IDC expects the global market for enterprise marketing software to soar to $32.3 billion by 2018 -- a jump of more than 50 percent. But it won't come easy.
It will require a delicate balance of technology, creative talent and IT services for the market to reach its potential, said IDC Research Manager Gerry Murray, lead author of the IDC study. The 29-page report, which IDC sells for $4,500, is the first "comprehensive view of what the whole marketing technology envelope," said Murray. "It's a very big basket of technologies."
Due largely to multibillion investments by Adobe, Oracle, IBM, Salesforce and other giant software companies, the study predicts the marketing world will evolve from point solutions to marketing platforms. And, within a few years, we'll see Marketing-as-a-Service (MaaS) systems that will allow CMOs to farm out work in much the way they do now when they buy advertising, a shift that could trigger a shakeout involving many vendors.
"I don't think we have Marketing-as-a-Service today as we've defined it in the report," said Murray. "We have Platform-as-a-Service — that's what Adobe and Oracle and Salesforce are building. Many of these marketing solutions were born in the cloud to begin with, but they haven't really been put together as an integrated, comprehensive offering for marketing, and that's where we're going."
The report establishes 76 categories of marketing technologies in four major categories -- interactive systems, data and analytics, content production and management, and marketing management and administration. Together, they include about 1,000 companies.
But that won't last. The industry leaders will continue to acquire best-of-breed vendors. Other companies may merge, fold or soldier-on as they are today. Murray noted, "Just because you're acquired doesn't mean you won't shrivel and die."
"The shakeout is going to be focused on enterprise solutions because in order to get the ROI in the market, the enterprise accounts are going to drive a lot that ROI," he said in an interview with CMSWire.
"If you're going to make multibillion-dollar investments, you're going to need to have multimillion-dollar relationships to pay that back. You can't base your entire business model on small business if you're making those kinds of bets," Murray said.
The truth of that was verified yesterday as IBM reported it sales fell for the tenth consecutive quarter amid industry-wide changes. Big Blue, like other large software players, is betting heavily on a boom in marketing technologies to make up for slipping sales of its traditional products and services.
Murray gave a lot of credit to Adobe for starting in a relatively small corner of the content-creation segment eight years ago, then buying a long string of companies such as Omniture, Neolane and a variety of production management and content technologies.
"They've completely transformed their business and taken a very large footprint of the landscape in the marketing cloud," he said. "You can see how IBM, Salesforce, Oracle and others are following in that strategy because I think those guys had a vision."
After the market leaders pull together fully integrated marketing platforms, the next stage for agencies and business process outsourcers (BPO) to blend those platforms into a complete MaaS offering.
"I think we'll see 5 percent to 10 percent of the [global marketing and advertising] market taking advantage of that kind of [MaaS] offer," said Murray. "If I can rely on my agency to bring skills and talents to the table ... they I can use my advertising budget to buy one of those bundled services."
Even today, Murray noted, Adobe has developed close ties with Publicis, and Salesforce has a relationship with Omnicom. "And there are more to come," he predicted.
To be sure, enterprise CMOs could continue to manage their own hodge-podge of marketing systems as they do today. Murray said some of his largest clients operate 50-60 marketing systems -- "one has 100." However, he noted that staying on top of all those systems and hiring qualified IT staff to manage them internally is "really costly and complicated."
"You will turn to someone else to do some of it," he predicted. "You will use Marketing-as-a-Service in addition to building your own infrastructure."