From 2016 to 2017, 5X more marketing automation vendors were added than removed

tl;dr — From 2016 to 2017, the marketing automation category of the marketing technology landscape grew yet again, by 36%, from 156 vendors to 212. If you predicted it was going to consolidate in the past six years, sorry, you were wrong.

Marketing automation remains a bellwether of martech

It’s become a bit of a tradition here at chiefmartec.com: as I’m working on my yearly marketing technology landscape graphic, I release the “marketing automation” category in advance as a kind of sneak peek of what’s ahead.

Why marketing automation, which I crudely lump together with campaign management and lead management products? To me, it’s quintessential marketing software. It’s also a category that I’ve studied closely over the years, so I’m personally interested in its evolution. But most of all, I’ve found that it’s usually a bellwether for the rest of the landscape — the dynamics in this category tend to echo in many of the others.

But before sharing the 2017 version, here are three important notes:

1. The complete 2017 marketing technology landscape will be released in two weeks on May 10, at the opening keynote of the MarTech conference in San Francisco. You won’t want to miss this event — read this preview to learn everything going on those two days.
2. I’m incredibly grateful to have had a great collaborator on the landscape this year, Anand Thaker of IntelliPhi. Anand will join me for the MarTech keynote to share his perspective from working on this project these past few months and his eclectic engagement in this space over the last 15 years.
3. Sorry, but we cannot add any other companies to this category at this stage of our production. If you think your firm should be included, please wait for the complete landscape — it’s quite likely that you’ll be represented elsewhere in the landscape. Thousands of other companies are.

So here’s the category — click for a larger version — followed by some commentary:

There are 212 vendors included in this category, up 36% from 156 in last year’s landscape. Specifically:

• 142 vendors remained unchanged from last year
• 4 vendors changed their name, focus, or ownership
• 10 vendors were removed — acquired and absorbed or went out of business
• 66 vendors were added

Yes, more than 5X as many vendors were added to this category than removed. Pause for a moment to let that observation sink in. (However, not all that were added are brand new ventures — some I had simply missed in my research last year.)

Anti-consolidation and the triumph of empiricism

Just to state the obvious: this is a lot of marketing automation (and related) vendors. Even I am surprised that this category — one that has been around, relatively speaking, for quite some time now — grew this much. But it drives home to me just how vibrant this market is, as the state-of-the-art in marketing and software rapidly advances and as marketers get more savvy and sophisticated in what they want the technology to do.

Yet I’m sure this will provoke the same attack response that it did last year, and the year before that, and the year before that, and so on: “Marketing technology is going to consolidate!”

Every year, the prophets of consolidation get more vociferous in their proclamations, even as the space continues to experience double-digit expansion.

Now, in all fairness, I’ve never said that the space won’t consolidate. It’s ultimately a question of when and to what degree — although those are pretty big questions, with a very wide range of possible answers. Consolidation can end up taking many forms. For instance, if you define consolidation by distribution of revenue, it is already happening.

But I would humbly invite those who have consistently dismissed the majority of these vendors as one-person ventures (many are small, but not that small), copycats (many are quite innovative), or generally unviable businesses (many eschew the classic VC funding model and become profitable quickly) to consider a little more humility in predicting the future.

Empirically, the category has not consolidated its number of vendors — quite the opposite — and most of these businesses have successfully sustained themselves for multiple years in the absence of VC funding. And if you read through all 212 of their websites, as I have, it’s hard not to be impressed by how many are offering really great products and services.

So if your mental model had you convinced that it would have consolidated by now, with the majority of these vendors in a deadpool, you might want to acknowledge that the dynamics of this market are perhaps — just perhaps — different than what you expected.

On the bright side, that opens up a far more interesting set of possibilities for you to contemplate: how the dynamics of cloud computing, open source, APIs and microservices, global collaboration, marketing’s scope creep, wave upon wave of new disruptive technologies, and every company in a digital world asymptotically becoming a software company to some degree could be shaping a whole new kind of software market.

Sure, maybe massive consolidation will happen anyway — maybe as soon as next year — and this will all regress to a 1990’s-style business software market. I concede that’s one possible outcome.

But if that’s the only future you can imagine, then it might not be the start-ups in this space who are the ones suffering from copycat thinking and a lack of innovation.

P.S. This marketing automation category, as wild as it is, is only a tiny piece of the overall marketing technology landscape. Come join us at the MarTech conference in two weeks to see first-hand how the rest of the market is evolving — and learn how leading brands are harnessing it to their advantage.

P.P.S. Here’s a quick reference to the previous martech landscapes:

• 2016 Marketing Technology Landscape
• 2015 Marketing Technology Landscape
• 2014 Marketing Technology Landscape
• 2012 Marketing Technology Landscape
• 2011 Marketing Technology Landscape

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