Since the integration of ‘marketing’ and ‘technology,’ the number of related applications is understood to have seen an upward trajectory. Marketing technology (martech) has become crucial in enhancing marketing campaigns. A 2024 global study by Statista, a data and business intelligence platform, evaluated the martech landscape and identified over 14,100 martech solutions available to industry professionals this year. This marks a more than 100% increase from the 7,040 solutions recorded in 2019, prior to the pandemic. “I believe martech stack consolidation enhances marketing campaign effectiveness by streamlining data management and providing a holistic view of customer interactions. A cohesive stack aligns with business goals, facilitating real-time analytics for decision-making and personalised user engagement, which is considered crucial in today’s competitive market. By breaking down data silos and establishing a unified view of data, marketers can gain an understanding of their customers’ behaviours and preferences across touchpoints,” Abhishek Gupta, chief operating officer, CleverTap, a customer engagement and retention platform, told BrandWagon Online.
Recent research indicates that approximately 60% of marketing budgets are now allocated to technology. However, many marketers struggle to fully leverage their investments, highlighting the need for martech stack consolidation. From what it’s understood, martech stack consolidation enables companies to streamline operations, improve data management, and maximise their return on investment (ROI). As far as projections are concerned for the international martech sector, it carried a $329 billion worth valuation in 2022 and is expected to clock $1.7 trillion within 2032, at an 18.5% compound annual growth rate (CAGR) during 2023-32, according to Allied Market Research, a market research and advisory company.
The ROI parabola
From a centralised perspective, how does martech stack consolidation increase revenue? Well, the ‘favourable’ answer seems to lie in a report, which suggests that this process can lead to a 20-40% rise in marketing ROI, on account of its ability to correlate martech stacks with an organisation’s marketing strategy, by Kearney, a management consulting firm. Furthermore, media reports suggest that the methodology helps companies utilise the complete potential of martech stacks, considering how marketing executives mentioned a 58% usage of their martech stack base, with the base representing 26% of their overall marketing expenditure, in the 2020 Gartner Marketing Technology Survey. According to reports, 71% of Indian businesses are already investing in real-time customer experience delivery technologies, demonstrating the competitive advantage of real-time marketing responses using a consolidated martech stack. “48% of Indian firms are, currently, harnessing artificial intelligence (AI) and machine learning (ML) for predictive analytics, a key facet of decision-making facilitated by a cohesive martech stack. I think these companies, leveraging AI-enabled technologies, have also improved their bottom line and efficiency by as much as 65%,” Raviteja Dodda, co-founder and CEO, MoEngage, a customer-engagement platform for brands, specified.
In recent years, signs imply that companies have started to tighten their purse strings with their annual marketing funds, which has further upheld the importance of martech stack consolidation. Companies reduced their marketing expenses from 9.5% in 2022 to 9.1% in 2023, with regard to insights from a survey by Harvard Business Review, a management magazine. Overall, for 2023, close to 30% of advertisers stated their plans to reduce advertising expenses, according to a World Federation of Advertisers poll. Not only that, organisations can save up to 25% in costs by consolidating tools and technologies. Furthermore, AI-enabled optimisation, provided by a new-generation, insights-led engagement stack, can drive up cost efficiencies, with almost 2,362, rounding up to 77%, of the recent 3,068 applications being generative AI (genAI) based, in 2024. Close to 53% of marketers mentioned budget constraints as one of the top barriers to implementing new martech tools, according to a Walker Sands report. Any increase in conversions, whether that leads to customers or website visitors to subscribers, can indicate an improvement in one’s marketing activities due to the consolidation of their martech stack.
The organisational balance
Going by market reports, businesses have emphasised on the need for a consolidated martech stack to drive productivity. Approximately 88% of Indian businesses stated that automation will help drive productivity in different areas, as highlighted by a SAP Concur survey. On that note, the point to be discussed remains around the kind of approach taken by organisations for consolidating their martech stacks. Let’s take the example of Adobe, a computer software company, which has its Adobe Experience Cloud, that comprises integrated marketing tools encompassing analytics, content management, advertising, and customer data management. For companies, utilising the Experience Cloud enables a consolidated approach within the Adobe ecosystem. Other examples of companies consolidating their martech stacks include Salesforce, a cloud-based software company, which offers a customer relationship management (CRM) platform with built-in marketing automation functionalities, for companies to leverage Salesforce for sales can extend its capabilities to marketing, reducing the need for additional point solutions, and HubSpot, an AI-powered customer platform, which presents a marketing platform encompassing CRM, email marketing, content management, and social media marketing tools, to help companies with a solution for core marketing functions through HubSpot’s consolidation approach. “This consolidation can enhance the overall data capture in ‘martech’ stack by integrating marketing technologies and applications in a manner so that data can move across them without getting compartmentalised. It means that all communication with customers and their interactions as well as their engagement with the company and the product can be driven, documented and controlled in one system. Overall, these insights help marketers by making it easier to spot patterns and trends in the customer base. Such an approach to managing data can enable improved target marketing, ensure right and effective marketing, and better decision-making, which results in overall better rates of conversion,” Abhishek Tiwari, global business head, NetSetGo Media, a mobile advertising agency, highlighted.
However, balancing personalised marketing efforts and privacy regulations, such as the General Data Protection Regulation (GDPR) and the Digital Personal Data Protection Act (DPDPA), is understood to be a challenge for marketers. Despite these challenges, around 94.1% of businesses believe it is possible to achieve a balance between collecting data for marketing purposes and respecting customer privacy, according to Termly, a software company. This highlights the role of martech stack consolidation in navigating these complexities. As the landscape continues to evolve, adopting a consolidated martech approach is believed to be essential for companies aiming to stay competitive and responsive to both market demands and regulatory requirements. “Consumer brands need to evaluate tools and vendors that are in line with the compliance outlined by compliances such as GDPR and DPDPA. Before choosing a new addition to their existing martech stack, consumer brands should check for certifications such as ISMS ISO 27001:2013, SOC 2 Type 2, CSA STAR Level 2, compliance with audits from BSI Group [CERT-In empaneled], having all Software-as-a-Service (SaaS) Infrastructures, among others. Incorporating such compliances into business strategy is not just a legal requirement but a strategic imperative for the business’s future,” Dodda concluded.