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In my previous post, we took a longish walk down memory lane via nostalgia avenue. A vivid sojourn where we stopped, admired, deconstructed, and absorbed the evolution of the marketing technology space across product categories - from the 1970s to the 2010s. So, while the past is a valuable source of cogent chronicled knowledge; the present and the future hold even greater significance. Industry-reshaping forces, unignorable tech trends, and trailblazing innovation are propelling a customer-first today and data-secure tomorrow.
Martech vendors are listening closely and adapting with agility. To evolving business buyer expectations and end customer behavior. As the number of touchpoints grow, average customer buying journeys and lifecycles are becoming increasingly non-linear and consequently - more complex. Influenced by channel, device, and desired behavioral outcomes. With real-time, actionable data at the core of turning disparate interactions into high-probability conversions and long-term retention.
In today’s attention economy, where end customer switching costs are almost negligible and the next-best-deal or perceived convenience impacts browsing and purchase habits; time to market (and value) is a premium differentiator for brands aiming to maximize mind-, wallet-, and market share.
Set in this backdrop; breakthroughs in Generative AI, customer data consolidation, and stack interconnectivity have rapidly directed the product vision of martech vendors across categories. But, that is merely the surface of the glacier. Let’s zoom in to gather a deeper perspective on the recent past, rollicking present, and redoubtable future of the martech space. Join me once again; will you?
In February, 2020 Google dropped a major bombshell with their announcement around phasing out third-party cookies on their Chrome browser - by 2022. This wasn’t an isolated development though. The likes of other major browsers like Firefox and Safari had already phased out third-party cookies by 2017 and 2019 respectively in a bid to embrace proactive data privacy. So, while the martech rumour mills were periodically abuzz with the cookie deprecation on Chrome; the official announcement had vendors and business buyers alike scrambling for short-term and long-term solutions. Especially since Chrome accounted for over 55% of the web browser market, as of late 2019.
Marketers had and have been heavily reliant on third-party cookies to track website visitors, understand browsing behavior, serve up contextualized content, and improve customer experiences for decades. So, this development assumed even greater import when Google initially stated that they “won’t be building alternate identifiers to track individuals as they browse across the web.” This promised to compound major identity resolution and tailored customer experience delivery headaches. Add to the mix Europe’s General Data Protection Regulation (GDPR) from 2018 and the USA’s California Consumer Privacy Act (CCPA) from early 2020 - and there was a full-blown marketing migraine on the horizon.
What it also did was magnify the focus on the collection, centralization, and activation of zero- and first-party customer data that relied on greater customer consent. Zero-party data is shared voluntarily by customers via surveys, polls, quizzes, stated preferences, intentions, loyalty program choices, and more. Since it comes explicitly from the customer as a source; it is the most trustworthy type of customer data-point and lays the foundation for hyper-personalization as we know it.
On the same hand (ensconced in a different glove, if you will!), first-party data also comes via consent-to-collect customer data via embedded pixels on a brand’s website, mobile app, or social channels. These can include data-points like contact information, digital interactions, behaviors, purchase history, PoS, call centre, subscription intelligence, and more. A combination of consolidated zero- and first-party data sets the tone for potential individualized customer experiences at scale.
A cursory look at the below illustration will surface greater context on the differences between the types of customer data.
The shift from being data-driven and insight-backed to data-first and privacy-centric once again put the onus on Customer Data Platforms (CDPs) to up their identity resolution and data stitching game. Beyond the established legacy vendors; the likes of Hightouch, Akamai, Amperity, Listrack, Zeotap, and more re-entered the martech conversation with greater gusto. Twilio’s acquisition of Segment for $3.2 billion in November, 2020 added further fuel to the fire; signalling high-stakes intent and a punt on the future of customer data. All this while the Pandemic still impacted phygital consumption habits.
This period also spawned the repositioning of many Multichannel and Cross-Channel Marketing Hubs and Platforms as lightweight CDPs. An unstated sub-category that placed an emphasis on activating customer data via journey orchestration, recommender models, and an expanding integration library. Essentially, allowing marketers to do more with the collected, structured, and unified customer data at their disposal. What was fundamentally a marketing gambit in response to the changing times; also came with sound functionality sets that justified investment. Investment that the likes of Salesforce, Adobe, Braze, Bloomreach, Insider, and more harnessed to penetrate new markets and industries. SAP made a bold splash with the acquisition of Emarsys in November, 2020 to add more teeth to their customer experience product portfolio.
This period is also known for the increased leveraging of no-code/low-code capabilities in standalone tools and integrated platforms across the martech ecosystem. For context; Digital Adoption Platforms (DAP) like Pendo, Appcues, Whatfix, WalkMe (later acquired by SAP in 2024), Userlane, and more had been championing this technology for a while. Its integration into the martech fabric took time. With an undiluted focus on elevating ease-of-use, reducing developer dependency, and accelerating time to market, martech vendors began taking educated bets in this direction. Through in-house capacity-building or judicious acquisitions. For instance; India-based Netcore Cloud acquired Hansel to bolster their holistic customer experience capabilities across web and mobile channels.
Ubiquitous voice assistants like Amazon’s Alexa, Apple’s Siri, Google’s Assistant, and more added another layer of end customer interaction data. Conversational marketing companies like Intercom, Drift, and more continued to build AI-led intelligent chatbots that could easily be integrated across web, mobile, and social channels to share targeted information, accelerate sales cycles, offer timely customer support, and more. The increasing adoption of interconnected smart devices like watches, fitness trackers, TVs, gaming consoles, and more - and the ball was once again in the court of martech vendors to capture, unify, and activate additional device, channel, behavioral, and preference data. All tying back to the rise of lightweight CDPs.
The AI movement in the martech domain gathered greater momentum with product upgrades to fortify platform efficiencies and marketer-focused ease-of-use. The likes of Salesforce Einstein, Adobe Sensei, and more brought the power of speedy content creation, journey automation, hyper-relevant personalization, predictive segmentation, and more to a wider business buyer audience.
And, then came another major inflection point in November, 2022. OpenAI’s launch of ChatGPT was the first mainstream use of Generative AI (GenAI). Based on Large Language Modelling (LLM); Generative AI is capable of generating “human-like conversational responses; enabling users to refine and steer conversations based on parameters like length, format, style, tone, detailing, and language.”
It works on a combination of computer-led supervised learning and reinforced human feedback-led learning to deliver more tailor-made content driven by even more targeted prompts. A game-changer as a technology; ChatGPT’s show-stopping moment on the tech runway spurred the launch of the likes of Google’s Gemini, Meta’s Llama, Ernie, Grok, and more over the next 12-15 months. Generative AI also offered food-for-product thought to martech vendors that almost overnight found themselves playing catch-up.
The conversational commerce juggernaut wasn’t to be left behind either. A concept first popularized by former Uber leader, Chris Messina, in 2015; the likes of WhatsApp Business, LINE Messenger, and more bolstered their business messaging and low-friction, interaction-driven offerings via phased experiments in mobile-first markets such as Southeast Asia and Latin America. The eventual objective of empowering end users with the autonomy to browse entire product catalogs, add items to cart, complete purchases, raise customer queries, and more - on a channel of their preference with explicit opt-ins - was taking more concrete shape.
Brands and marketers breathed a collective sigh of relief when Google first extended its deadline for third-party cookie deprecation to the end of 2024 and then next to 2025. That collective sigh transformed into ecstasy when Google announced the formal reversal of the entire project; due to backlash from legal regulators, competition-observing watchdogs, and the marketing industry as a whole. Instead, they gave end users the option to enter into a Privacy Sandbox environment to take greater control of their personal data and make “informed choices about their web browsing” - without doing away with third-party cookies completely.
While this was not entirely unforeseen, it did leave digital brands in pole position to leverage the entire spectrum of customer data that they had already begun focusing on previously. Armed with the ability to collect, synchronize, and use zero-, first-, second-, and third-party customer data across channels while placing a premium on consent and privacy was and will always be an opportunity goldmine for revenue and retention growth.
Consequently; CDP vendors doubled-down on their capabilities to weave together disparate customer data sets from multiple sources; Multichannel Marketing Hubs (MMH) have continued to add coats of product functionalities with valuable varnish. Marketing automation has been a critical cog in the lifecycle marketing wheel for brands over the past two and a half decades. But, the transition from segmented engagement delivery to hyper-contextual experience provision has ensured that agile vendors have kept reasonable pace with market expectations at large.
Calculated experiments around pricing models from traditional subscription-based packages to usage-based tiers and a bespoke solutionist sales approach have also opened up chances for greater customization; in response to business buyers making uber-prudent platform investment and contract renewal decisions. This can also be gauged by Gartner’s Hype Cycle for Digital Marketing for 2024 where Multichannel Marketing Hubs and Mobile Marketing Analytics feature prominently in the Plateau of Productivity - earmarking these sub-categories for hyper-relevance, at least for the next ~2 years.
Product categories/sub-categories like Composable Martech, Consent and Preference Management, and CDPs may have fallen into the Trough of Disillusionment; but analysts remain bullish on their long-term payoff for business buyers regardless. A veritable shoutout to the value of mining, de-siloing, and using customer data across the spectrum - from anonymous web visitors and unidentified first-time mobile app-launchers to repeat users.
But, let’s delve a little deeper into what the market and top-tier analysts are saying in this space. Building on Gartner’s razor-sharp industry nous - courtesy their Magic Quadrant on Multichannel Marketing Hubs Report for 2024 - they delineate three Must-Have capabilities that MMHs should possess:
1. Customer Profile Management: The integration of multiple customer data feeds into unified customer profiles that enable campaign management, journey orchestration and channel execution.
2. Campaign and Journey Management: UX and UI support for campaign and journey-building workflows; including functionality supporting campaign and event-triggered journey design, testing and versioning (journey life cycle management). These should be suitable for non-technical marketer personas to go from ideation to execution in minutes.
3. Multichannel Execution and Measurement: Ability to deploy and measure the performance of personalized messages from campaigns and journeys through a mix of native channels and integrated activation points. These should include email, SMS (or other mobile), and advertising in common walled garden destinations (Eg. Google, Facebook, Instagram, etc.).
In a nutshell, validating my aforementioned observation. An increasing number of business buyers want to do more with less, without waiting to accumulate, activate, and analyze vast troves of customer data-points and inferences.
Gartner also outlines the following Optional capabilities that MMH players are increasingly using as value differentiators:
1. Prescriptive Intelligence and Decisioning: Automated guidance to help marketers identify and maintain underperforming journeys (anomaly/opportunity detection) as well as to prioritize and optimize the overall mix of journeys and campaigns (next best action).
2. Campaign Ideation: GenAI-enabled capabilities to enable marketers develop new ideas for campaigns and journeys through ad hoc, text-based queries and interactive campaign briefs.
3. Campaign Content and Code Generation: GenAI-enabled capabilities to create or
manage content that is unique to multichannel marketing (beyond the ability of an MMH to ingest content from other sources, like DAMs). These may include the creation of personalized variants, real-time content as well as code-based elements, like surveys and landing pages.
There’s another attention-worthy angle to it all. The convergence of brand.com eCommerce - on the back of the entire D2C revolution that took ground during and in the slipstream of the Pandemic. Since then; Digital Commerce has emerged as a revenue-driving product sub-category. It has also fuelled more in-depth Personalization Engine capabilities in existing MMH platforms - bringing together website, mobile app, search personalization, recommendation engines, widgets, onsite and channel contextualization, and more.
Let’s blitz past the jargon here for a second. All these current trends and meaty capabilities are indicative of a simple, core reality. Business buyers aren’t obsessing over adding best-of-breed solutions to their martech stack any longer. Expansion is not the solution; consolidation and optimization in the realms of meeting short- and mid-horizon revenue goals is. And, this has dovetailed with major MMH players recalibrating their product offerings in response to changing market dynamics.
Gartner’s 2024 CMO Spend Survey lent further credence to this reality. Martech’s percentage in marketing budgets has gone down from 25.4% in 2023 to 23.8% in 2024. The lowest in the last decade. Distressing numbers? Not entirely. This is merely a cyclical development in response to diminishing overall budgets and renewed laser-focus on revenue and retention North Star Metrics. Something that places extra responsibility on martech vendors in this climate of buyer pessimism and AI disillusionment.
This has also opened up the playing field for niche vendors that are packaging and repositioning their core MMH capabilities around revenue and retention. These vendors cater to specific verticals (Eg. eCommerce, Retail, Grocery, Travel, etc.), focus on specific channels (Eg. Email, Mobile, WhatsApp, etc.), and/or more. The market may be fragmented; but it is also large enough for enough value to be co-created and delivered. Who dares, wins - and who continues to dare calculatedly; will win more consistently.
I can’t promise that the hype around AI-enabled capabilities within martech will die down any time soon. Nobody can, for that matter. It brings with it interesting opportunities and undiagnosed risks. The past 5 years has seen immense flux and periodic gyrations in core technology and buyer considerations.
So, what we can potentially look forward to is a period of calm, cohesion, and consolidation. Here are some of the key martech and customer experience trends that I envision gather momentum in the next 12-18 months:
1. AI-infused Customer Engagement: AI or GenAI can no longer be an afterthought clumsily parachuted on to certain modules of the core product. Agile players with a firm pulse on the market and a providential late-mover advantage have taken a major headstart in incorporating GenAI across the length and breadth of their product.
This implies going beyond content ideation, generation, optimization - and deploying LLMs with voice prompts to onboard customer data, create rich profiles, build unique segments, craft, test, and activate campaigns, journeys, generate actionable predictions, and much more.
2. Agentic AI and Digital Twins: Gartner defines Agentic AI as “goal-driven software entities that have been granted rights (or agency) by the organization to act on its behalf to autonomously make decisions and take action.” Essentially, its ability to take action autonomously or semi-autonomously will help businesses justify their investment in GenAI projects (powered by LLMs). This holds true in the martech landscape as well.
Take a quick glance at this telling statistic from the Gartner 2024 CIO Generative AI Survey. Almost 50% of respondents believe that GenAI can help elevate customer experience.
Agentic AI will only amplify and expedite that goal by micro-automating personalization at every stage of the buying journey. Now these workflows may be crafted manually, but the execution with minor or negligible human intervention can be delivered with timely precision.
Under the umbrella of Agentic AI, we will also see rising adoption of Digital Twins. These use Agentic AI to simulate scenarios from synthetic data to trigger actions or workflows based on a chosen business goal. In the martech scheme of things, these become digital replicas of customer segments, reflective of unique segments - based on demographic, technographic, behavioral data sets, and more. Marketers will be able to interact with these Digital Twins to understand what their customers want, how they are most likely to react or interact, and what messages, campaigns, or journeys would work best to either convert, engage, or encourage repeat purchase.
Of course, all of this also depends greatly on training AI models with the right quantity and quality of zero-, first-, second-, and third-party data, eliminating hallucinations, and establishing the right amount of manual oversight.
3. Trust-led Conversational Commerce: We’ve seen how the likes of WhatsApp and LINE Messenger - and vendors working with them - have built frictionless eShopping experiences within the app, enhance customer service, support, and more. The infusion of GenAI will continue to help marketers build rich-media campaigns, respond to instantaneous queries, resolve complaints, build interactive connections, and more. Enter the next era of Velvet Rope or White Glove Marketing.
The use of Rich Communication Services (RCS) - the next generation of text messaging - where only verified businesses can send messages to customers will increase. Apple’s adoption of RCS in September, 2024 was another arrow fired in the direction of trustworthy mobile communication
4. Customer Loyalty as a Retention Lever: As per Forrester, brand loyalty across B2C industries is likely to fall by 25% in 2025. Price sensitivity and undifferentiated product offerings will fuel switching behavior. But, loyalty programs present an antidote to that headache. Vendors will brainstorm and roll-out barnstorming scalable cross-channel loyalty campaigns and programs that go beyond mere discounts, points, miles, brand currency, and what have you.
While standalone loyalty management platforms like Talon.one, Yotpo, Voucherify, Zinrelo, Marigold, and more will see independent growth; MMHs will benefit by establishing seamless integrations with these players to maximize CLTV and ramp up retention.
5. Data Privacy-first Marketing: As international governments clamp down on surreptitious customer data collection and targeting practices, martech vendors will also account for existing and new privacy, storage, and utilization frameworks and guardrails within which they operate and deliver value. In fact, 137 nations now have national data privacy laws and regulations across continents - that’s 70% of countries globally. This percentage is only likely to increase in the mid-term; placing greater responsibility on consent-led zero- and first-party data collection and activation on both buyers and vendors alike.
Incremental upgrades to omnichannel marketing capabilities to account for new end customer behaviors such as review online, purchase in-store (ROPIS) will see the delivery of unified, all-encompassing customer experiences across all channels. To ensure seamless buyer journey transitions, behavioral understanding, context continuity, and more.
With buyers making a hard-shoulder turn towards more fiscally-responsible purchase decisions; the spotlight is firmly on an outcome-oriented mindset. In fact, Hubspot supremo, Dharmesh Shah, foresees the evolution of SaaS into RaaS (Results-as-a-Service) with staunch support from Agentic AI models. This holds true for martech vendors as well as they attempt to remain aligned with a market’s crystal clear mandate. We shall take a concerted tumble down this rabbit-hole in a future post; I promise!
But, for now it is important to look at the key considerations that will shape purchase decisions in the next couple of years; especially for enterprise business buyers. Considerations most succinctly captured in The Forrester Wave: Cross-Channel Marketing Hubs (CCMH), Q4 2024 report:
1. Scalability, stability, and data security: Global MMH (or CCMH) vendors that have carved a niche for themselves will often be in the pilot’s seat to drive value for enterprises looking to integrate multiple solution components or business-specific complex deployments. That’s merely a function of a proven track record, nimble go-to-market strategies, and data-secure practices and processes that serve this segment across diverse markets.
2. Extreme flexibility: The ability to onboard, de-duplicate identities, manage preferences, and act on customer data-points across sources and touchpoints - with agility - will be key for growth on both sides of the martech table.
Integrating brand.com websites, mobile apps, eCommerce platforms and marketplaces, messaging platforms, social media channels, smart devices, and more offer layers of complexity cloaked in actionable opportunity. In response to these challenges, vendors will double-down on enhancing their integration suites, customization capabilities, partner ecosystems, and customer support infrastructures
3. New functionality adoption: Fed on a staple diet of tech-driven innovation; the collective martech derby will continue to gallop at breakneck velocity. Harnessing GenAI, Agentic AI, Conversational AI, micro-segmentation, and more can be viewed as daunting and often influenced by tailored requirements. The onus has and will continue to fall on vendors to demonstrate, educate, implement, and unlock tangible value with their relatively new functionalities that directly tie-back to impactable business goals.
Niche players with transparent pricing, strong WYSIWYG functionalities, localization capabilities and support, and demonstrated time to value will find favor with small and mid-market buyers. As well as with enterprise buyers that are increasingly frustrated with archaic platforms that don’t meet their needs or are locked into long-term contracts with no end in sight. Patience may be a proverbial virtue - but it will be a rarefied commodity in this dynamic climate.
Martech spends may see a slight increase in investment or may remain largely static in the next couple of years. These will have knock-on effects for vendors - extended sales cycles, higher probabilities of abandoned deals, downgraded opportunities, lower renewal rates, diminishing returns on opportunity and revenue pipeline goals.
From a vendor perspective, the collaboration between marketing and sales finds itself at an inflection point. The judicious use of technology to maximize B2B operational efficiencies will only add to that challenge. This is where Precision Marketing will come into play. According to Gartner, this allows vendors to leverage technology to develop and nurture a deep understanding of both customers and prospects with minimal wastage of time, effort, and monetary resource wastage. And, may be facilitated using:
1. AI-led Lead Generation: To improve high-conversion probability lead identification, scoring, and predictive engagement. For platforms tom-toming their personalization capabilities; we are likely to see greater hyper-personalization in outbound marketing based on buyer preferences, adoption cycles, and historical interactions.
2. GenAI-led Journey Optimization: When GenAI models are applied in conjunction with predictive analytics or trained AI twins to change-managed sales processes; granular levels of sales automation, buyer segmentation, and journey personalization are likely to be achieved.
3. Blend of Sales-led Growth (SLG) and Product-led Growth (PLG) Strategies: We will see an increasing number of vendors at least experimenting with a PLG go-to-market strategy to understand the finer nuances between both buyers and users. Immersive product experiences will unlock new value to pick up intent signals via product and feature usage, points of friction, use case deployment, and more.
This scenario also merits a smarter tech and human-enabled strategic and tactical approach to ringfence and accelerate growth. Some countermeasures may include:
1. Identification of dwindling-interest prospects and low-adoption customers: To improve timely forecasting and account for risk assessment of more relevant factors with respect to sales opportunities. Sharper focus on active mid-funnel deals will be needed to bolster opportunity conversions
2. Optimization of sales process and partner ecosystem enablement: Sales teams and channel partners will need to dynamically detect negative signals within their pipeline and act appropriately. This includes equipping internal and external stakeholders with the digital dexterity to manage buyer interactions and content delivery across digital, virtual, and physical channels
3. Adoption of digital accelerators to expedite sales cycles: Vendors would benefit from leaning more on digital content, interactive demos, tools, chatbots, human-led live chats, digital sales rooms, and more to offer both guidance, consultation, and product-specific intel. The objective must be to strike the right balance between self-serve tech and human conversations
The wheels of martech will continue to turn. Seawinds of change will exacerbate market forces, buyer sentiments, and vendor pivots. Pivots that empower brands and marketers to become smarter, faster, and more creative. Customer retention needs to be prioritized over spray-and-pray acquisition and engagement tools and tactics. End customer expectations will continue to evolve. Human-centric AI-enablement will be the way forward; as all stakeholders endeavor to separate herd hype from relevant reality.
Promised lands need to be steeped in more fact than fable. So, vendor positioning and repositioning exercises will need to echo a benefits and value-convergence tune. All roads may lead to Rome - but all roads don’t necessarily lead to revenue and ROI. But, most indications suggest that routes along this avenue demand a disciplined mindset backed by calculated data-driven experiments and decisions.
2025 and beyond will need a collective responsible, renewable, and results-oriented responsiveness to unravel and sustain growth. Let’s get ready to rumble!
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