The marketing technology landscape is incredibly vibrant these days. And by "vibrant," I mean something like the Wild West: thousands of pioneers valiantly chasing the future into new and uncharted territory.
There are literally thousands of startup ventures pursuing new ideas in marketing software. Multi-billion dollar giants such as Adobe, IBM, and Oracle are hungrily gobbling up acquisitions behind them, striving to mash disparate products together under a common banner. Agencies, marketing service providers, and business consultants are frenetically weaving these components into "solutions" and a new generation of creative campaigns.
And somewhere in the middle of that maelstrom, you have the CMO exclaiming, "Holy cats ... what do I do with all this?"
Consolidation vs. Diversification
This naturally leads to calls for consolidation. Adobe, IBM, Oracle, and the like seem bent on achieving that by acquiring all the different pieces into a single consolidated offering to the CMO. This could be called the "ERP vision" of marketing consolidation -- following a path such as enterprise resource planning software did in the 1990s. In the end, there will only be a handful of colossal marketing software suites, each with the Tolkien-esque motto, "One suite to rule them all."
Yet I'm skeptical of that outcome. For every major acquisition we read about in the press, we hear of two or three times as many new ventures in this space on the pages of TechCrunch, VentureBeat, PandoDaily, etc. While not every startup succeeds, the rate of new entrants appearing seems greater than the rate by which they are acquired or disappear.
This is more like diversification than consolidation. So what's driving this counter-consolidation trend?
Part of this is a function of timing. We're still in the early stages of the transformation of marketing from the previous era of disconnected, insulated marketing communications to this new age of interconnected, integrated customer experiences. Budgets are shifting from traditional to digital, but the amount of "old school marketing" money still on the table is staggering. So there's a lot of incentive for entrepreneurial initiatives.
Eventually, however, new marketing budgets will achieve equilibrium. Will that finally dampen this diversification? Maybe. But consider three other forces that are likely to inspire open marketing technology innovation for quite some time:
1) Digital Is Still Evolving
The environment in which new marketing is operating -- the digital fabric of consumer life and business operations -- is going to be in flux for the foreseeable future. Facebook and Google alone are constantly changing, introducing new features and services, and sundowning old ones. Mobile devices are advancing into the realm of science fiction. Possibilities abound for the next-generation of TV; digitally-savvy cars, homes, and appliances; wearable computing; the next-new invention in social media; and more. Each new wave of innovation alters the playing field for marketing -- and opens up the opportunity for new marketing software to capitalize on it.
2) Brands Are Always Seeking Differentiation
Different kinds of software -- different approaches in how they were designed and implemented -- give marketers very different ways of envisioning and creating experiences for their customers. This is crucial to the future of brands! Companies don't want to be homogenized. They want to distinguish themselves and stand out from their competitors. New and innovative tools give marketers new and innovative ways to achieve this.
3) Software Is Easier Than Ever to Create
Thanks to a cornucopia of open source projects and frameworks, combined with an abundance of cheap and robust infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) offerings, it has never been faster, easier, or cheaper to build amazing software. A couple of people with a brilliant idea can quickly code up a way to make it real -- and if it catches on, they can scale it on demand.
Can We Have the Best of Both Worlds?
These three forces feed into each other in a virtuous cycle. Not every piece of software born in this star foundry needs to grow up to be a billion-dollar public company to achieve success and make marketing better. In fact, it's the narrow focus and specialization of many of these ideas that make them so compelling and effective.
But still, a complete free-for-all -- arguably the state of marketing technology today -- seems unnecessarily laborious. If every piece of software must be independently integrated with every other software product swirling in marketing's ecosystem, a lot of time and money is going to be spent on plumbing rather than delivering wonderful customer experiences.
Can we have the best of both worlds -- consolidation and diversification?
Indeed, that may be the answer. Consider an alternative "iOS vision" of marketing consolidation, where a small number of platforms emerge as the "backbones" of marketing operations. The analogy is inspired by Apple's iOS and Google's Android platforms -- two contenders that have unquestionably consolidated mobile operating systems, while simultaneously fueling an explosion of diversified apps built on their foundations. Apple just recently announced the availability of over 700,000 such apps. It doesn't get more diversified than that.
Of course, most marketing technologies are far more complex than consumer smartphone apps. Don't take this metaphor literally. But conceptually, the same architecture could exist. Imagine a handful of marketing platforms that standardize certain events, workflows, and data structures at the core of marketing operations. By exposing a rich and expressive API, other marketing software products could easily interface to that backbone, using it to seamlessly feed in and out of a company's overall marketing technology ecosystem.
Companies could have the benefits of a consolidated infrastructure, sparing themselves expensive custom integration work at every turn, while simultaneously leveraging a plethora of specialized marketing applications that combine to give them a unique set of superpowers tailored to their distinct brand vision of the ultimate customer experience.
Sound far-fetched? Well, take a look at Salesforce.com's AppExchange. Or the business software synchronization service Zapier. Or, more relevant to readers of this blog, HubSpot's App Marketplace. The parallels to Apple's app store don't seem so far off in comparison.
It was actually HubSpot's CEO, Brian Halligan who used the phrase "marketing operating system" in an interview with AdExchanger earlier this year, describing the vision of where HubSpot's platform could go. "The companies who tend to win those games long term are the ones who pull in a lot of users and a lot of customers, and they use those customers and users to attract developers. They build this big ecosystem around their product, very similar to [Android and iPhone]."
Will marketing technology consolidate into "ERP vision" suites or "iOS vision" platforms? Both? Neither? Something else entirely? Let us know what you think in the comments. As Niels Bohr said, "Prediction is very difficult, especially about the future." But one thing is for certain: the future of marketing software is going to be incredibly exciting.
This is a guest post written by Scott Brinker, the co-founder and CTO of ion interactive, a provider of advanced landing page and microsite marketing software. He also authors the Chief Marketing Technologist blog. Follow him on Twitter @chiefmartec.