The 7½ Futures of Martech Companies

Published April 21, 2024

The Shift

Since I started this blog four years ago, I have written [check] 90+ essays on new ideas in marketing. The initial essays were on Velvet Rope Marketing, then I wrote about Email 2.0 and Loyalty 2.0, and the past year I have gone deeper into what I consider Martech 2.0. As my ideas have evolved, I have shared my thoughts, learning along the way. I have followed my own advice of open-sourcing ideas: “I find too many entrepreneurs now are very cagey about sharing their ideas. What they don’t realise is that someone somewhere is likely to have the same idea anyway. The idea is just the starting point. It is a key that opens a door. After that, it’s all about the way one executes and creates the new world. And in execution, a million things have to go right for eventual success. So, to build a proficorn, start by sharing ideas – every person you meet and discuss it with will add value and make the idea better. Open your mind, open-source your idea and learn from the wisdom of others.”

In the same vein, in this series, I want to look ahead to what the future holds for martech companies (like Netcore). Some recent essays (Netcore Progency, Nucore, and MarCo) discussed some ideas. In this essay, I will try and look at all the possibilities. The title is inspired by a book I had come across, “The 7 ½ Deaths of Evelyn Hardcastle.”

The good news about martech is that it will never go away. Every business needs to sell what it makes, and marketing is the core (along with innovation). Marketing has, of course, changed through the decades, and continues to evolve. Digital marketing is now central to every business strategy. Adtech has grown to a $500 billion industry as it helps businesses acquire (and reacquire) customers. Even though martech has grown and is probably about a tenth of the size of adtech, I believe the future will be a more equitable balance in spending. This will mean a big shift in budgets and exponential growth in martech spending. An array of tech breakthroughs will make this happen. One of the biggest opportunities in software is therefore the engineering of a $250 billion shift from AdWaste (wrong acquisition and reacquisition).

Martech should always have been the primary focus of digital marketing. But in the past two decades, with the ease of spending on adtech, it has been reduced to a bit player. The obsession with growth has fuelled spending on acquisition rather than retention. This has resulted in a massive transfer of value from brands (the actual sellers) to the intermediaries (ad sellers, cloud sellers, and marketplaces). Brands have lost control of data, relationships and their customers. They have even become dependent on the adtech platforms to reconnect with their own customers because they are unable to get across to them. Fortunately, help is at hand. The change has to be driven by martech companies. The “How” is the focus of this series.

Three Years Ago

In my first essay about Martech 2.0 written almost three years ago, I wrote:

Seduced by the ease of spending on Google and Facebook, and the excitement of continuously acquiring new customers, they missed deepening relationships with existing customers. It is not just marketers but even CEOs who are at fault. The question that gets asked is: how many new customers did we acquire? There is little discussion about retention and revenue expansion from existing customers. (This is true for B2C and B2B brands.) In a competitive market, the focus shifts to landgrab and leads to an arms race of spending investor money or retained profits to show perpetual growth of website traffic or app installs. The rise of ad revenues of Google and Facebook testify to the marketers’ folly.

By not building deep relationships with existing customers and by bombarding them with irrelevant messages, marketers have trained their customers to ignore their communications, thus reducing the efficacy of the only method of bringing existing customers back to their website or app for transactions. Once customers start ignoring the messages, the marketer has little or no choice but to spend 10X more on re-acquiring that same customer via the tech giants. With everyone doing the same, the only winners are the attention sellers (Google and Facebook), who in turn create even more powerful data hoses by giving consumers even more free utilities. The irony is that as marketers did not pay attention to their customer needs, they are paying even more dearly to the attention intermediaries to reach their own ex-customers.

This has been the big blunder that marketers made: they did not value the attention of their customers. Instead of building a hotline, they cut the line. Now, the digital people are fighting back. They want their privacy. This is forcing the tech giants and device makers to act, and changing the rules of marketing as we know it. It is also creating a chance for marketers to correct their past mistake of ignoring their existing customers. Marketing is thus getting disrupted and marketers have an opportunity to simplify it.

… Marketing needs to return to its roots. The Best-Rest-Next framework with a reprioritisation of budgetary allocations is the right response to the disruption that awaits marketers. Focus on the customers rather than cookies, collect data rather than device identifiers, reward attention and not just the transaction – this is the way forward for marketers.

The digital advertising and marketing industries needed a jolt – and it has got it. It is time to ride the disruption, change the focus, go back to the basics, eliminate complexity and waste, put the customer at the centre, marginalise intermediaries like Google and Facebook, and create a new beautiful world of direct brand-customer relationships. It is time to simplify marketing, go direct, and delight customers. The starting point is straightforward: create two new teams for Best and Rest customers, and fund them with a third of the acquisition budget. Else, the only two profipoly companies will be Google and Facebook. It is a choice every CEO and marketer has to make.

As it turns out, little has changed since I wrote this – except Facebook renaming itself as Meta!

Words, but No Action

I have written many essays since then…

…but not much has changed. Adtech continues to go from strength to strength. Martech is still seen as a poor cousin. Spending ratios have not changed must. This meme that I have relabelled captures the story well.

The onus is squarely on martech companies to educate marketers and business owners, and provide new solutions and business models. All they and their customers have to do is to look at the balance sheets of the big adtech players to see where the profits are!

Here are the future possibilities that I see for B2C-focused martech companies:

Specialised Point Solutions
Full Stack (including CPaaS and Channels)
Progency
Email 2.0 (creating and controlling a channel)
MarCo (martech consolidator)
Digital Twins
Mirror Worlds
B2C Attention Platforms (the ½ idea)

Let’s discuss each of these.

Specialised Point Solutions

In the evolving martech landscape, Specialised Point Solutions (or Best-of-Breed, as they are also termed) represent a significant trend, offering narrowly focused tools or services designed to tackle specific marketing challenges with unparalleled efficiency and effectiveness. These solutions stand in contrast to broad, all-encompassing platforms, excelling in distinct areas such as Email Marketing, Marketing Automation, Customer Data Platforms, Analytics, and Search. Their main advantage lies in the depth of functionality and customisation options they provide, allowing businesses to closely tailor the tool’s capabilities to their unique needs and objectives.

For example, a specialised email marketing tool might feature advanced segmentation, personalisation, and automation capabilities that surpass what more generalised marketing platforms offer. This specialisation enables marketers to conduct highly targeted campaigns, which can lead to improved engagement rates and a higher return on investment (ROI). Additionally, these specialised solutions often boast seamless integration with other tools and platforms, enhancing the flexibility and scalability of marketing technology stacks. As businesses grow and their marketing needs become more intricate, the ability to incorporate advanced specialised solutions is crucial for maintaining a competitive edge and adapting to the dynamic market environment.

However, as specialised martech companies focus on solving singular problems within the customer journey, the challenge intensifies due to the encroachment of competitors into each other’s territories to expand their addressable markets. This industry trend is steering brands towards the adoption of full-stack solutions or marketing clouds, which offer a more integrated approach to handling diverse marketing functions.

Despite this shift, there remains a significant opportunity for martech companies to excel by providing best-in-class solutions that address specific marketing challenges. The complexity of marketing technology stacks continues to grow, creating a demand for specialised tools that excel in one or two areas, such as optimising landing pages, personalising emails, analysing customer journeys, or offering loyalty and referral programs.

The advantages of specialised solutions include ease of implementation into existing stacks, minimal customisation requirements, and rapid time-to-value. These tools are also generally more affordable than comprehensive end-to-end platforms. By excelling in their niche, specialised solutions can capture significant market share before potentially expanding into adjacent capabilities. However, the risk remains that the niche could become too small or be commoditised by larger players.

My take: Specialised Point Solutions will work best for large enterprises who can have internal teams to stitch the various software components together. For martech vendors, starting with a point solution is good, but they will need to add functionality quickly and move towards a full stack solution for sustained success.

Full Stack Solutions

Full Stack solutions (or Marketing Clouds) in the martech sphere represent a holistic approach to managing a brand’s digital marketing efforts. These platforms offer an integrated suite of technologies and services that encompass the entire marketing spectrum, from data management and analytics to content creation, campaign execution, and multi-channel customer engagement. By consolidating various marketing functions into a single, unified platform, Full Stack solutions aim to provide businesses with a comprehensive toolkit that streamlines operations, enhances customer experiences, and drives more effective marketing outcomes.

A core feature of Full Stack platforms is their ability to offer a seamless integration of diverse marketing functions, thereby enabling a unified view of the customer journey. This integration facilitates streamlined workflows and consistent messaging across multiple channels, significantly improving operational efficiency. For businesses, this means the ability to track and engage with customers from the initial point of contact, through the purchasing process, and into post-sale support, fostering deeper customer relationships and loyalty.

The incorporation of Communication Platform as a Service (CPaaS) capabilities within Full Stack solutions further enriches these platforms, allowing businesses to engage with customers through various communication mediums such as email, SMS, push notifications, WhatsApp, and RCS, all within the same platform. This level of integration and functionality simplifies the marketing technology landscape for companies, reducing the need to manage multiple, disparate point solutions and the complexities that come with them. Consequently, businesses can avoid data silos and achieve a more cohesive and data-driven marketing strategy, saving time and resources in the process.

The challenge for Full Stack providers is to maintain high-quality capabilities across all areas of the platform, matching or surpassing the performance of specialised best-of-breed tools. This necessitates substantial investment in research and development (R&D) and carries the risk of some features not being as advanced as those offered by specialised providers.

Despite these challenges, the advantages of Full Stack platforms are significant. They provide convenience by consolidating all marketing activities within a single platform, enable data-driven insights through the integration of customer data, and offer scalability to accommodate business growth and evolving marketing requirements. They simplify the process of data integration across multiple point solutions. A unified data store also enables AI to work its magic much better. However, the complexity and cost associated with implementing and maintaining such comprehensive solutions can be considerable, making them potentially less suitable for smaller businesses without the necessary resources and expertise.

My take: Full Stack, (or Unistack, as I have termed it), represents a very important future of martech. These stacks will integrate the communications channels (CPaaS) through native capabilities or strategic partnerships. The Full Stack is particularly appealing to small and mid-market buyers seeking comprehensive solutions. For martech vendors, the challenge is how to navigate and win the highly competitive zero-sum “Battle of Stacks.”

Progency

The third future for martech companies is a change in business model with the idea of a “progency” (product-led agency). A progency represents a transformative model in the martech space, blending the capabilities of martech products with the personalised touch of agency services to drive profitability for brands.

The progency model, rooted in the concept of “profipoly” or profits monopoly, aims to shift the focus from mere customer acquisition to maximising the lifetime value of existing customers, thereby addressing the inefficiencies in current marketing spends that often prioritise new customer acquisition at the expense of nurturing existing relationships.

It is about creating a partnership model, combining platform and people, with pricing linked to performance. The progeny thus has ‘skin in the game’ – and is aligned to help brands in their quest for profitable growth. Akin to the success-based models prevalent in adtech, this structure not only ensures a deeper alignment with the brand’s objectives but also positions the progency as a critical ally in the brand’s growth, emphasising outcome over output.

The progency model is distinguished by its unique blend of technology and service, offering a one-stop solution that covers the entire marketing lifecycle under one umbrella. This approach is particularly appealing to brands that seek to navigate the complexities of digital marketing without the hassle of managing multiple point solutions or vendors. The progency’s ownership of the martech platform allows for an unparalleled understanding and utilisation of the technology, ensuring that strategies are not only innovative but also deeply integrated with the brand’s marketing ecosystem.

Furthermore, the progency model addresses a significant gap in the martech landscape by focusing on the “leftovers” or the neglected segments of customers who are not actively engaged or retained – and who marketers spend money by reacquiring via adtech platforms. By targeting these segments, progencies open new avenues for revenue generation, turning potential liabilities into assets. This is achieved through a variety of techniques including personalised engagement strategies, targeted content, and incentives that rekindle interest and drive conversions.

The progency model also introduces a new paradigm in measuring marketing success through the EnCoRe Triad – Engagement, Conversion, Retention – providing clear, actionable metrics that align closely with a brand’s profitability goals. This focus on tangible outcomes ensures that every initiative and strategy employed by the progency is designed to move the needle on these critical metrics, providing a transparent and accountable framework for assessing performance.

In essence, the progency model represents a significant evolution in the martech domain, promising a future where marketing technology and services are seamlessly integrated to deliver exponential, sustainable growth. By combining the scalability and efficiency of SaaS with the customisation and expertise of agency services, the progency model can redefine martech, making it more efficient, effective, and aligned with the ultimate goal of driving profit and value for brands.

[See Progency: The Profipoly Pathway. Here is what I had written: “[The] six facets – martech entity ownership, the parallel existence of the ‘profipoly stack’, targeting the ‘blue ocean’ of overlooked customers, innovative performance metrics, outcome-based compensation, and boundless earning potential – position the progency as an indispensable and integral partner for brands. By bridging the martech execution chasm and paving the way for enduring profitability, the progency is poised to be the spark that promises to ignite marketing’s profipoly wave. Also see Profishare: A New Business Model for Enterprise Software, Solving Marketing’s Three Zeros Problems via Progency, and ELF: eCommerce Lifecycle Franchisee.]

My take: Progency is an idea whose time has come. It enables martech companies to rise above the “battle of stacks”. The progency model can be thought of as a “blue ocean in the red ocean” – an uncontested marketspace in an otherwise highly competitive, zero-sum landscape.

Email 2.0

The next set of ideas that I will cover are very different from focusing only on software. The first of these ideas (fourth in our futures) is Email 2.0. This is about creating and controlling a new channel – like Meta has done with WhatsApp. Martech needs a cost-effective mechanism to enable brands to build hotlines with existing customers to reduce them becoming inactive and churning out. Email 2.0 can be that channel. (While WhatsApp can also offer a hotline, its cost is prohibitive for brands seeking to engage with large customer bases – a typical WhatsApp business message costs 80 times that of an email. In other words, for the cost of sending 5 WhatsApp messages, a brand can send email daily for a year!)

Email 2.0 seeks to address the challenges posed by the dominance of search and social platforms like Google and Meta, which have become indispensable for customer acquisition but contribute to a vicious cycle of increasing marketing expenses and diminishing profitability for brands. Email 2.0, leveraging Google’s AMP technology, introduces interactivity within emails, transforming them into dynamic, engaging platforms capable of in-channel engagement and conversion, thus revitalising the email channel’s effectiveness and efficiency.

The innovation of Email 2.0 lies in its ability to make emails more than just a communication tool; it turns them into a rich, interactive experience where transactions can occur directly within the inbox, eliminating the need for redirecting users to external landing pages. This not only enhances user engagement but also significantly streamlines the conversion process, offering a seamless path from discovery to purchase within the familiar environment of the email inbox.

Email 2.0 encompasses several key attributes that collectively redefine the email experience. Interactivity through AMP allows for app-like functionalities within emails, facilitating direct actions like purchases and bookings. Atomic Rewards introduce gamification, incentivising engagement through micro-incentives for specific actions. Dynamic Engaging Footers and Action Ads transform the traditionally static parts of emails into interactive and monetisable elements, while the concept of Microns promotes the delivery of consistent, valuable content, turning emails into a daily habit for consumers.

For consumers, Email 2.0 promises an enhanced user experience with personalised, relevant content delivered in an engaging and rewarding format. For marketers, it offers a path to higher engagement and conversion rates, driven by data insights and personalised content strategies. It also opens new avenues for monetisation and building brand loyalty through innovative features like in-email transactions and interactive ads.

Email 2.0 addresses the critical challenges of high customer acquisition costs (CAC) and low customer lifetime value (CLV) by focusing on maximising the value of existing customers rather than relentless new customer acquisition. By solving the three profit-killers—marketing waste, funnel frictions, and poor data—Email 2.0 sets the stage for a virtuous cycle of increasing CLV and decreasing CAC, driving brands toward sustainable, profitable growth, or “profipoly.”

In summary, Email 2.0 represents a significant evolution in martech, positioning it as a formidable answer to adtech’s dominance in search and social. By harnessing the power of email innovation, martech companies can unlock a powerful channel that not only recaptures consumer attention but also drives multi-faceted monetisation strategies, making Email 2.0 a cornerstone in the future of digital marketing.

My take: Imagine being able to control a channel which is the hotline to billions of consumers – this is the leap martech companies can make to move beyond the red ocean of stacks. In fact, Email 2.0 brings much of what a martech stack can do to the inbox! Email 2.0 cannot be created by a single brand; it has to be built by a martech company. The foundational technologies are there. It needs a company with vision and will to build it out. The risks are high, but so are the rewards.

MarCo

The fifth future for martech companies lies in the concept of MarCo, or Martech Consolidator, inspired by the successful model of Constellation Software. [See Wanted: A Constellation Software for Martech.] This approach envisions a super-aggregator in the martech space, acquiring and managing a portfolio of martech companies to drive innovation, efficiency, and scalability. With over 11,000 martech companies identified in Scott Brinker’s 2023 Martech Map, the industry is ripe for consolidation, especially given the slowing investment and the economic pressures facing many unprofitable martech entities.

MarCo aims to replicate Constellation Software’s strategy of focused acquisitions and decentralised management, targeting both exceptional and good businesses within the martech realm. This model is predicated on acquiring industry-specific software businesses that provide specialised, mission-critical solutions, characterised by consistent earnings, growth, and experienced management. The essence of MarCo’s strategy lies in its ability to maintain the entrepreneurial spirit and operational independence of acquired companies while leveraging the resources and stability of a larger parent entity.

The potential for MarCo in the martech space is particularly compelling given the unique challenges and opportunities the sector faces. Many martech companies are struggling with high customer acquisition costs and low customer lifetime value, leading to a situation where profitability is elusive. Furthermore, the digital marketing landscape is cluttered with AdWaste, with businesses spending significantly on acquisition and reacquisition through adtech platforms, often at the expense of profitability. MarCo, by broadening the definition of martech to include efforts to reduce AdWaste, positions itself as a solution that not only consolidates the fragmented martech landscape but also redirects focus towards maximising the lifetime value of existing customers.

The envisioned MarCo model involves partnering with an anchor martech company, such as Netcore, to leverage its existing customer base, technological infrastructure, and industry expertise. This partnership is crucial for operationalising the acquired entities and ensuring their seamless integration into the broader martech ecosystem. The model envisions a fund structure where investments are pooled to facilitate acquisitions, with the anchor martech company playing a pivotal role in the operational management of acquired businesses. This approach not only mitigates the risks associated with running the businesses but also aligns incentives between the fund investors and the anchor martech vendor.

The creation of MarCo represents a strategic shift in the martech industry towards consolidation, efficiency, and growth. By adopting a model that has proven successful in other software sectors, MarCo has the potential to transform the competitive dynamics of the martech space, fostering a more integrated, innovative, and customer-centric approach to digital marketing. This consolidation effort could lead to the creation of a more unified martech stack, reducing the complexity and inefficiencies that currently plague the industry, and ultimately driving sustainable, profitable growth for martech companies and their clients alike. In essence, MarCo embodies a future where martech companies can transcend the limitations of the current market, unlocking new levels of value creation and strategic advantage in the digital age.

My take: The establishment of a MarCo fund, coupled with an operating company framework, presents a way forward for the martech sector. This model facilitates the amalgamation of niche, specialised point solutions, accelerating the development of comprehensive full-stack solutions. Historical precedents across various industries underscore the efficacy of roll-ups; it’s time for martech to embrace this transformative approach for its next phase of evolution.

Digital Twins

The sixth future envisions a company that can ‘sell’ digital twins. While I have written about digital twins in marketing earlier, there is an opportunity for a martech company to create and market digital twins to help brands predict consumer behaviour. By harnessing the power of digital twins, martech firms can lead the charge towards a more efficient, effective, and customer-centric future in eCommerce.

Digital twins, as software models of real-world systems, offer several benefits for marketing:

Customer Behaviour Modelling: Digital twins can model customer behaviours using demographics, purchase histories, social media interactions, and more, allowing marketers to simulate various strategies or campaigns and refine their strategies based on potential customer responses.
Customer Profiling: Digital twins provide personalised depictions of individual customers by amalgamating their demographic, psychographic, and behavioural data. This enables brands to tailor predictions for the next best action for each customer, offering personalised recommendations and services that enhance the customer experience and increase conversion rates.
Retail and E-commerce Applications: In retail and e-commerce, digital twins can model customer behaviour, optimise store layouts, improve supply chain management, and enhance the overall customer experience. They enable the creation of 3D virtual stores for design and planning, integrate 3D assets into e-commerce sites, and create virtual showrooms, thereby increasing conversion rates and making purchase decisions more accurate.

To build digital twins, martech companies can create a foundational “Large Customer Model” (LCM). The concept of LCMs can emerge as a transformative tool, akin to the impact of Large Language Models (LLMs) in text prediction. LCMs leverage the predictive power of data analytics to forecast the next steps in a customer’s journey, creating a paradigm shift in personalised marketing. Unlike LLMs, which predict text sequences, LCMs delve into the intricate tapestry of customer behaviour, analysing a vast array of interactions and external factors to anticipate future actions. This innovative approach enables marketers to tailor experiences with unprecedented precision, enhancing customer engagement and loyalty. As LCMs continuously learn and adapt from real-time data, they offer dynamic insights that allow for proactive strategy adjustments, ensuring each customer interaction is more relevant and impactful. Integrating LCMs into martech platforms promises a future where marketing is not just reactive but predictively personalised, paving the way for brands to achieve sustainable growth and a competitive edge in the digital marketplace. [See iDarpan: How Mirror Worlds and Digital Twins will Revolutionise eCommerce.]

Unlearn.ai utilises digital twins to enhance clinical trials by creating comprehensive forecasts of patient health. Their AI models, trained on extensive historical patient data, generate digital twins from participants’ baseline data. These twins predict potential outcomes in control groups, regardless of actual trial assignment. This approach, known as TwinRCTs, allows for highly powered trials with smaller control groups, improving trial efficiency and decision-making while adhering to regulatory guidance.

A martech company can leverage the concept of digital twins, akin to Unlearn.ai’s approach in clinical trials, to revolutionise marketing strategies and customer engagement. By creating digital replicas of consumers based on their behaviour, preferences, and interactions, the company can simulate and predict future consumer actions. This enables personalised marketing, efficient resource allocation, and enhanced customer experiences, opening up new revenue streams through tailored services and innovative product offerings.

My take: Digital twins herald a new era in marketing, aligning closely with Generative AI advancements. By developing a Large Customer Model, martech companies can harness detailed data profiles, integrating them with customer journey workflows to craft predictive software agents. This innovative approach enhances campaign responsiveness and refines product-to-customer matching, substantially boosting Customer Lifetime Value (CLV) and propelling marketing strategies into a future where personalisation and predictive analytics converge to redefine engagement, conversion, and retention.

Mirror Worlds

The next – and seventh – idea for martech companies builds on the foundation of digital twins. Think of it as “Mirror Worlds”, where digital twins can all come together into a virtual world and marketers can get aggregate insights into how campaigns and products will perform. While digital twins work at the level of a single entity, Mirror Worlds work at the larger level. Think of digital twins as software agents and mirror worlds as the replica of a store or real world marketplace which enable marketers to better envision the impact of their activities in a competitive environment. In these parallel digital universes, every interaction, preference, and behaviour of consumer avatars can be monitored and analysed to predict the outcomes of marketing campaigns, product launches, and other strategic initiatives.

For martech companies, this means a shift towards more dynamic, predictive, and personalised marketing strategies. By simulating real-world scenarios in a controlled digital environment, marketers can foresee how different variables might impact consumer behaviour and overall market dynamics. This could range from introducing a new product to changing a pricing strategy, allowing companies to refine their approaches before deploying them in the real world.

Furthermore, Mirror Worlds offer a unique advantage in terms of customer engagement and experience. In these virtual spaces, consumers can interact with products and brands in highly immersive ways, providing invaluable insights into their preferences and decision-making processes. This level of engagement not only enriches the customer journey but also fosters deeper brand loyalty and advocacy. All of this can be at a fraction of the cost and time that a new product or campaign launch in the real workd.

For martech companies looking to harness the power of Mirror Worlds, the key lies in the integration of advanced technologies like AI, machine learning, and data analytics. By leveraging these tools, digital twins within Mirror Worlds can be continuously updated and optimised to reflect the most current and comprehensive view of each consumer. This not only enhances the accuracy of predictive models but also ensures that marketing strategies remain aligned with evolving consumer trends and behaviours.

A good summary of this idea is from my essay, iDarpan: How Mirror Worlds and Digital Twins will Revolutionise eCommerce: “This is a digital rendering of the physical world, embodying a virtual landscape where millions of customers interact with brands. It symbolises a virtual reflection of our eCommerce business ecosystem, where every customer is unique and is represented by a digital entity with its own needs, preferences, and behavioural patterns. This dynamic setting allows customers, represented by their digital twins, to engage with a brand’s products or services, building a thriving, interactive space… [It is] an immersive arena where brands and digital twins of customers co-exist and interact. These interactions illuminate customer behaviour, preferences, and purchasing patterns, arming brands with the knowledge to refine marketing strategies, enhance product offerings, and personalise services. The multitude of data emanating from interactions in the Metaverse is processed using Generative AI. This AI model identifies patterns, deduces inferences, and forecasts based on the data. It helps predict the customers’ next move, simulate diverse scenarios, and provide a test bed for marketers to assess varying strategies.”

My take: Mirror Worlds mark an evolutionary leap from Digital Twins, presenting a realm where marketers can simulate and refine every aspect of the consumer experience, from store layouts and digital interfaces to campaign strategies and product offerings. This integration of deep data insights and Generative AI not only enhances predictive accuracy but also paves the way for hyper-personalised marketing. By addressing core challenges like AdWaste and funnel inefficiencies, martech companies are poised to significantly boost profitability, turning theoretical marketing innovations into practical, outcome-driven solutions.

B2C Attention Platforms

If we reframe our discussion for martech companies around how they can tap into the $250 billion AdWaste opportunity, then it becomes quite clear that the addition of a B2C attention platform can be a very powerful opportunity and create a moat for their business. This is the ½ idea because it is not strictly in the domain of what martech companies do.

I discussed this idea in a previous essay, An Email 2.0 Newsletter for All. I wrote, “The key to making Email 2.0 as the next new channel for marketers for their customer engagement messaging is by bringing attention to the email inbox with a service which becomes part of our lives. What is needed is an Email 2.0 newsletter which we all want to subscribe to – and read as a daily habit. This is the mountain which needs to be climbed to make Email 2.0 a commercial success. WhatsApp grew thanks to its easy personal and group messaging capabilities on the mobile, which started replacing the clunky SMS which never grew up. Email 2.0 needs a “killer app” – something which gives us a reason to open our inboxes, and then share with our network… The Email 2.0 newsletter is built on the foundation of three key ideas: the interactivity AMP brings in, the incentives and gamification that Atomic Rewards enables, and the ease of content creation and personalisation that Gen AI can power. These together are the pillars of creating a new type of daily email service delivered to the inbox, garnering attention, and demonstrating to marketers (as consumers of such a service) the infinite possibilities of what Email 2.0 can do for their brands.”

What powered the growth of Google and Meta were their consumer-facing platforms. Search for Google, followed by YouTube, Gmail, Maps, and many other services which are free to consume and provide Google the proprietary attention platforms to serve targeted ads. Meta has done similar with Facebook, Instagram, and WhatsApp (where monetisation has just begun in the form of businesses paying to connect with their customers). Martech needs a similar platform. This is where an Email 2.0 newsletter comes in. A martech company planning to offer services on Email 2.0 would do well to build its own B2C service.

This approach involves creating an engaging, consumer-facing platform that delivers valuable content directly to users, while simultaneously serving as a vehicle for targeted ads. By offering a rich, interactive email experience that goes beyond traditional marketing messages, these newsletters can captivate user attention and foster loyalty. This initiative not only enhances user engagement through personalised and dynamic content but also provides martech companies with a wealth of user data. This data is instrumental in refining marketing strategies, improving ad targeting, and ultimately driving more effective campaigns. Furthermore, by establishing a proprietary channel, martech companies can gain a competitive edge, like how Google’s and Meta’s platforms have become integral to their advertising ecosystems. This strategic move could redefine the landscape of email marketing, turning the humble email into a powerful, interactive tool that benefits both consumers and marketers alike.

My take: For a martech company venturing into Email 2.0, launching a B2C newsletter as an Attention Platform could be a strategic move to demonstrate the capabilities of advanced email technologies. While not a conventional approach for a B2B entity – thus the ½ idea – this initiative could significantly influence the industry, akin to the tail wagging the dog. It serves as a tangible showcase of the potential that next-generation email holds, setting a precedent for attention and monetisation in digital marketing.

Looking Ahead

This series has traversed a landscape of possibilities for the future of martech, ranging from specialised point solutions to consolidated stacks, and then considered a variety of innovative ideas like Progency, Email 2.0, MarCo, Digital Twins, Mirror Worlds, and B2C Attention Platforms. While each approach carries its own merits and demerits, a key insight permeating these potential futures is the need to address a systemic issue plaguing digital marketing — the $250 billion AdWaste blind spot that fuels the meteoric rise and power of adtech intermediaries.

Martech companies remain trapped in an endless battle of features and stacks, iterating on technological capabilities while struggling to demonstrate sustainable profitable growth to brands, especially in comparison to the runaway success of adtech. This false dichotomy between technology and profitability has blinkered the strategic vision of martech entities, preventing them from harnessing their full transformative potential. Tech innovation for its own sake rings hollow if it fails to deliver tangible business outcomes.

The 7½ futures envisioned promise a profoundly different reality. By recasting martech as the linchpin for maximising customer lifetime value and minimising bloated acquisition expenses, they pave the path to explosive profitable growth. Alignment with value generation makes martech indispensable, not a ‘nice to have’ discretionary line item. Building deeper, mutually beneficial relationships grounded in trust and transparency similarly counters the infringement of privacy and loss of control associated with adtech dependence.

For trailblazing martech companies, the next frontier lies in crafted fusion of technology and business strategy, aligning innovation with profitability. Harnessing data and predictive analytics promise personalisation at scale, while leveraging owned attention platforms and channels circumvents gatekeepers. New pricing models ensure incentives match outcomes. By cementing martech as the lever for sustainable growth and directly addressing the dollars flowing into adtech, visionary vendors can reshape the marketing landscape.

This demands relentless focus on the North Star metric of profitable growth, a willingness to depart from trodden ground, and maintaining an expanded view of the ecosystem linking customers, products, and channels. Companies clinging to past assumptions risk extinction in an AI-driven landscape which rewards creative strategy. The time for martech entities to step into leadership roles and spearhead the profession’s next evolution is now. The futures mapped out in this series aim to spark a thoughtful debate on the paths which promise outsized rewards. Fundamentally, they underline the urgent need for martech players to set their sights beyond myopic technological advancement and position themselves at the vanguard in leading brands on the Profipoly Quest. The decisions they make today will decide their destiny for years to come; the bolder their vision, the higher they will soar.

Critique

I asked ChatGPT and Claude for a critique of the essay.

ChatGPT

The essay presents a wide array of innovative ideas for martech companies, ranging from specialized point solutions to more holistic approaches like full-stack solutions and digital twins. The concepts of Progency and Email 2.0, in particular, offer compelling new business models that could redefine customer engagement and marketing efficiency. However, the viability of these ideas depends on their practical implementation, the technological infrastructure available, and market readiness for such transformative changes.

The concept of MarCo, inspired by Constellation Software, suggests an interesting consolidation strategy in the fragmented martech landscape but might face challenges due to the diverse nature and rapid innovation within the sector. Similarly, the adoption of digital twins and mirror worlds in marketing is an intriguing proposition that leverages cutting-edge technology for predictive modeling and immersive customer experiences, yet it requires significant investment in data analytics and AI capabilities.

The notion of a B2C Attention Platform as a half idea, leveraging Email 2.0, could indeed create a new engagement channel but might necessitate a shift in consumer email habits and perceptions, which could be a significant hurdle.

Overall, while the futures outlined are visionary and potentially game-changing, their success will likely hinge on the evolving digital ecosystem, regulatory environments, and the continuous evolution of consumer behavior and expectations. For more detailed insights and examples, exploring case studies of early adopters or pilot programs could provide a clearer picture of these ideas’ practical implications and success factors.

Claude

Specialised Point Solutions: This is a pragmatic approach for martech companies to gain an initial foothold and validation. However, the risk of commoditization and encroachment from bigger players is real unless they rapidly expand capabilities. Best suited for custom solutions targeting niche enterprise needs.

Full Stack Platforms: Powerful end-to-end solutions that drive integration and consolidation. However, very capital intensive to build and support. Potential overkill for smaller customers. Partnerships can help mitigate development costs. Market dynamics dictate this will be an important battleground.

Progency Model: A highly disruptive and differentiated approach that aligns incentives around profitability. Win-win potential for both brands and martech partners. However, ability to scale while maintaining high-touch services needs to be proven. Depends significantly on caliber of people.

Email 2.0: Tremendous potential to reinvigorate email channel and tackle adtech dominance. But adoption hurdles given entrenchment of existing email platforms. Would require major coordinated efforts across tech and marketing ecosystem. Feasible but challenging.

MarCo: Consolidation is an imperative and this presents a model tailored for martech. Ability to blend portfolio strengths and centralize back-end. However, navigating disparate product cultures a challenge. Anchor company partnership critical. Fund structuring complex but can accelerate growth.

Digital Twins & Mirror Worlds: Cutting-edge with ability to simulate strategies and boost predictive marketing. Technologically intensive with significant data and AI/ML requirements. Adoption may be gradual but over time could be transformative, unlocking new levels of personalization and customer value.

B2C Attention Platforms: Powerful customer acquisition and data potential. However risks brand dilution unless tightly integrated under a common identity umbrella. Operationally intensive but allows wider monetization. Strategic intent must be crystal clear.

In summary, a mix of evolutionary and revolutionary ideas, but all addressing genuine gaps or opportunities. The bolder concepts carry bigger risks but also outsized upside if executed meticulously. Significant potential to transform martech into the driver’s seat steering brands firmly toward Profipoly.

The 7½ Futures of Martech Companies

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Rajesh Jain

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