The Global market for marketing technology is estimated to be worth $344.8bn in 2021, a figure which underlines the huge role that martech now plays in almost every organisation.
This market size figure is taken from The Martech Report 2021/22, produced by MarTech Alliance in partnership with Moore Kingston Smith.
The report contains a survey of senior marketers and agencies, looking at martech budgets, the benefits and challenges around tech, and some of the key tech that organisations have been investing in over the past 12 months. It also contains insight from industry experts including Scott Brinker.
The growth of martech
Our market sizing data estimates the martech market in the UK and North America to be worth $149.7bn in 2021, and by extension this makes the global market size around $344.8bn.
The martech industry has been growing steadily along with the internet, and is exemplified by Scott Brinker’s famous Martech Landscape graphic. The latest version, published in 2020, numbered more than 8,000 vendors.
That represents a growth in the number of vendors of 5,233% since 2011. Even with M&A activity in the sector, and some consolidation, the number of vendors continues to grow.
As Scott Brinker told us, the next version will be even bigger:
“We continue to see rapid growth within the marketing technology industry. I haven’t published a 2021 landscape yet, but we’ve been researching it. I’m quite confident in saying it will contain more than 10,000 vendors if we published it today.”
What's driving martech market growth?
Keeping pace with customer behaviour
The growth of digital and the changing behaviours and expectations of consumers now make marketing technology vital to the modern marketer.
Providing the best possible customer experience requires the intelligent handling and use of customer data, and the ability to provide content whatever the channel or device, and to do so at scale makes martech indispensable.
Staying on top of tech
The continuous evolution of technology, and the potential for new tech to increase the effectiveness or efficiency of marketing means there’s a kind of arms race around martech.
Marketers often need to upgrade legacy systems and add new tech to remain competitive, or adopt new tech to gain a march on competitors. For this reason, we can see marketers investing in a wide range of emerging tech in the last 12 months, with more planned for the year ahead.
Data privacy laws and expectations
Customers are more aware, and more concerned, than before around how their data is used by marketers. In response, governments have been introducing legislation, such as GDPR and CCPA, which provides consumers with greater control over their data.
There’s a bit of a conundrum for brands around data, as while people want brands to use data to understand them and improve experiences, they don’t always trust them with their personal data.
Managing customer data at scale, and ensuring compliance with legislation, as well as using data to improve marketing and customer experience means martech solutions such as Customer Data Platforms have been a key area of investment for marketers.
Investment and M&A activity
The past 12 months have seen growing M&A activity in the martech industry. Deals such as Salesforce’s $27.7bn acquisition of Slack and Intuit’s $12bn purchase of Mailchimp are just two examples of this.
We’ve also seen investment into key vendors, such as Sitecore, a digital experience platform, receiving record funding of $1.2bn earlier this year.
Even with this consolidation, the number of vendors continues to grow, and there’s no sign of it slowing anytime soon.
The rapid growth of the internet and digital technology, and the new business models this has created, means that firms have been forced to adapt or survive - think Netflix vs Blockbuster, and so on.
While digital transformation is also about business models and ways of working, marketing technology plays a huge role in allowing organisations to be present on the channels customers use, to manage customer data and to provide the experiences that customers are looking for.
The huge shift online driven by the Covid-19 pandemic has accelerated this existing movement towards digital transformation and further increased adoption of martech.
Martech delivers results
While there may be some challenges in areas such as tech integration, the marketing technology industry is growing because martech works.
61% of marketers in our survey agree that martech is at the heart of marketing strategy, and central to meeting customer expectations, while most markets are planning to increase budgets in the coming year.
As the market size shows, martech is now a huge industry, and this growth is set to continue over the next 12 months and beyond,
The Martech Report 2021/22 contains valuable data and insights into the growth of martech, and the challenges around the industry with key lessons for brands, agencies and vendors.