The adtech agencies ended up being the erstwhile ad agencies who learnt the tricks of digital and did acquisitions. They combined their creative and content skills combined with some analytical and tech skills to deliver the outcomes their customers wanted. I don’t think the adtech agencies will make the transition to becoming martech agencies.
A martech agency will need to be built atop a martech platform. A martech platform is much more complex; it comprises multiple components including a CDP (customer data platform), analytics, automation, personalisation, product experience, and multi-channel communications. It also needs a powerful AI engine and APIs to connect with other point solutions. Here is an example of the Netcore Cloud stack:
A martech agency thus has three choices: it can buy an existing full stack, it can stitch it together from best-of-breed solutions, or an existing martech full stack provider can decide to leverage its product and become an agency. The first two options are not easy: the complexity of martech solutions means that agencies will face the same limitations that brands face in utilising the full power of the platforms. A deep understanding of the martech full stack is a critical success factor for such an agency. Therefore, the ideal candidate for creating the martech agency will be the martech stack builder itself.
The question of course is why would a platform provider get into the agency business? The simple answer is the market size and opportunity. Martech has thousands of companies providing point solutions, making the space hyper-competitive. There will only be a handful of winners. The tools and solutions market will probably be $10 billion dollars. In contrast, the outcomes market is 10 times larger — $100 billion dollars. (This number comes from assuming a third of the adtech budgets can potentially shift to martech.)
Smart martech platform providers will realise this opportunity and work to grow their customer success teams into a full-fledged agency. Instead of just promising KPIs, they will agree to be compensated on performance. No one knows the power of the platforms better than the ones who have created it, so they are best positioned to also deliver the results in the most efficient manner. (This is different from adtech where Google and Facebook work like black boxes, and there is a level playing field for all adtech agencies who need to build their solutions on top.)
It will be each easier for a tech entity to recruit creative talent, than for a creative agency to attract tech talent. The martech agencies of the future will thus emerge from the martech platform makers, and hence the term “progency” – product-led agency.