Competition And ROI Will Put Today’s Mar Tech Stack On A Much-Needed Diet

tom-oreganData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Tom O’Regan, CEO at Madison Logic.

The marketing technology landscape is bloated. Scott Brinker’s super graphic shows a whopping 1,876 vendors across 43 categories. Marketing tech stacks tower with layers of point solutions, with an average of 17 tools per stack. That’s just crazy.

We’ve reached a point of super-saturation. I anticipate the pool will soon start to shrink while at the same time, the number of tools in the stack dwindle as technologies take on double-duty.

ROI will drive this shift. As the mar tech landscape matures, the tech firms that survive will be those that deliver real value, based on guaranteed business outcomes. The tools that can increase transactions and drive revenue will rise to the top, edging out the players with less concrete benefits.

“We are clearly seeing a movement away from media proxies,” Terry Kawaja, founder and CEO at LUMA Partners, told me recently. “Marketers are increasingly insisting on paying for results rather than impressions, or any other proxy for that matter. Companies that have deep audience data like Facebook can afford to take on this challenge, which raises the bar for other publishers and will further ignite the need for identity, analytics and attribution solutions that is driving the current mar tech wave."

The maturation of the mar tech stack will likely occur at the expense of the ad tech stack. In a recent article, Dave Morgan at Online Spin predicted that marketing technology would “eat” ad tech.

“The power in the media and marketing world is shifting from serving intermediaries to serving principals,” he wrote. “[It’s moving] from delivering media outputs for agencies to guaranteeing business outcomes for marketers, from serving agency trading desks to serving marketer enterprises. And, unfortunately, most ad tech today is anchored on the wrong side of those shifts.”

Ad tech has grown on the backs of vendors making claims of huge reach or an abundance of impressions at low prices. Reach and impressions are attractive, but how useful are they for businesses? How can reach and a million impressions positively impact the bottom line?

In the B2B space, there is growing demand for performance benchmarks. CMOs must prove their budgets are well spent and show the return for every dollar. While the ad tech industry has in the past seen healthy growth thanks to brand metrics, such as increased favorability and brand lift, as we move forward those metrics must correlate directly to increased sales.

Marketing technology, on the other hand, sits closer to the marketer. That means fewer middlemen and more focus on measurable results. Mar tech favors CMOs over intermediaries by delivering measurable, meaningful business results. One example is conversion-focused, marketing automation platforms, which are fueled by marketers and data to deliver results that map directly to the customer journey. They don’t just drive brand lift, they deliver results that lead to conversions and transactions. They fill the funnel and positively impact the bottom line. They are measurable and accountable.

As we see marketers getting smarter with technology and data, the tech players that support business goals will begin to outnumber vestigial point players. I believe most of those winners will sit on the mar tech side of the wall, along with some notable exceptions on the ad tech side.

In the end, the tech companies that drive measurable results will win the day, while the shiny objects fizzle into obscurity. It’s a natural evolution: the things we need stay, adapt and improve; the things we don’t need will disappear. The ecosystem of vendors and suppliers will shrink as the heartier players either absorb or squeeze out the weaker ones.

And, as a result, that giant marketing stack should shrink to the strongest players, allowing marketers, along with their tech partners, to focus on the results.

Follow Madison Logic (@madisonlogic) and AdExchanger (@adexchanger) on Twitter.


  1. Vendors will need to be upfront about expected benchmark performance and ROI, it's the only way for marketers who are shifting more and more marketing dollars to digital to justify true budgets. As time goes on and marketers try to wade through an increasingly cluttered and fragmented landscape to reach their prospects in a personalized way, we believe that the martech stack will actually grow. As the stack grows, marketers will be quick to cycle out those tools that cannot demonstrate a clear ROI.

  2. Hey Tom, I'd like to add a nuance if I may... About five years ago, it was predicted the Ad-Tech luma landscape would consolidate, but five years later the consolidation has really only just started. So I suspect Mar-Tech has yet to get bloated before it goes on a diet, VC funding trends seem to support this. In the mean time Mar-Tech will eat Ad-Tech for lunch and as you pointed out, mainly because Mar-Tech is closer to B2B closed/won deals. B2C Ad-Tech has promised this value prop for as long as "Attribution" as been around, but Ad-Tech has failed real B2B attribution and is therefore being surpassed by Mar-Tech as we speak. Yes, true ROI to CMO's is what is in demand, and in the world of B2B its the full tech stack operated by the CMO is where this ROI is reported and Ad tech is as far a way from that as an un-viewable impression is from a person. The tech stack operated by the CMO is the winner here, and any ad tech provider that doesn't integrate into the fuller funnel is as good as dead. While Ad-Tech is finally consolidating, I think Mar-Tech has only just begun… god forbid the Luma Partners lose their business model ☺


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