What you need to know about martech consolidation, atomization of specialist tools and the untapped potential of generative AI in martech stacks.
The martech landscape continues to expand relentlessly, year after year. In 2024, this translates to a compound annual growth rate (CAGR) of 41.8%, marking an astounding 9,295% increase over a span of 13 years.
That number is daunting, and so is the growth.
With that sheer growth rate, it is fair to ask yourself and your team: “Do we control our martech, or does our martech control us?”
If you understand three pivotal trends, you’ll master your martech and make informed decisions:
- Martech growth outpaces martech consolidation. Stop waiting for consolidation. Grow your martech maturity instead.
- Martech atomization: The long tail is here to stay. Determine your center platforms and connect with specialist apps.
- Generative AI leads the martech growth. Experiment with a genAI backlog; there is plenty of low-hanging fruit.
1. Martech growth outpaces martech consolidation
The ongoing growth of martech landed this year at 14,106 tools. Every year, we publish the Marketing Technology Supergraphic and we hear one question:
“Will the Martech market consolidate any time soon? This growth clearly can’t go on forever. It is simply not sustainable.”
— You, the Martech community, every year
Let’s be clear: consolidation does happen. But in reality, it’s happening at a (much) slower pace and smaller scale than the increase of new tools. This year, we only removed 263 products from the landscape. That’s only a 2.1% churn rate from last year’s cohort. In the same year, we added 3,068 new tools. You do the math.
Hence, our advice: consolidation is not a strategy. Stop waiting for vendor consolidation and hoping it will simplify the management of your stack. Grow your martech maturity instead. It is easier than you think.
Through our yearly “validation exercise” for the Martech Supergraphic, in which we collaborated with hundreds of martech experts worldwide, we learned a simple trick to boost your martech maturity.
Simply visit a dozen vendors for 5 minutes (no more). You can handpick them or filter some large and small vendors in one category on MartechMap.com. After that, summarize in three bullet points what you learned (or not!). In one hour, you’ll understand that some martech categories are highly commoditized, whereas other martech is still in the process of finding its sweet spot.
The validation exercise is one of the best martech crash courses out there. The experts who support our validation efforts tell us the same thing every year: It is a true confidence and expertise booster in the shortest time possible. Tip: You can involve your team or other departments, or do it yourself. Call it a stackathon, if you like.
2. Martech atomization: The long tail is here to stay
Martech atomization refers to the role many small specialist tools play in stacks. Like other markets, our research shows that martech has a long tail, too. We used our dataset of 1,500+ real-life martech stacks. A stack is a set of martech tools that a company is using. We counted the number of times each solution was mentioned.
In the past seven years, the contribution of small long-tail tools hovered around 50%. That consistent number suggests that small tools play a role in company stacks that cannot be ignored or dismissed. Even though large vendors buy smaller ones, the tail is consistently long.
Formerly referred to as isolated “point solutions,” today, specialist apps perform one task intuitively and seamlessly integrate with their ecosystem partners. The numbers show it is viable for the long-tail vendors to work as atoms in a larger ecosystem.
But that is half of the story. What about the other half, the head and torso platforms? Our recent survey shows that stack owners consider one or two tools as the “center of their stack.”
The common stack architecture involves one or more center platforms combined with specialist apps. It is not a zero-sum game.
Based on that, we recommend “legalizing the long tail” and no longer dismissing it as non-desired shadow IT and point solutions. Determine with your team which platforms are the center of your stack and connect them with specialist apps.
3. Generative AI leads the martech growth
An astounding 77% of the 3,068 new tools in 2024 are genAI-based. Slightly more than half, 53%, are content-related tools, covering copy, image and video use cases. However, our research reveals many more interesting genAI use cases beyond content.
The graph below shows interesting genAI-based solutions built for sales automation, enablement and intelligence, business/customer intelligence, data science and live chat and chatbots.
Marketers have not explored and exploited the full potential of generative AI yet, according to recent research. That is no surprise if we recognize that genAI is finding itself at the beginning of the hype cycle. At this early stage, the high expectations do not correlate with the high number of successful use cases.
When we compare the genAI use case survey with the genAI-based martech solutions, some areas are overlooked by marketing. A possible competitive advantage for your company?
In our data, we detected that genAI-based martech tools offer sales use cases, such as sales support, i.e., client meetings, notes, supporting material (n=137), lead sourcing and outreach (n=65), lead scoring (n=27) and pitch decks (n=18).
And what about business/customer intelligence and data science? There are interesting genAI-based tools that offer data infrastructure, storage and unification (n=65), data interpretation and chat with data (n=37) or data sourcing and extraction (n=11).
Given the early stage of understanding genAI in marketing, our advice would be to keep a genAI backlog in your company. You can use the same structure as the survey. Try out and track genAI use cases and rate what can be used daily or monthly, what doesn’t work and what still needs to be tried.
The post 14,106 martech tools reveal 3 trends you should master appeared first on MarTech.
About the author
Background in marketing and software development. Supporting brands to optimize their Customer Technology Stack. Publishing about Martech Stack effectiveness. Researching a proprietary Martech Datawarehouse, consisting of three databases: 1,500+ real-life company stacks, 13,000+ Martech solutions, and 4,600+ Martech requirements/features.”
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