How Marketing Technology Is Like the American Craft Brewing Renaissance
- With more than 2,000 marketing technology vendors, it seems like new vendors, products or solutions enter the market every week
- There are four factors, including market fatigue and regulation, that may combine and eventually put the brakes on these markets
- Marketing organizations need to selectively test drive a few technologies and make the decision that’s best for them
Not since the days before Prohibition has the U.S. witnessed such a golden age for beer, with so many breweries (more than 2,800 and counting) offering so many choices. But when will enough be enough? Catchy names and witty seasonal beers can only take you so far before the market gets fatigued and stops trying the newest brew du jour.
Is this the golden age of marketing technology? With more than 2,000 vendors, and counting, it’s hard to go a week – let alone a day or two – without hearing about a new vendor, product or solution entering the market. In many ways, it’s a great time to be in tech, but all good things eventually come to end – even the original golden age of American beer did, with a healthy dose of Prohibition. The question remains, “Are these market conditions sustainable?”
Here are four factors that may will combine and eventually put the brakes on these markets – or dare I say burst their bubbles – and I’m not talking about the bubbles in your beer:
The death of cheap money. Let’s face it. There is a lot of money being thrown in the direction of unproven technology and unproven business models. And why is that? It’s a combination of factors – a low barrier to entry into the SaaS world that spurs innovation, marketing’s thirst for new technologies, investors’ desires to become the next Facebook, Google or Amazon and, perhaps most importantly, a sustained influx of cheap capital (think quantitative easing) into the economy, which keeps interest rates and inflation low and morale and expectations high. When interest rates rise, budgets will fall (eventually) – or at least they won’t increase as much as they have in the past.
Market fatigue. There are a lot of choices out there for today’s marketers. It’s a wonderful time to experiment with new technologies that can really make an impact on your marketing efforts. Eventually, though, we all need to decide what works (and what to keep) vs. just swapping a tool for the technologie du jour. The influx of “too many choices” is confusing and time consuming for the customer and forces vendors to fight for the attention of a dwindling number of interested prospective buyers.
Consolidation. This is already happening. Daily, we witness the acquisition of the little fish by the big fish. We’re also seeing the consolidation of functionality into single platforms. Categories that a few years ago were distinct, like social media intelligence and social media management, are on a cross-pollinating crash course to become larger, more feature-rich social platforms. The upside of consolidation is, typically, integration with other existing technologies (albeit on a longer timescale then we’d all like) and simplification of available solutions for the buyer. The downside, however, sometimes rears its head (not the foamy kind on top of your beer) in terms of stifled innovation and loss of functionality or support.
Regulation. Have you noticed all the security and privacy breaches that have occurred lately (JPMorgan Chase, Target, Home Depot, Sony)? More than likely, these will spur a change in legislation. What if the software vendors were held accountable for these breaches and regulations were imposed on the technology industry similar to the financial, healthcare or public sector? This would drastically change the B2B vendor selection process and even some business models (particularly if you’re a software vendor.) It would also heavily impact your current marketing and sales technology install.
To select a good beer, you need to taste a few, you can ask your friends about their preferences and you can read reviews, but ultimately you must make the decision for yourself. Similarly, marketing organizations need to test drive a few technologies and make the decision that’s best for them. But unlike beer, marketing technology isn’t exactly cheap or disposable. So users need to be more selective about which technologies they test drive and select. This involves understanding your business needs and goals (including impact on customers), mapping your marketing processes to these goals and selecting the technology that will best get you there and lies within your budget.
The new golden age of American brewing lends itself to satisfying a virtually unlimited variety of tastes that the market can support. The world of marketing technology might not be so lucky.