The $100bn martech sector is under fire from struggling marketers

Mike Doyle, head of marketing at the 70-store retail chain City Beach told CMO Brief the martech industry was full of “snake oil salespeople” but marketers were guilty of “drinking their own Kool-Aid”.

He compared much of the martech sector to “big oil and big auto” – the latter he said was a reference to the luxury car segment where after-purchase servicing and spare parts were highly profitable but unforeseen by customers.

Professional services firms have also been criticised for taking in large fees promoting overly complex, and under-used, technology-led transformation programs. Martec vendors also face claims of over-selling the efficiencies and effectiveness of their systems.

Martech is now the single biggest budget allocation inside marketer budgets, at 29 per cent according to Gartner. Forrester Research forecasts the martech sector will top $US122 billion globally by 2022.

Despite the rapid growth of marketing cloud services from Oracle, Salesforce, SAP, Adobe, Google and IBM, marketing teams are increasingly overwhelmed at onerous implementation programs and unexpected staffing pressures needed to manage ongoing marketing automation programs.

Former Commonwealth Bank and Foxtel chief marketing officer Andy Lark said marketers within large companies were “really struggling”.

Mr Lark, now a principle at marketing advisory firm Group Lark, said he had looked at about 50 martech systems in the past two years with few able to deliver on their selling claims.

“Marketers are really struggling through a combination of their original business case not accounting for the enormous resourcing required to run and operate these platforms and the reskilling of their labour resource,” Mr Lark said.

“Equally troubling is that most organisations discover they don’t have the clean data lines that are required to flow from and to these platforms.

"There’s a lot of smoke and mirrors. They’re basically an assembly of parts that don’t work together and require numerous re-tooling and integration that can take six months to a year for a business just to turn on the core marketing communications element of the platform.

"They call it marketing automation but frankly it’s only automating mass spam email and customer communication.”

Mr Lark said large swathes of the marketing sector had not challenged “the logic that underpins many of these platforms”, including vastly different interpretations on sales and marketing funnels, which attempt to define the steps people take to make a purchase decision.

“Marketers are being asked to do more with less and so they buy into the digital hallucinates that are out there,” Mr Lark said.

“One of the things that I’m particularly critical of is many of these platforms are built on logic that has been perpetrated by the major IT identities that bear little relationship to what actually happens in the business.

"A lot of these people are professional services shops who know very little about marketing so they are rushing around creating really complex infrastructure that has little or no bearing on the customer or marketing lense.”

Mr Doyle said prior to joining City Beach he had spent 10 years with a number of start-ups “experiencing martech failures all the way through”. He initially saw martech as a silver bullet but realised most of the platform capabilities were oversold.

“Everyone is looking for the tech solution that can solve a problem,” he said. “We should evaluate them properly but marketers are under more time pressure and we don’t have a huge amount of resource. It’s a bit of a deadly combination.”

Mr Doyle said significant technical skills, resource and training were required to manage larger martech systems but City Beach had opted for a smaller Austrian-based company, Emarsys, specialising in the retail sector and e-commerce.

“We are seeing more platforms like Emarsys focus on the user as opposed to a really technical implementation and a very technical user base,” Mr Doyle said. “We’ve got amazing team at City Beach - our [Emarsys] implementation went exceptionally well. But we don’t have anyone officially certified. We didn’t go to a Salesforce boot camp and do all sorts of crazy stuff like we had to before.”

The London-based global vice president for retail and e-commerce at Emarsys, Alex Timlin, said “challenger” martech platforms to the big five cloud players were growing despite many large consulting firms and smaller agencies aligned to those large platforms.

“If you’re looking at Salesforce, Adobe or Oracle, they’re working with either Accenture or a similar consulting firm or they’re working with smaller local agencies who specialise in implementing those big marketing platforms,” he said.

“The big consulting firms look to build relationships with Oracle, SAP, Salesforce and Adobe because they can approach with a CRM system for Sun Life as well as Woolworths and Tesla.

"They could be selling to a supermarket chain and an insurance company so they need these broad platforms that in theory can do anything. But then those companies need to reverse engineer the solution for a brand with a professional services arm and that could be six to 12 months for implementation.

"It's great for the consultants because it always means there’s a heavy upfront revenue stream.”

Mr Timlin said the focus from smaller martech companies on specific industry sectors with more intuitive, less technical marketing navigation was driving their growth – other start-ups such as the Sydney-based CXTX’s No Code have a similar strategy.

But Mr Timlin conceded Emarsys could also end up being acquired by one of the large marketing cloud players - Adobe paid $4.7 billion last September for an Emarsys competitor, Marketo.

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