However, the way those budgets are spent has changed dramatically.

Laura McLellan at Gartner predicted early in 2012 that in five years, the CMO would be spending more on IT than the CIO, a claim considered outrageous by many. Late in 2016, Gartner confirmed that indeed, CMOs allocated 3.24 percent of revenue to technology spending, which is very close to the 3.4 percent of revenue CIOs earmark for IT.

Today, marketing technology represents 33 percent of the marketing budget, while 28 percent of that martech spend goes toward infrastructure (e.g., servers, storage, network) to run marketing software.

In the aforementioned Deloitte study, researchers also found that companies using marketing analytics in corporate decision-making tended to invest more in marketing as a whole. An examination of three groups — high, medium and low analytics usage rates — found that marketing budgets were 70 percent bigger in the high group (14.8 percent of total budgets) compared with the low group (at 8.7 percent).

Gartner’s Jake Sorofman said last year:

Marketing technology, once a relatively narrow and specialized adjunct to enterprise IT, is now garnering investment nearly equivalent to the core systems that run the business.

I’d go so far as to suggest that right now, marketing is a core system of the business, in progressive organizations.