Joe Stanhope, VP and principal analyst at Forrester, will discuss the state of the marketing technology ecosystem – and what marketers need to do about it – at Industry Preview on January 18th, 2016, in New York City.
Marketers face a complex ecosystem filled with thousands of vendors and redundancies. “There are way too many vendors doing not enough stuff,” said Joe Stanhope, VP and principal analyst at Forrester – and former marketing SVP of martech firm Signal.
Stanhope, who helps marketers understand the technology landscape, sees an unnecessarily complex marketing ecosystem.
Marketers have to cobble together too many solutions. When new technologies crop up, so do new companies, which then require painful integrations into the rest of a marketing stack. Stanhope would prefer to see “marketing technology open and flexible enough to incorporate new touchpoints, channels or devices, so we don’t have to re-platform every few years.”
Stanhope talked to AdExchanger about the problems and opportunities in the marketing technology space today.
AdExchanger: What challenges do marketers face today?
JOE STANHOPE: Marketers get squeezed on both sides. They are under pressure from their customers, who expect omniscient, relevant, timely, enjoyable interactions. Sophisticated customers penalize marketers that don’t [provide these]. Internally, marketers are under pressure to deliver business value and make money. There is not a blank check for marketers anymore.
How do those challenges play out in their technology decisions?
Marketers would like less complexity. But to deliver value for the brand and their customers, they are forced to acquire a lot of technologies and string it all together, which is resource-intensive, expensive and challenging.
They don’t have a choice. You can’t buy everything you need in one place, because there is no single source of ad or marketing technology, and that is unlikely to happen in the future. So they can’t sit around and wait for it to come together. They will admit to even having acquired redundant capabilities in doing their work, because they’re so desperate to make progress across the company. I would posit that the actual tech landscape for marketing is an unhealthy technology ecosystem and that it exacerbates a lot of the problems marketers face.
What do you mean by “an unhealthy technology ecosystem?”
I have never seen a market that likes to take features and functionality and turn them into full-on categories of technology. The fact that there are commoditized vendors that can exist in niche categories is not normal. You don’t have the traditional curve of a tech market, where there is innovation, and then it expands, matures and consolidates. It keeps on getting bigger and bigger and more complex and commoditized. And that’s doing marketers a disservice when it’s so difficult to understand the market and select appropriate vendors.
What causes this unhealthy ecosystem?
Marketers bear some of the responsibility for this. Vendors build products based on the way marketing organizations use them and pay for them, so that has contributed to that complexity. I don’t want to say vendors are bad or evil, and neither are marketers. This has been a spiral that everyone has participated in, in many ways quite willingly. But you reach a tipping point where the market is not healthy anymore.
What should marketers do?
My theory is that we need to refactor the way we think about marketing tech. If it’s not going to be magically fixed for marketers – and it isn’t! – then we need to adapt the way we think about technology as marketers: Think more strategically and about our destiny, and be more mindful about how we acquire the tech and how we use it. They need to identify the aspects of marketing tech that are strategic and drive business value, and to reduce focus on standalone or commoditized capabilities. Many categories of martech, while extremely important and effective, are also mature and standardized – for example, email – so we need to reconsider how these fit into a strategic view of the marketing technology stack.
Could we see verticalization of marketing tech? A CPG advertiser has dramatically different CRM needs than a financial firm.
From a pure, code-based perspective, it tends to be pretty generic. But I do think there will be a trend of verticalization over the next three to four years. As marketing technology and ad technology come together and brands put pressure on tech providers to be more performant, there will be an intermediary phase where you see an explosion of niche providers and verticalization. As those niche providers get squeezed in the Lumascape, they’ll need to differentiate, and one of the ways they will do that is through verticalization.
What do you make of Salesforce’s acquisition of Krux?
The Salesforce acquisition of Krux is fairly procedural and makes a lot of sense. Adobe did it first five years ago. Oracle did it two years ago. It’s interesting that it took Salesforce this long. DMPs will be rationalized the future. They will become part of a bigger cloud, or maybe they get absorbed into DSPs and exchanges.
Where are leading-edge marketers moving in their setups that you think others will follow?
A lot of them are thinking about technology in terms of personalization: the ability to deliver a relevant, timely, device-specific experience to customers anywhere in that consumer life cycle, on any device and channel.
The more sophisticated ones I’m dealing with are doing a lot more work in identity resolution, the ability to recognize and build a profile of customers across touchpoints and channels. Identity resolution is glue for the marketing process. It’s becoming a strategic capability, not something you can make up as you go along.
This interview has been condensed and edited.
This post was syndicated from Ad Exchanger.