Hold on to your hats, spending on marketing tech is about to take off — $120 billion over the next decade, up from $1.2 billion today. At least that's what Ashu Garg, general partner at Foundation Capital, sees when he gazes into his crystal ball.
"This is unprecedented growth in any software category I've ever come across," Garg says. "There's a fundamental shift, an irreversible trend, of consumers living in a digital world" that's causing a spike in demand for emerging marketing tech.
Foundation Capital, a Silicon Valley venture capital firm, follows more than a thousand marketing tech companies and has an impressive track record of investments in this market and has invested in companies such as Responsys, Tealeaf, Freewheel, Localytics and others. Garg came up with his $120 billion-in-marketing-tech prediction after many conversations with marketers and data analysis of spending trends. (Download "MarTech and the Decade of the CMO.".)
Money Is No Object
And he's not alone in his rosy view of the market. Late last year, Gartner surveyed some 300 companies and found that digital marketing spending averaged a quarter of the marketing budget in 2014. Half of the companies also plan to increase spending this year.
"Gartner's 2014 CEO Survey found that digital marketing was the No. 1-ranked CEO priority for technology-enabled business capability for investment during the next five years," says Yvonne Genovese, managing vice president at Gartner.
There's no question the CMO is the CEO's new best friend in the world of the digital consumer. The traditionally well-defined lines between sales, marketing and customer service departments are blurring, as digital marketers become the tip of the spear on virtually every customer interaction, including closing online sales.
In the world of the digital consumer, 80 percent of media will be consumed digitally, Garg predicts. The 30-second television commercial will fade into a bygone marketing channel, he says, underscored by Super Bowl spots costing half as much in a decade. Goodbye print media, replaced by digital displays and proximity-based advertising. And all media will be personalized to the consumer and bought and sold programmatically, Garg says.
"Marketing is a technical discipline now," Doug Milliken, vice president of global brand development at Clorox, told Foundation Capital. "We have to re-frame things we have been doing for 100 years."
Can Marketers Control the Message?
One of the top concerns among marketers is the changing nature of content.
Digital consumers have embraced an electric, chaotic word-of-mouth rapport with others online. These possibly crowd-sourced conversations are outside a marketer's control. Digital consumers share stuff on social media, participate on discussion boards, read blog posts, watch Youtube videos, scan customer reviews, and trust comments from strangers over marketing collateral.
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