A multi-year martech boom is underway. Global martech spend is projected to surpass $215 billion annually by 2027, up from $131 billion in 2023, according to a Forrester forecast.
Last year, spend increased 10.9%, according to the report, Global Martech Software Forecast, 2023 – 2027. Annual growth is projected to climb to a steady 13.3% over the coming years.
B2C budgets. Much of the growth is driven by large consumer brands. Global B2C marketing organizations spent 18% of their marketing budget on martech last year.
This share of the budget is expected to grow. Two-thirds (66%) of marketing decision-makers say they plan to increase their technology spend, according to Forrester’s Marketing Survey, 2023.
Why we care. Competitive pressure is surely a driver for increased market investment, moving forward. This represents a turnaround from 2023, when growth slowed after coming out of a sharp pandemic-era acceleration. In 2022, annual growth peaked at 16.7%, according to Forrester. The report cites new generative AI capabilities and low-code tools as further drivers for steady growth in the coming years.
Spending is spread evenly. Martech spend is spread evenly across three main pillars, the study found. Each of these broad areas account for approximately one-third each of martech spend:
- Brand strategy (resource and performance management).
- Brand experience (experience delivery and automation).
- Customer understanding (data management and analytics).
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Data solutions. Not surprisingly, a key driver for increased martech spending is the importance of data management. The customer data management segment of martech is expected to grow 14% annually, reaching $37 billion by 2027.
Need to integrate. Martech vendors continue to proliferate, with the number growing to over 11,000 in 2023. With so many tools across marketing functions, organizations have adopted more technology without integrating many of these tools.
Forty-seven percent of marketers said they’d like to reduce the number of solutions they use, according to the Forrester report.
Dig deeper: How strategic martech integration drives growth
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The marketing technology industry is expected to experience significant growth in the coming years, with projections indicating that it will surpass $215 billion by 2027. This growth is driven by the increasing demand for digital marketing solutions and the need for businesses to stay competitive in an ever-evolving digital landscape.
Marketing technology, also known as MarTech, refers to the tools and software that businesses use to plan, execute, and measure their marketing campaigns. These tools include customer relationship management (CRM) systems, marketing automation platforms, social media management tools, and analytics software, among others.
The rise of digital marketing has led to an increase in the number of MarTech solutions available to businesses. With the proliferation of digital channels, businesses are now able to reach their target audience more effectively and efficiently than ever before. This has led to a greater demand for MarTech solutions that can help businesses manage their digital marketing efforts.
One of the key drivers of the growth in the MarTech industry is the increasing importance of data-driven marketing. With the vast amount of data available to businesses today, there is a growing need for tools that can help businesses make sense of this data and use it to inform their marketing strategies. MarTech solutions that offer advanced analytics and data visualization capabilities are in high demand as businesses look to gain a competitive edge through data-driven insights.
Another factor contributing to the growth of the MarTech industry is the increasing adoption of artificial intelligence (AI) and machine learning (ML) technologies. These technologies are being used to automate marketing tasks, personalize customer experiences, and optimize marketing campaigns. As AI and ML continue to advance, we can expect to see even more innovative MarTech solutions emerge.
The COVID-19 pandemic has also accelerated the growth of the MarTech industry. With many businesses forced to shift their operations online, there has been a greater need for digital marketing solutions. The pandemic has also highlighted the importance of having a strong online presence, leading to increased investment in MarTech solutions.
The projected growth of the MarTech industry presents a significant opportunity for businesses to improve their marketing efforts and stay ahead of the competition. However, it also presents challenges, as businesses must navigate an increasingly complex MarTech landscape and choose the right tools for their needs.
In conclusion, the marketing technology industry is poised for significant growth in the coming years, with projections indicating that it will surpass $215 billion by 2027. This growth is driven by the increasing demand for digital marketing solutions, the importance of data-driven marketing, and the adoption of AI and ML technologies. Businesses that are able to effectively leverage MarTech solutions will be well-positioned to succeed in an increasingly digital world.
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