Marketers’ love of a gadget might not have been a resounding success so far, but there are no signs of them giving up yet, with global spend set to rocket 64% from $131bn last year to $215bn by 2027 as the quest for the perfect solution accelerates.
So says a new Forrester report, Martech Software Forecast 2023-2027, which examines six categories of martech software, namely, experience delivery, marketing automation, marketing resource management, marketing performance management, customer analytics and customer data management software.
It predicts that martech will grow faster than the broader enterprise software market, up from 14.9% of total software spend in 2023 and to 15.4% in 2027.
Meanwhile, M&A activity has also bounced back in recent quarters. Despite a slowdown in 2022, notable transactions in 2023 include Contentsquare acquiring Heap to strengthen its analytics platform, and Splio acquiring Tinyclues, an AI-powered predictive marketing platform.
In terms of investment, the spend gets spread evenly across marketing responsibilities. Just over a third (38%) of budgets go to technologies that support brand experience, 32% goes to technologies that support customer understanding and 30% goes to technologies that support brand strategy.
However, data remains the cornerstone of modern technology stacks. Customer data management will grow at a CAGR of 14% between 2023 and 2027 and reach $37bn.
Perhaps unsurprisingly, generative AI is also driving growth in the market. But while early use cases for focus on creative development, like copywriting and email copy, future use cases include natural language querying for creating new audience segments, modelling and optimising performance metrics, and tasks such as customer journey mapping.
The report states: “Customer data management, customer analytics, marketing performance management, and marketing automation will drive martech spend as marketers look to keep pace with the rapidly evolving digital environment.
“The rapid digitisation of consumer experiences and marketers’ continuous adoption of new technologies create plenty of opportunity for the next phase of growth.”
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