NeoMartech: Shaping the Big Martech Era

Published December 11-17, 2024

1

Foundations

In my previous essay, I had discussed the need to create Big Martech to combat the $350 billion AdWaste from wrong acquisition and reacquisition that is hurting brands. I asked ChatGPT and Claude to summarise the key points:

  1. The Big Martech Revolution: The marketing landscape is undergoing a fundamental transformation from Big Adtech to Big Martech, marking a shift from acquisition-obsessed strategies to retention-focused approaches. With nearly $350 billion wasted annually on ineffective advertising, this revolution promises to redirect resources toward building sustainable customer relationships through advanced AI and personalisation.
  2. Anti-Acquisition and Profipolies: The emergence of “Anti-Acquisition” strategies represents a deliberate pivot from traditional marketing models. By focusing on retention and minimising acquisition costs, companies can build “profipolies” – profit monopolies achieved through superior customer understanding and engagement. The winning formula combines low Customer Acquisition Cost (CAC) with high Lifetime Value (LTV), powered by AI-driven personalisation.
  3. Technology and Implementation Framework: Big Martech solves three critical challenges: the “Not for Me” problem of insufficient customer data, the “No Hotline” issue of attention recession, and the “Not by Product alone” limitation of current platforms. Through AI, machine learning, and unified marketing ecosystems, it enables hyper-personalised customer experiences across all touchpoints.
  4. Transformation of Marketing Leadership: This revolution elevates marketing from a cost centre to a profit driver, transforming CMOs into potential Chief Profit Officers. Companies must choose between leading this change or risking obsolescence, much like how IBM successfully adapted to multiple tech revolutions while others like Kodak failed to evolve.
  5. Future Impact and Opportunity: The Big Martech era promises to reshape customer engagement through direct, AI-driven personalisation at scale. By reclaiming billions lost to AdWaste, companies can establish deeper customer relationships and sustainable growth. This transformation presents opportunities for both incumbents and disruptors to redefine the marketing technology landscape, similar to how past tech revolutions created new industry leaders.

As I wrote: “This shift marks the dawn of Big Martech, an era where companies can establish direct, personalised connections with customers through AI-driven hyper-personalisation at scale. In this new world, the ability to engage with each customer on an individual level, or N=1, will become the gold standard. But the crucial question remains: who will emerge as the architects of this Big Martech revolution? The stakes could not be higher. Those who successfully lead this transformation stand to reclaim a staggering $350 billion currently lost to AdWaste, while simultaneously taking control of the future of marketing. The builders of Big Martech will not only redefine how businesses create and capture value, but they will also lay the groundwork for a new frontier in digital engagement and customer relationships.”

The stage is set for the emergence of “NeoMartech” companies – revolutionary players who will transcend traditional martech’s segments, campaigns, and journeys to engineer a new paradigm in marketing technology. These pioneers, whether incumbents or disruptors, will master the delicate balance of maximising LTV while minimising CAC, creating an unstoppable profits flywheel that ultimately leads to a “profipoly” (profits monopoly) for innovative brands.

The NeoMartech revolution will redirect the billions lost to AdWaste, fundamentally re-engineering retention, and dramatically reducing the need for constant new customer acquisition. By enhancing Earned Growth, these companies will unlock unprecedented value – not just for individual brands, but for the entire martech and consumer ecosystem. Winning, however, demands a departure from conventional business models that rely solely on Monthly Active User (MAU) pricing. Instead, NeoMartechs must evolve into true strategic partners for brands, embracing a comprehensive 4S framework: Strategy, Software (stack), Services, and profit Sharing. This integrated approach delivers the crucial fifth S: Solutions for sustainable success.

The question that beckons: How can NeoMartechs architect and accelerate the Big Martech era?

2

Past and Present

Let’s look at the current state of martech and retention, as written by Claude and ChatGPT (and lightly edited by me).

The evolution of B2C martech mirrors the transformation of digital consumer relationships, progressing from basic mass communication tools to sophisticated platforms powering personalised experiences. What began as simple email marketing in the 1990s with pioneers like ExactTarget (acquired by Salesforce), Neolane (acquired by Adobe), and Responsys (acquired by Oracle) has evolved into a complex ecosystem orchestrating omnichannel customer experiences.

The early 2000s marked the first major shift as integrated marketing platforms emerged. Adobe, Salesforce, and Oracle’s marketing clouds promised a unified view of customer interactions across channels. These platforms introduced marketing automation, enabling rules-based customer journeys and behaviour-triggered communications. The business model crystallised around software-as-a-service (SaaS), with pricing based on list size, message volume, or monthly active users (MAUs).

The 2010s ushered in the age of personalisation and automation. Companies like Netcore, Braze, and many others enabled real-time, tailored messaging across email, SMS, and in-app notifications. Companies like Optimizely pioneered A/B testing, while recommendation engines promised Amazon-like personalisation for all. However, these solutions often delivered incremental improvements rather than transformative results, excelling at campaigns but struggling with real-time, individual-level personalisation.

Several persistent limitations have challenged the industry. Data fragmentation across tools and channels remains a significant hurdle, compounded by privacy regulations like GDPR and CCPA. The reliance on acquisition-driven strategies has led to substantial “AdWaste” as digital advertising costs soar and consumer ad fatigue increases. Many platforms over-emphasised acquisition without addressing long-term customer retention, creating a costly cycle of continuous customer churn.

Notable successes in the B2C martech landscape include the consistent ROI of email marketing, efficiency gains from marketing automation, mobile push notifications driving app engagement, and improved conversion rates through basic personalisation.

However, significant misses plague the industry. The promise of “360-degree customer views” remains largely unfulfilled, with complex implementations often failing to deliver value. Marketing clouds struggle with poor integration between acquired tools, while cross-channel coordination remains elusive. The industry has been slow to adopt the full power of AI-driven predictive capabilities, creating a gap that modern tools are only beginning to address.

Today’s B2C martech faces unprecedented challenges: stringent privacy regulations, the deprecation of third-party cookies, and skyrocketing customer acquisition costs. Traditional approaches focused on segments and campaigns show their age, while business models based on MAUs or message volume increasingly misalign with customer success metrics.

The next generation of B2C martech must deliver true 1:1 personalisation at scale, powered by AI. Rather than just managing campaigns and channels, platforms must help brands build lasting, profitable customer relationships. This transformation demands a departure from conventional business models, embracing a comprehensive framework that delivers solutions for sustainable success.

3

Recent Writings

The 7½ Futures of Martech Companies: “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 $700 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 $350 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.”

I listed the future possibilities that I saw for B2C-focused martech companies:

  1. Specialised Point Solutions
  2. Full Stack (including CPaaS and Channels)
  3. Progency
  4. Email 2.0 (creating and controlling a channel)
  5. MarCo (martech consolidator)
  6. Digital Twins
  7. Mirror Worlds
  8. B2C Attention Platforms (the ½ idea)

Martech 3: Can the Price be Zero?: “[T]hink of Martech 3.0 (M3) – to distinguish from Martech 1.0 (point solutions) and Martech 2.0 (full stack). Both M1 and M2 are typically priced by martech vendors on MAUs (monthly active users). [Can] a new disruptive approach make for zero-priced martech with alternate revenue streams for SaaS sellers?… There are seven interlocking trends that can facilitate the rise of M3 – free B2C martech software with alternative monetisation models, which creates a win-win for both the buyer (marketing) and seller (martech vendor): focus on retention, shrinking marketing teams, rise of omnichannel, Progency, AI-powered digital twins, ads everywhere, data privacy and regulation…To bring M3 to life will require a bold martech platform provider. There are two revenue streams such a provider can tap into: transaction fees and ads…Done right, this could be a win-win for all the three entities involved: the brand marketing team for whom martech would now be as easy as adtech, the customer who will see much less waste and more rewarding messages, and the M3 vendor, who gets an opportunity to step away from the red ocean, zero-sum game of stacks and MAU/MRR into a blue ocean of uncontested marketspace.”

Martech’s 10+1 Foundations in the AI Age: “Here are the 10+1 foundations for martech companies in the Age of AI: Unistack, Unichannel, Large Customer Model, Digital Twins, Co-Marketer, Mirror World, Generative Journeys, Bundled Kaizen Services, Profishare, B2C Business/Platform, Profits… These foundations collectively enable martech companies to leverage AI effectively, drive continuous improvement, and maintain a competitive edge in the evolving digital landscape. Most importantly, they help their business customers multi-maximise every customer LTV (lifetime value). By focusing on these core elements, both martech companies and B2C businesses can ensure they are well-equipped to meet the demands of the AI era and deliver superior customer experiences.”

Retention Re-engineering: Random to Recurring Revenues: “Innovations [like Agentic AI and the Co-Marketer, Digital Twins for Segments and Individuals, AI-Powered Large Customer Models, Epps (Email Apps) and ActionAds, and Bundled Kaizen Services] will help marketers anticipate customer intent with N=1 hyper-personalisation and influence actions through effective engagement strategies. They will address the challenge of attention recession by establishing direct communication hotlines with customers, thereby maximising customer LTV and reducing AdWaste. The combined effect of increasing LTV and decreasing CAC will significantly enhance profitability. Marketers will finally be able to achieve their dream of converting sporadic, random purchases into predictable, recurring revenues. Digital twins for every customer will guide marketers on emerging interests and demands, while the Co-Marketer will craft custom content for persuasion at scale. Agentic AI will enable a “department of one” to cater to a “segment of one,” making hyper-personalised marketing and constantly adapting “generative journeys” a reality. This next-generation martech, combined with innovative email strategies and advanced services, will equip marketers with the tools to drastically reduce AdWaste and embark on a Profipoly Quest – achieving exponential forever profitable growth. This will mark the most significant shift in marketing since the advent of adtech. Retention marketing – retention re-engineering – will finally claim its rightful place at the forefront of marketing strategies.”

The Coming Age of Anti-Acquisition: “A seismic shift is about to reshape the landscape of marketing. For the past two decades, the relentless pursuit of new customer acquisition has dominated every marketer’s agenda, fueling the rise of digital-first brands and disrupting countless industries. However, this era of unchecked expansion is drawing to a close, heralding the dawn of what I call the “Age of Anti-Acquisition.” While “retention” might seem the natural successor, the term “anti-acquisition” more accurately captures the impending paradigm shift. It represents a direct challenge to the extreme and often destructive focus on acquisition, reacquisition, and even re-reacquisition that has, like a metastasizing cancer, eroded the health and profitability of businesses across sectors.”

4

2025 Martech Predictions

The SAS 2025 Martech predictions highlight a shift toward traditional AI applications, responsible marketing, a moderated hype around GenAI, and a renewed focus on campaign management. Predictions also include the adoption of composable CDPs, AI-driven co-creation with customers, GenAI-enhanced customer service, and skepticism around “zero copy data” for seamless insights. Excerpts: “Not long ago, brands were eager to move away from the talk of campaigns to focus on journeys. While marketing campaigns have evolved into customer journeys, the segmentation and audience-creation capabilities of traditional campaign management have been grossly overlooked. As many organizations make the move to a cloud data strategy, campaign management will be back in vogue in 2025…Composability, the latest customer data platform (CDP) trend, will radically reshape the CDP market in 2025. Composability is the ability to access and use data where it lives, such as in a cloud data warehouse, rather than requiring it be moved into a CDP database. Functionally, composability helps unbundle some nonfoundational capabilities of a CDP, such as data activation, and enables marketers to only use the capabilities they need. Forrester calls the composable data warehouse a top differentiator for a single customer view, while Gartner says data sharing with cloud data warehouses will be disruptive.”

Among Forrester’s predictions: “GenAI will push one in four CMOs to codify their marketing operations function. The hyped-up potential of genAI in creative development and marketing insights will be a catalyst in 2025 to force marketing ops’ evolution beyond a stopgap to mask poor planning, resource misalignment, and inefficient processes. To get there, marketing teams will need to proactively identify stakeholders, define process interlocks, formalize responsibilities, and measure success across six B2C marketing ops disciplines. In 2024, marketers focused on genAI as an efficiency play, but in 2025, mature marketing ops functions will add marketing effectiveness to their genAI playbook…Investment to unify data for the loyalty and marketing tech stacks will triple. Factors including economic pressure to increase efficiency and consumers’ demand for continuity across customer experiences will converge in 2025 — pushing loyalty and martech together. While eliminating redundant channel execution across marketing and loyalty is low-hanging fruit, the most impactful and pragmatic opportunity lies with synchronizing data. The data gap between marketing and loyalty practices is wide today: Eight in 10 US B2C marketing executives utilize separate data assets for loyalty and martech. 2025 calls for a unified data strategy that delivers consistent and expanded data access.”

For me, the defining trend for 2025 will be the importance of an anti-acquisition mindset in marketers leading to the rise of NeoMartechs.

5

Four Characteristics

There are 4 characteristics of a NeoMartech company: a core belief in “anti-acquisition” (more than just retention), the creation of 2-way customer hotlines via NeoMail, a fanatic desire for N=1 personalisation to solve the “Not for Me” problem, and solutioning via a 4S delivery and business model.

Core Belief in Anti-Acquisition: NeoMartech companies embody a fundamental shift from traditional marketing’s obsession with customer acquisition to a more sustainable model focused on retention and customer value maximisation. This goes beyond simple retention marketing –  it represents a complete philosophical pivot that views every acquisition dollar as a potential drain on customer value. At its heart is the recognition that nearly $350 billion is wasted annually on ineffective acquisition and reacquisition campaigns (AdWaste). NeoMartech companies help brands transform random, one-time transactions into predictable recurring revenue streams by prioritising the maximisation of LTV while minimising CAC. This approach aims to create “profipolies” – profit monopolies achieved through superior customer understanding and engagement, leading to sustainable profitable growth that starves competitors of oxygen by capturing the majority of industry profits.

See:

Creation of Two-Way Customer Hotlines via NeoMail: NeoMartech companies revolutionise customer communication by transforming traditional one-way push channels into dynamic, two-way engagement platforms. At the core of this transformation is NeoMail, built on five key pillars: AMP, Email Envelope, Atomic Rewards, Containers, and ActionAds. This innovation creates app-like experiences within email, enabling frictionless engagement without requiring customers to leave their inbox. The approach solves the critical “attention recession” problem by establishing direct, personalised communication hotlines with customers. By upgrading email from a simple messaging channel to an interactive platform, NeoMartech companies help brands reduce their dependency on costly reacquisition campaigns. This creates a more efficient, engaging customer experience that maintains consistent connection and engagement, ultimately reducing the need for expensive retargeting through adtech platforms.

See:

N=1 Personalisation to Solve the “Not for Me” Problem: NeoMartech companies leverage advanced AI technologies to deliver true one-to-one personalisation at scale, addressing the pervasive “Not for Me” problem in marketing. They employ AI Twins and agentic AI to create hyper-personalised customer experiences, while implementing Large Customer Models to centralise and effectively utilise all customer data. This sophisticated approach enables the creation of “departments of one” serving “segments of one” – a level of personalisation previously unattainable. Through AI-powered Co-Marketers, these companies orchestrate personalised campaigns that anticipate customer needs and deliver relevant, timely content. This predictive capability ensures each customer interaction is meaningful and valuable, moving beyond traditional segmentation to true individualisation. The result is a marketing approach that feels personally crafted for each customer, dramatically improving engagement and loyalty.

See:

4S Delivery and Business Model: NeoMartech companies operate on a comprehensive 4S framework that transcends traditional SaaS models. This framework begins with Strategy, providing strategic guidance beyond mere software solutions, followed by Software (Stack), delivering integrated technology platforms for a unified customer view. The third S, Services, includes Kaizen Progency for continuous improvement and optimisation, while the fourth S, Sharing, implements profit-sharing models that align vendor success with customer outcomes. Together, these four elements combine to deliver the crucial fifth S: Solutions for sustainable success. This model represents a departure from conventional MAU/MRR pricing, instead focusing on value-based approaches that foster true partnerships between NeoMartech companies and their clients. The result is a more collaborative, outcome-focused relationship that drives measurable business results.

See:

6

Alternate Framing

I asked Claude and GPT on alternate ways to think about NeoMartech.

Claude

A NeoMartech company is a next-generation marketing technology provider that fundamentally reimagines how brands build and monetise customer relationships. Unlike traditional martech companies that focus on campaign management and channel orchestration, NeoMartech companies are profitability partners who combine AI-powered technology, continuous innovation, and aligned business models to help brands achieve exponential forever profitable growth through retention re-engineering.

Core Characteristics

  1. Retention Re-Engineering DNA: Rather than just adding features for retention marketing, NeoMartech companies fundamentally re-engineer how brands approach customer relationships. They leverage AI, data, and new interaction models to transform sporadic customer purchases into predictable recurring revenues. Their platforms are built around maximising Customer Lifetime Value (LTV) while minimising Customer Acquisition Cost (CAC), creating sustainable profit flywheels that reduce dependency on expensive acquisition channels.
  2. AI-First Architecture: NeoMartech companies build their platforms with AI at the core, not the periphery. They integrate three key AI elements: Large Customer Models that unify and make sense of all customer data, AI Twins that enable true segment-of-one personalisation, and Co-Marketers that serve as AI-powered orchestration engines. This architectural approach enables hyper-personalisation at scale while solving the fundamental “Not for Me” problem that plagues traditional marketing.
  3. Next-Generation Engagement Platforms: Instead of treating channels as mere message delivery systems, NeoMartech companies create interactive “hotlines” that enable two-way, in-channel conversations and conversions. Their platforms transform traditional push channels like email into dynamic engagement hubs through innovations like AMP, Email Apps (Epps), and ActionAds. This solves the “attention recession” problem by creating frictionless, app-like experiences within existing channels.
  4. Partnership Business Model: NeoMartech companies reject traditional SaaS pricing based on Monthly Active Users (MAUs) in favor of true partnership models built on shared success. They combine Strategy, Stack (software), Services (continuous improvement through Kaizen Progency), and Sharing (profit-sharing) to deliver comprehensive Solutions. This 4S framework aligns incentives between the NeoMartech provider and brand, making them true stakeholders in their clients’ profitability journey.

This framing emphasises how NeoMartech companies are fundamentally different in their:

  • Core mission (retention re-engineering vs campaign management)
  • Technical architecture (AI-first vs AI-enhanced)
  • Engagement approach (interactive hotlines vs push channels)
  • Business model (profit partnership vs software licensing)

ChatGPT

A NeoMartech company can be framed as a next-generation marketing entity that prioritises sustainable growth through a retention-first, customer-centric approach, harnessing advanced AI and data to transform traditional martech. Unlike conventional acquisition-focused models, NeoMartechs build high-Lifetime Value (LTV) relationships by treating customers as partners rather than transactional leads.

Characteristics

  1. Retention-Led Strategy: NeoMartechs pivot away from high-cost acquisitions, focusing on maximising the lifetime value of current customers and fostering loyalty-driven growth.
  2. Personalised Interactive Channels: NeoMartechs leverage interactive communication tools, such as NeoMail, that create direct, habitual customer relationships, supporting continuous two-way engagement beyond typical marketing efforts.
  3. Customer-Centric Intelligence: NeoMartech companies deploy AI-driven Digital Twins and Large Customer Models to support truly individualised experiences, turning N=1 personalisation into reality.
  4. 4S Partnership Model: NeoMartechs operate on a four-pillar model—Strategy, Software, Services, and profit Sharing—redefining their role as solution-driven partners to brands. This approach unifies technological advancement with performance-based success, ensuring brands and providers share in profitability, encouraging mutual growth.

This reframing positions NeoMartechs as innovators leading the shift from profit-draining acquisition strategies to a balanced, profitable approach grounded in customer retention and personalisation.

7

Case Study

Let’s analyse how a NeoMartech company can create value using a typical mid-sized B2C fashion/apparel ecommerce company.

Base Business Profile

  • Customer Base: 100,000 active customers
  • Annual Revenue: $30 million
  • Average Revenue Per Customer: $300/year
  • Current Profit Margin: 7% ($2 million)
  • Total Marketing Spend: $5 million
    • Adtech (acquisition/reacquisition): $4 million (80%)
    • Martech (customer engagement): $1 million (20%)
      • Includes: Email, SMS, marketing automation, search, analytics
    • Estimated AdWaste: $2 million
      • Wrong acquisition spending: $1 million
      • Reacquisition spending: $1 million

NeoMartech Impact Potential

  1. Revenue Growth Through Retention Re-engineering
  • Conservative growth target: 5% increase
  • Additional Revenue: $1.5 million
  • Additional Gross Margin (assuming 67%): $1 million
  • Achieved through:
    • Improved customer engagement
    • Higher repeat purchase rates
    • Increased average order value
    • Better cross-selling/upselling
  1. AdWaste Reduction
  • Target: 50% reduction in AdWaste
  • Cost Savings: $1 million
  • Achieved through:
    • More efficient customer retention
    • Reduced need for reacquisition
    • Better targeting of new customers
    • Referrals from happy customers

Combined Financial Impact

  • Total Additional Profit Potential: $2 million
    • Revenue growth contribution: $1 million
    • AdWaste reduction: $1 million
  • Current profit doubles from $2M to $4M

Proposed Profit-Sharing Model

  • Split incremental profits 50/50
  • Brand receives: $1 million additional profit
  • NeoMartech receives: $1 million performance fee
  • Big Adtech loses: $2 million in reduced spending

Key Benefits

For the Brand:

  • 50% increase in profits
  • More efficient marketing spend
  • Better customer relationships
  • No upfront costs or risks

For the NeoMartech:

  • Performance-based revenue of $1 million
  • Aligned incentives with brand
  • Proven value creation
  • Scalable business model

For the Industry

  • Shift from adtech to martech spending
  • More sustainable business models
  • Better customer experiences
  • Reduced waste in digital marketing

This model demonstrates how NeoMartech companies can create significant value by:

  1. Growing revenue through better customer engagement
  2. Reducing wasteful acquisition spending
  3. Aligning incentives through profit-sharing
  4. Creating a win-win scenario for brands and NeoMartech providers

The only losers in this transformation are the adtech platforms, which see reduced spending as brands shift to more efficient, retention-focused strategies. This example illustrates the potential for NeoMartech to reshape the digital marketing landscape, creating Big Martech while rightsizing Big Adtech to Medium (!) Adtech.

**

The Future Beckons

The rise of NeoMartech companies signals a pivotal transformation in digital marketing. These pioneering players – whether established giants or new disruptors – are set to reshape how brands interact with customers, turning one-off transactions into reliable, recurring revenues while dramatically curbing the billions wasted on inefficient acquisition. By integrating an AI-first foundation, interactive engagement platforms, and business models that align profit-sharing with client success, NeoMartechs will usher in the Big Martech era – a time when marketing achieves its true potential as a profit driver rather than a cost centre.

The path is clear: through retention re-engineering, N=1 personalisation, two-way customer hotlines, and profit-sharing partnerships, NeoMartechs will empower brands to build sustainable profit flywheels, bringing their “profipoly” visions within reach. The bold will emerge as winners – both the NeoMartech companies that challenge entrenched models and the brands that partner with them to break free from the acquisition cycle. As marketing stands at this critical juncture, the question is no longer if this transformation will occur, but who will lead it. The future of marketing beckons, and NeoMartech companies are ready to light the way.