What is marketing technology?
Marketing technology is a combination of vendors, marketing automation and technology solutions in various digital marketing channels. It was conceived by Scott Brinker, Co-founder & CTO of ion interactive.
Marketing practitioners spend a fair amount of their time at the junction of the marketing functions and the technology that fuels it.
The remarkable progress in technologies, enable marketers to simultaneously become more automated as well as more efficient. Over 7,000 technology companies are empowering the marketing organization through advancements in fields like programmatic(real-time ad buying), artificial intelligence and machine learning. As firms realize the value of these capabilities, we continue in a technological resurrection, with marketers advancing to hold more power within their organizations.
The following are some ideas about the transformations we will see in the marketing technology ecosystem this year.
Concentrating on Customer retention
According to a survey conducted by Invesp Consulting, marketing organizations today spend far more on customer acquisition than retention. However, the cost of acquiring a new customer is five times greater than that of retaining an existing one. Also, the probability of selling to an existing customer is 60 percent, while the probability of selling to a new prospect is 5 percent.
The importance of retention will get clearer to firms as they increasingly adopt data-based customer-centric strategies as a guiding principle and in parallel adopt advanced customer lifetime value (CLV) models to drive their customer-centric strategy. As I spend more time within the ecosystem, I continue to see a renewed focus on the retention effort.
Offline and online will work
In a report published by Statista, retail e-commerce sales in 2018 are expected to surpass $2.8 trillion dollars globally, and online transactions are growing at three times the rate of offline transactions. However, almost 50 percent of Americans still prefer to shop in-person, and 64 percent of the country’s total shopping budget is spent in-store.
As competition drives improvements in merging these platforms, the disconnect between companies’ offline and online services will reduce. The interactions across these channels will become a more fluid process. Traditional department stores who’ve been too slow to invest in online marketing platforms consequently faced waves of closures and shrinking consumer demand. On the other hand, businesses that have successfully merged these platforms captured and retained a significant portion of consumers. As this understanding matures, companies will bring omnichannel capabilities to a level that consumers will truly start seeing the difference.
The walled gardens
For the past decade, tech giants like Google and Facebook have been amassing huge amounts of user data. This includes users’ personal information. In particular, Facebook and Google’s data stores account for more than 90 percent of annual growth in the industry. By restricting access to data, massive tech companies have created walled gardens. Hence virtually all user engagement and digital ads can be controlled by the respective data collector.
Ironically, with the passage of GDPR in Europe and the California Consumer Privacy Act in California, companies now have another excuse to not share data with outside parties. For instance, Google has used GDPR as a justification to refuse using user IDs outside its own Ads Data Hub (ADH). This essentially implies that advertisers must port their other outside data into ADH, which Google will then have access to. The new year will be the year of unintended consequences benefitting these walled gardens.
The rise of the machines
As AI continues to revolutionize the digital landscape, marketers will increasingly depend on this technology. They want to maximize consumer reach and sales. According to CB Insights’ top AI list, more than five companies are emerging as top marketing and sales startups. They are Invoca, InsideSales, Conversica, Gong.io, Afiniti and Amplero.
Additionally, CRM and marketing players like Salesforce and HubSpot are acquiring and investing in AI companies. AI within marketing technology means more effective customer segmentation, advanced and updated customer analytics and efficient marketing strategies. This will create a domino effect where businesses will want to compete in order to capture consumer demand. This leads to a further rise of AI in marketing. The rise of customer data platforms (CDPs) that seamlessly collect and make accessible 360-degree customer data to the regular marketing analyst. This while completely bypassing the IT department will further lead to the use of AI, as it feeds on data.
Traditional marketing is shifting toward reliance on data analytics, virtual platforms and machine learning through 2019. Companies will continue to integrate IT functions into their marketing departments. Their focus especially on customer retention and improving the merging of their online and offline platforms. Observing these trends, we’ve come to a simple conclusion. As the technology landscape continues to evolve rapidly, these developments continue to reshape the way marketing conducts itself. It will be an exciting and interesting year in the marketing technology ecosystem.