In August of 2011, there were approximately 100 companies that provided marketing technology (MarTech) solutions. By January of 2016, there was an estimated 3,800 . The following plot illustrates the growth of the MarTech industry over the past five years :
Following this trajectory, it’s estimated that by 2017 there will be nearly 7,000 MarTech companies. Note, these statistics refer to MarTech companies servicing all industries, however we can scale these down to just include companies relevant to financial services. According to the Organization for Economic Co-operation and Development (OECD), financial services account for 12-19% of the total global economy . Thus, even a conservative estimate of 12% suggests that there are nearly 500 MarTech companies in the financial industry alone in 2016, up from ~12 companies in 2011. Why is this exponential growth occurring?
Here are a few possible explanations:
- General industrial growth: As more financial institutions emerge, there is an increased need for marketing solutions to differentiate one company from another. From this need, stems an increase in companies that provide such services.
- Increased marketing budget: More banks are realizing the importance of effective digital marketing in boosting revenue. As a result, management has been gradually increasing the marketing budget , thus increasing demand for marketing solutions. New marketing companies arose to address the demand.
- Growth of technology: 20 years ago, marketing occurred mainly through radio, phonebook, or newspaper ads. However, in the current technological age, there are more ways than ever to reach out to potential customers, which allowed for the development of companies that provide different marketing solutions.
With 3,800 companies in the MarTech industry and more on the way, this is a market ripe for consolidation. Yet, despite ongoing consolidation efforts by larger companies like Oracle, Adobe, and Salesforce, the market size is still growing .
Regardless of the underlying reasons behind this Cambrian Explosion of companies in the MarTech industry, as a bank marketer, how do you pick which MarTech solutions to use?
First, you have to realize that you won’t be using a single solution; you’ll be using multiple solutions so, if you’ve been waiting around for the perfect single solution to emerge - forget it; it’s not going to happen (see the curve above).
Secondly, you need to select solutions that will appeal to all generations The world is moving towards authenticity and self-discovery so, pick solutions that enable you to personalize your customers’ experiences and let customers have their say; in other words, start stories but, let your customers finish them, their way.
Lastly, make sure that the platform is leveraging machine learning to improve. It’s great to collect a lot first and zero party customer data but, if your technology stack isn’t learning from it -- you’ll fall behind the competition quickly.
If you’d like to learn more about Micronotes marketing automation solutions, please contact us -- we’ll be happy to help you.