The global marketing technology market grew 22% last year and is now valued at an estimated $121.5bn, according to a new report from WARC which also highlights an increased need for associated data skills.
Martech: 2020 and beyond, published today in association with accountancy and business advisory firm BDO, is based on an annual survey of more than 750 brands and agencies in North America, UK, Europe and Asia-Pacific to assess the current state and future expectations of the marketing technology industry, including automation software, analytics tools and emerging tech such as AI.
Here are the key findings:
Martech budgets steady
The majority of marketers globally expect martech budgets to stay the same over the next 12 months, but a significant proportion (43%) expect an increase; only 4% expect budgets to decrease. On average, brands in North America and the UK are spending 26% of their budgets on martech compared to 23% last year.
The split between in-house and outsourced technology is around 50:50 in all regions – a ratio that offers room for growth both in the outsourced and in-house tech vendor markets.
Marketing technology is helping marketers to optimise their media spend. Last year most brands felt that increased investment in martech had caused their media spend to decrease, but this year that number has dropped to under a third; most respondents feel that media spend has been unaffected by martech investment.
Use and capabilities of martech
More than three quarters of brands use martech to assist them with email and social media, and around two-thirds of brands use martech for content, CRM and analytics. But as brands focus on customer experiences over specific media, tech that helps marketers with experience optimisation and tracking are developing areas in the martech space.
The overall picture is one that has not yet reached maturity; only 24% of global marketers, 27% of UK marketers and 15% of North American marketers think they have all the martech tools they need.
The need for data skills persists
Globally, 68% of brands and 83% of agencies have seen an increased need for data skills associated with the use of marketing technology. Creativity was selected by 49% of brands as a priority over strategy and data, of which 21% considered it to be a top priority. In contrast, only 25% of agency respondents feel creativity should be the focus, prioritising instead strategy and data.
A key driver of the need for outsourcing marketing technology functions to agencies is a lack of expertise on the brand side; skills are a much-discussed topic, whether in terms of upskilling internally or hiring discipline specialists, and opinions on which skills should be the priority differ among businesses.
Increased focus on CX
Customer experience (CX) has become a strategic priority for businesses competing for customers’ attention in an omnichannel world. Despite 96% of brands surveyed stating CX is important both offline and online, less than 50% are using martech to track customers between channels. But 73% feel they have the technology in place to optimise the customer experience across most, if not all, channels and touchpoints.
Future growth lies in adoption of latest technology
Less than 40% of responding brands are currently using The Internet of Things (IoT) or connected devices, and a further 36% have no plans to use the tech in the next 12 months.
Artificial intelligence (AI) and cross-device identification (XDID) are cited as emerging technologies that aid marketers in the focus on customer experience. Biometrics and facial recognition are the least-planned by respondents.
Amy Rodgers, Managing Editor, Research & Rankings, WARC, commented: “The wealth of technology available presents a myriad of choices for marketers, who have to decide where to place budget – a decision that carries risk when it comes to nascent technologies. This perception of risk is reflected by 29% of respondents selecting a lack of understanding of the technology available.”
“The fact that this proportion has not decreased since last year illustrates the constant change in the industry and reinforces the need for specialist martech skills to ensure effective budget allocation.”
Sourced from WARC, BDO