Marketing Technology Landscape Supergraphic (2020): Martech 5000 — really 8,000, but who’s counting?

Martech Landscape 2020 - Martech 5000

Welcome to the 2020 edition of the marketing technology landscape.

FIRST, a huge debt of gratitude for Scott’s continued passion, commitment to and thought leadership of the MarTech industry/community. I want to post this right up front as a Thank you and to share Scott’s desire regarding his content.

Feel free to use and distribute the 3200×1800 slide version of the image in any presentation or article you like, as long as you share it “as is” with attribution. And if you want to print the high-resolution version as a poster for your own personal wall display, go for it.

For any other uses of the high-res graphic, please contact me for permission first. For almost all legitimate cases, I’m happy to grant it. You can also still get the original 2011201220142015201620172018, and 2019 editions of the landscape.

https://www.linkedin.com/in/sjbrinker/

Yes, it grew once again, by 13.6%, up to a total of 8,000 martech solutions.

That’s after 615 from the 2019 landscape went away, either consolidated with another martech company or simply gone defunct. If you were predicting consolidation, an 8.7% churn rate from one year to the next is pretty significant attrition to support that narrative.

But the rate of new venture creation — or at least new venture discovery in our research — outpaced the forces of consolidation once again. In fact, if we first remove the 615 from last year’s 7,040 count, then the growth of new entries on the landscape was actually 24.5%.

Think about that: 1 in 5 of the solutions on this year’s martech landscape weren’t there last year. That’s almost the equivalent of the entire 2015 marketing technology landscape.

There were other martech companies that were acquired from the 2019 landscape — but they were acquired by firms that weren’t already on the landscape. So those transactions didn’t count as consolidation, just a change of ownership. They did not shrink the net number of solutions available to marketers.

The new design of the graphic this year — more on that in a bit — gave us space to add in a legend with the counts for the number of solutions in each category. Here’s how the categories grew relative to 2019:

Martech Category Growth 2019-2020

Data is by far the fastest growing category, up 25.5%. It makes sense. We have a ton of data. The challenge now is figuring out how to harness it effectively. That’s driving a lot of software innovation in the space.

We also calculated the fastest growing subcategory in each category, by percentage of growth. It’s interesting to see that physical world interactions (print, retail proximity, and IOT), data governance and privacy, video marketing, conversational marketing and chat, and project and workflow management led the pack. These all have been major themes in marketing and martech over this past year.

Forget shiny object syndrome. Martech chases marketers more than the other way around.

For the record, here’s the complete progression of the overall landscape since 2011:

Martech Landscape 2011-2020

Or, for those of you who prefer a more analytical rendering:

Martech Landscape Growth 2011-2020

Just a take a moment to reflect on that: 5,233% growth of this landscape since 2011.

Now, this year’s data was collected before the coronavirus pandemic exploded globally in March 2020. The elephant-in-the-room question, of course, is what impact will this crisis have on the martech industry? What will the martech landscape look like in 2021?

Good questions, which I’ll address a little further down in this post.

First, here are official links to the graphic at different resolutions:

Marketing Technology Landscape Supergraphic (2020) — 6.7MB slide (retina)

Marketing Technology Landscape Supergraphic (2020) — 57.8MB hi-res JPEG

Marketing Technology Landscape Supergraphic (2020) — 162.5MB hi-res PDF

Feel free to use and distribute the 3200×1800 slide version of the image in any presentation or article you like, as long as you share it “as is” with attribution. And if you want to print the high-resolution version as a poster for your own personal wall display, go for it.

For any other uses of the high-res graphic, please contact me for permission first. For almost all legitimate cases, I’m happy to grant it. You can also still get the original 2011201220142015201620172018, and 2019 editions of the landscape.

For any other uses of the high-res graphic, please contact me for permission first. For almost all legitimate cases, I’m happy to grant it. You can also still get the original 2011201220142015201620172018, and 2019 editions of the landscape.

Now, let’s talk a bit about the design and data before digging into further analysis.

The Martech 5000: 2020 Edition — A New, Organic Design

This year’s martech landscape graphic looks, um, different. Kind of trippy. You might wonder if it has anything to do with us being located in a state that has legalized marijuana. Or perhaps being sheltered-in-place a bit too long. Or both. Plausible explanations, but, no.

The new design actually has a practical origin story. The layout process of trying to tightly pack dozens to hundreds of logos, approximately to the same scale, in a square box of a category is hard. (Literally: it’s a variation of the bin packing problem in computer science that is NP hard.) Just when you get it perfectly packed, if you add or remove a single logo, the ripple effects can force you to rearrange all of them. Trying to grow or shrink a category box triggers the same thing — but across all the other adjacent category boxes too.

You can get a prescription for medical marijuana for the stress that causes.

So the team at Blue Green, who produced this year’s landscape again, came up with a clever solution. Instead of fitting the logos to the box, fit the “box” to the logos. Pack the logos in a cluster, keeping their relative scale and proximity close to constant, and then just draw the border around whatever natural shape that cluster happens to take.

It’s still challenging to then pack the natural category clusters together and maintain a roughly 16:9 aspect ratio for the entire graphic. But having some slack within the packing algorithm cut the overall layout time by more than half. (There’s a general lesson here about building in slack for adaptability over perfect optimization in an ever-changing environment.)

But aside from its pragmatic production value, this approach resonated with me for several reasons:

  1. This year’s martech landscape looks different, right at a glance. A fresh design reminds us this is still a vibrant and evolving space. So much has changed over the past five years in martech. The landscape graphic should reflect that.
  2. The organic nature of this design better reflects the nature of martech. It’s a more fluid and amorphous space than stacks of nice, neat boxes would imply. Instead, this conveys the fractal characteristics of the industry, while still providing some basic organizational structure.
  3. It’s more a work of art than a left-brain data visualization. I don’t mean that pretentiously. More humbly, the bigger this graphic has become, the less utility it’s provided. It’s nearly impossible to “use” it for anything other than communicating the eye-popping scale and diversity of martech — or taking an exploratory random walk through categories. This new design helps dispel the myth of utility. But hopefully like art, it evokes thought and emotion. (Maybe not always positive emotions.)

Now, if we really wanted to provide utility, then we should just publish a database with all of these martech solutions in a format that could easily be searched and filtered.

So we did that too.

Introducing martech5000.com Crowdsourced Martech Database

Martech 5000 Database

We’ve launched martech5000.com, a site where you can access all the data of the current martech landscape. Actually, even more current than the graphic, as we’ll update the database continuously, whereas the graphic is more of a once-a-year snapshot.

When I say “we’ll update,” I’m not using the editorial “we.” You, as a member of the martech community, can contribute your udpates too: new solutions that we missed and existing solutions that have changed, been acquired, or gone away. We’ll moderate those suggestions, so as to avoid the data set turning to mush.

So if we missed your martech company, please add it to the database at martech5000.com.

To access this database and make contributions, you simply need to create an account on martech5000.com with your name and email address — and give us permission to email you as a subscriber to chiefmartec.com. We won’t share your info with anyone else, and we won’t spam you with other people’s ads.

The martech5000.com site was built by Blue Green using Bubble.io and Airtable — let’s hear it for the power of no-code platforms. Indeed, every marketer is now an app developer.

Speaking of data, let me give credit where it’s due here.

Blue Green did almost all of our primary data research this year. Their Herculean effort and passion for martech made this possible. But we also received extraordinary contributions from MarTech AllianceMartechbase, and MarTech Tribe, who each shared significant data updates with us from their own research. In fact, many of the newly discovered companies were from the European martech landscape that Martech Tribe produced earlier this year.

Other sources we relied on for research martech companies include CabinetMCapterraG2LUMA Partners, and TrustRadius. Anand Thaker helped shape our data collection methodology when co-producing the 2017 and 2018 landscapes. And Terence Kawaja of LUMA Partners first inspired us with his original adtech LUMAscape.

I named the site martech5000.com because I am willing to bet — at least bet a domain — that the number of martech solutions in the world will not drop below 5,000 for the rest of this decade.

Which is a good segue…

The Shape of the Martech Industry in 2020 and Beyond

Ever year I’ve published the martech landscape, since 2011 on, people have been pointing at it and confidently predicting it would consolidate. Usually within the next year.

Yet every year the landscape has grown. It’s now 50X the size it started at.

But those two statements aren’t as mutually exclusive as they might seem. The number of martech solutions has grown. It’s just empirical fact. Yet the industry has also consolidated. Here’s how that happens without a time-space paradox:

Martech Industry Long Tail

The martech industry is a long tail. There are a consolidated number of platforms that dominate global market share. Maybe a dozen or two. Rattle off the top names that come to mind, and you’ll have the gist of the “head” of the tail. (An interesting debate is whether consumer platforms like Facebook qualify. Or cloud infrastructure platforms like AWS.)

Then there are a few hundred category leaders. Their solutions are more focused and dive deeper on a particular capability — say, social media management — but they still have tens of millions or even hundreds of millions of dollars in revenue. (Keep in mind, martech is a $121 billion industry overall.)

And then… you have a long tail of thousands of specialists and startups. Many aspire to be the next major platform. Or at least the next category leader. And some will achieve that.

But plenty of others aren’t betting on a moonshot. They’re simply running good businesses.

Here is the thing that confounds those who only consider a martech company to be “real” if they’ve raised a ton of venture capital on a unicorn trajectory: company valuation is not the same as customer value. Many small martech firms solve specific pain points or open up new — if sometimes narrow — growth opportunities. And their customers love them for it.

They may have a small number of customers. Or the slice of capability they provide might be thin enough that their ACV is only a few hundred or a few thousand dollars.

But thanks to cloud economics — i.e., it’s insanely cheap and easy to dynamically scale SaaS on Amazon, Google, or Microsoft cloud infrastructure — and product-led or services-led growth, many of these small martech companies are… wait for it… profitable.

That also makes them sustainable. They’re not beholden to investors for the next round of funding to survive. Indeed, many of them are bootstrapped from the get-go.

They might be as small as a “micro ISV” — a couple of entrepreneurial developers who turn a passion project into a solid business. Don’t dismiss that. I’ve seen quite a few million-dollar products built that way. Splitting that revenue two ways, while having fun, running their own show, and enjoying genuine connections with happy customers can be very fulfilling work.

Others scale up to dozens or hundreds of employees. Or blossom within a larger services business that has found a way to “bottle their special sauce.”

Martech: Ecosystems, Experts, and (Citizen) Engineers

Almost none of these will ever raise top-tier funding on Sand Hill Road. But collectively they are an essential part of the martech industry. They fill the myriad of gaps that the major platforms can’t — because it’s not economically feasible for a multi-billion dollar company to chase niche opportunities worth only millions or even tens of millions of dollars. Yet customers still crave such solutions crafted to their diverse and varied needs.

A wonderfully symbiotic relationship is emerging here. The major public martech companies have come to realize that this legion of long tail builders and entrepreneurs can be their allies. The stability of a major platform as the backbone of a marketing stack augmented with a set of specialized apps designed to plug deeply into that platform is a powerful combination.

A “point solution” — which used to be a negative label — isn’t a point solution any more when it seamlessly integrates into your primary platform. It becomes part of the fabric of your stack. Literally: it’s a feature, not a bug.

These platform ecosystems are the foundation of The Second Golden Age of Martech.

Instead of suite vs. best-of-breed, marketers get the best of both. Many of these ecosystem solutions also blend software and services to help marketers achieve outcomes as much as technical capabilities.

Second Golden Age of Martech

At the same time, these characteristics give long tail martech businesses a certain degree of robustness. By integrating deeply with a major platform, they overcome buyer objections to unintegrated software. They tap network effects with other integrated apps that can benefit from each other’s data and services. And they can focus their marketing and sales energies toward a well-defined target audience — customers of that platform — often through online marketplaces run expressly for that purpose.

(Yes, given my role at HubSpot, I’m biased on the advantages an ecosystem can provide. But these dynamics aren’t unique to HubSpot. You can see ecosystems thriving around almost all of the major marketing platforms out there.)

But What Will Happen With Martech in 2020 Now?

Other things being equal, I believe the martech industry will remain rich and diverse for the decade ahead. Heck, I’m betting on it with my martech5000.com domain. Even with plenty of consolidation, the volume of net new software creation — although likely more ecosystem-oriented software — will continue to be robust.

There is an ever-renewing spring of opportunities to make marketing better and few barriers to building an app in the cloud to address them.

But other things aren’t equal. Certainly not this year.

Will the coronavirus crisis ravage the martech landscape? Maybe. But I think we’re looking at more of a short-term hit than a long-term death. The next year will likely be rough for a lot of martech vendors, if for no other reason than it’s going to be a tough time for their customers. Economic wake. More will exit the field than would have otherwise — and that’s on top of the “dot com” moment many felt we were already facing. That increases both real and perceived vendor risk for VC-funded ventures, which is a bit of a vicious cycle.

On top of that, marketing operations teams — in many firms, the gate-keepers to the martech stack — have their hands full with crisis-related issues for the immediate future.

However, while there are serious headwinds for martech in this crisis, there are tailwinds too:

https://cdn.chiefmartec.com/wp-content/uploads/2020/04/martech-headwinds-tailwinds.jpg

The world is going to continue to become more digital. If anything, this crisis will accelerate the motivation for firms to embrace digital operations and digital customer experience. And that’s where martech thrives.

Most martech solutions tend to have a “performance marketing” bent to them. Those that can deliver results will be especially valued in a time when marketers have to justify every cent.

And, yes, back to ecosystem dynamics again: eliminating both the headaches of integration and the overhead of too many solutions overlapping with their own implementations of what should by now be common, underlying platform functionality will bring greater cost efficiency to martech builders and buyers.

As the headwinds eventually subside — and they will — I believe those tailwinds will carry the martech industry far forward through the decade ahead.

Of course, this is just my opinion. However, I will share this chart from LUMA Partner’s Q1 2020 Market Report, showing how public markets behaved as the COVID-19 crisis erupted:

Martech in the Public Markets Q1 2020

LUMA’s tracked bundle of martech stocks suffered along with pretty much the entire market. But not to the same degree. In particular, at the end of March, when the S&P was down 25% from the start of the year, martech was only down 8%.

Necessary disclaimer: this is not investment advice.

But it is evidence that I’m not the only one who’s bullish on the future of martech.

It won’t be a cakewalk getting to that future. Recovering from this crisis will be a challenge. But I have faith the marketing and martech communities.

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What is the strategy taken by the distribution app Lyft to automate marketing?

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Lyft’s Marketing Automation Platform …(built by Lyft)

Thanks to Scott Brinker for this post!

What is Marketing Automation & How Does It Help Marketers?

 Indrajeet Deshpande Community Contributor , MarTech Advisor

Marketing Automation is a software platform that lets you reach out to your target audience across multiple marketing avenues such as websites, email, and social media by automating and streamlining marketing activities and workflows to bring in more leads and revenue.

Whether you are a marketer working at a startup or a corporate giant, you’ll agree that generating and nurturing leads is not easy. The buyer journey is no longer a straightforward phenomenon. Its complexity increases as new marketing channels are introduced. In fact, Salesforce has identified that it takes approximately six to eight touches to generate a sales-ready lead.

Marketers have to juggle between multiple tools and software suites to communicate with their audience, identify and generate leads, nurture them, and pass the sales-ready leads to the sales team. This switch-tasking is not productive. Also, if you keep adding new tools to your MarTech stack, it will eventually lead to the dreaded frankenstack phenomenon and leave you overwhelmed.

To be efficient, you need an application that allows you to engage with your audience across different channels through a single suite of applications.

Enter Marketing Automation!

What Is Marketing Automation?

Marketing automation is software and technologies that help marketers reach audiences across channels and automate tasks such as organizing, streamlining and measuring analytics.

Different companies define marketing automation differently depending on their set of offerings, but Marketo perfectly sums up the essence of marketing automation in their definition:

Marketing automation is a category of technology that allows companies to streamline, automate, and measure marketing tasks and workflows, so they can increase operational efficiency and grow revenue faster.

Marketing automation helps marketers segment their audience, generate and nurture leads, identify the most valuable leads (lead scoring), and retain existing clients by identifying upselling and cross-selling opportunities. 

How Does Marketing Automation Work?

Your customers interact with you across multiple avenues including website, social media, mobile apps, and emails. This gives you plenty of data points that can be used to identify the needs and habits of potential customers. 

By integrating with other tools from your MarTech stack, such as your Customer Relationship Management (CRM) or customer service platform, marketing automation provides a cohesive view of your audience and enables you to create more refined segments, craft highly targeted messaging, and guide your leads through the marketing funnel. It doesn’t matter how many leads you have, marketing automation is capable of processing all this information at scale.

comp_how_to_integrate_marketing_automation_into_your_existing_environment_5cefbcb04bc65

5 Benefits of Marketing Automation

Integrating a marketing automation solution with your MarTech stack can result in the following benefits to your organization:

comp_5_benefits_of_marketing_automation_5cefbe13894c6

What do marketing orgs look like in the martech age? Let’s find out

marketing_org_martech_world

 

First, this is a copy of a blog post from Scott Brinker, who continues to provide invaluable strategic insights as a thought leader in the world of marketing technology. Thank you Scott!

————————————————————————————————————————————-

I know, you get asked to participate in a ton of surveys. You’re super busy, and most of the time, the results of these studies are of dubious value to your actual work. So it’s easy to pass on taking them.

But if you like the content of my blog, and have ever found it helpful, I’d personally ask you to participate in this survey: Marketing Organizations in the Age of Martech.

I also believe that the results of this one may be quite valuable to you.

The thesis of this study is that marketing technology is reshaping the organization of the marketing department. Directly, marketing technology and marketing operations have become prominent roles, with expanding teams of their own.

But indirectly, martech also changes the way the rest of marketing is able to function. Marketing can — if it develops the necessary organizational capital — orchestrate across channels, adapt to feedback in rapid fashion, leverage data from a myriad of sources, run experiments, trial new innovations, and more.

In this new environment, is marketing best served by organizing around activities, channels, products, customer segments, or stages of the buyer’s journey? Or some other structure? What capabilities does it centralize?

Having talked to many CMOs over the past few months, I’ve come to believe that there are some powerful new options for organizing modern marketing teams. I’d love for us as a community to get greater visibility into what those possibilities look like across a variety of real-world marketing departments.

This survey, Marketing Organizations in the Age of Martech, asks you for three pieces of your organizational structure (titles or roles only, no names):

  1. What roles report to your CMO (or highest-level marketing executive)?
  2. Who is in charge of marketing technology management and what roles report to them?
  3. Who is in charge of marketing operations — if that’s a separate role from marketing technology — and what roles report to them?

You don’t have to identify yourself or your company to participate. And all data will be aggregated and anonymized before it is published. But we will share the results at the end with everyone in the community — no paywall or high-priced report at the end. We’ll do some nice visualizations to reveal the different org patterns that we discover.

As an extra little “thank you,” we will also provide everyone who completes the survey with a discount code for the upcoming MarTech conference in Boston, October 2-4.

Please. Take 10 minutes to contribute to this survey now. Thank you!!

martech_org_study

P.S. The marketing org chart shown at the top of this post is an amalgamation of several of the common structures that I’ve seen recently. But this Marketing Organizations in the Age of Martech study will give us a lot more real-world data on the different structures being used.

Please participate — thank you!