With more than 950 digital marketing vendors now offering software and services in about 40 categories, it's getting harder for marketing executives to blend the right mix for their companies.
More and more, they rely on experts like James McCormick, senior analyst for consumer intelligence (CI) at Forrester Research, for guidance. Speaking yesterday at the Ensighten Agility 2014 conference in San Francisco, he outlined the challenges and strategies for marketers making those choices.
McCormick provided a five-tier blueprint or map he developed to help companies assess their capabilities, existing use of vendors and the gaps they need to fill. Overlaying that with those 950 vendors, he said, can help marketers choose which vendors to add, which products to keep and which to cut loose.
It's a good approach in a market that seems to grow daily. Just yesterday, Ensighten CEO Josh Manion told the 400 attendees at the conference that his company — which last week secured $40 million in series B financing — is adding four new products: Activate, which helps customers scale their efforts; Pulse, to ID and track customers across channels; Ensighten One, to help collect and "activate" data; and Manage, which monitors and responds to tag-management issues.
CMSWire caught up with McCormick after his appearance and asked the British researcher to summarize his thoughts on key topics facing digital marketers.
CMSWire: What's your research specialty at Forrester?
McCormick: I focus my research on the customer insights professional, which is the professional in a large organization who manage customer data and utilize value-add. So it could be the CRM professional, a data scientist, the digital marketer. I specifically focus on the digital marketing aspects, how we can use customer data to inform customer interactions, to improve customer experience, and to make better decisions.
CMSWire: In speaking with companies, what is the greatest challenge to them right now?
McCormick: The greatest challenges are the evolving customers and the way they are empowered to engage with us. It's all about the way digital is giving them power they didn't have before. So, A, we need to evolve our organizations around that customer, around their thinking. And, B, there are things like the multiple masses of data that we have that we can plug together to understand our customers.
CMSWire: There are some 950-plus vendors in this field. It's awfully confusing to marketers. How can your clients cut through that clutter?
McCormick: I talk about an online market blueprint that involves the capabilities we need to deliver a full online marketing suite. You kind of need a map to show the landscape of 950 vendors. Once you have that map, it's then a good guide to decide what should we do with our existing vendors. Do we need more? Should we get rid of some? You really need a marketing blueprint to decide.
CMSWire: Proportionate to the market, how many enterprise companies would you estimate have a good blueprint for this today?
McCormick: We're probably talking less than 15 percent. It varies by verticals. For instance, the financial services firms are really just starting to get this right because of the security and compliance [issues]. They lack the marketing technology. The retailers are perhaps a lot better. There are some other companies like Disney and some insurance companies that are doing well in this space.
CMSWire: How long do you think it will be before that number climbs to 50 percent or 75 percent?
McCormick: I think we're going through a stage of massive evolutionary or revolutionary change at the moment. We talk about tag management and how that's evolving. We have your cross-channel management tools, which are evolving. And I think there is a period of consolidation among the vendors that needs to happen before we start to see that climb substantially. I think we will see straight-line growth in terms of maturity, but there are a lot of things that need to be commoditized before we see that happen. We're talking 18 months to three years before we see some significant growth from that 15 percent level.
CMSWire: Consolidation is probably a major fear for some customers. If they lock into one vendor and it gets acquired by a company they're not using, the offering could get tapered down, and they're starting all over. How do you advise clients on that?
McCormick: That is a pretty scary thing. As organizations, we've never really been great about consolidating, and that's not just on a technology level. It also applies to people and culture and business perspectives, as well. My advice really is, from a data-driven marketing technology perspective, is once you've done your acquisition, get things in order as quickly as possible in terms of the technologies relative to the online marketing suite map that I discussed, and use that as your guide for what you should keep and what you should eliminate.