*By Chris Koehler
Only three things in life are certain: death, taxes, and that marketers will change their technology tools, the so-called martechs. When research Martech Replacement 2024 arrived on my desk, this shift became abundantly clear. From marketing automation tools to CRM, ESP (and beyond), marketers’ insatiable thirst for change continues unabated.
But what’s interesting are the factors driving these changes. Low adoption, contract renewals, consolidation of new tools, new leadership, and many other reasons are catalysts that drive this constant state of flux of technology tools.
In 2024, the biggest factor driving martech change was, unsurprisingly, cost, the most visible part of any martech investment — and the one that is often kept under a microscope by CFOs. It’s no wonder that the latest research Gartner CMO Spend, from Gartner, shows martech spending at its lowest level in 10 years.
But it was the second factor driving martech replacement – integration/open API capabilities – that caught my attention.
Consolidation and fragmentation, simultaneously
Thanks to the explosion of martech applications over the past decade, much has been made of predicting an inexorable shift toward the consolidation of technology tools. The premise is that the fewer applications in your technology stack, the cheaper and better it will be to manage.
While the proliferation of tools is real, and some consolidation is certainly happening, the data tells us that companies are using more software than ever, using specialized tools and applications to fulfill specific, business-critical needs. Look at the technology stacks of most modern enterprises and you’ll see core platforms supporting a Jenga tower of interconnected tools, not a single, universal platform.
The report State of Martech of 2024 found a similar pattern. Despite having core platforms (such as CRM, CEPs, CDPs, or data warehouses), about 82% of the organizations surveyed said they also used alternative products and applications.
It is precisely in this context that integration/openness becomes so important. To be blunt, if a vendor doesn’t integrate its data well with other tools, marketers will find a different tool that does.
A wolf in sheep's clothing
The big martech suites have, of course, noticed this growing demand for interoperability and have created seemingly robust application ecosystems that allow you to use a variety of different tools in combination with their core platform.
But beware, buyer: these integrations are not free.
These large software packages have built their dominance by acquiring and merging smaller, independent technology companies. As a result, these enterprise software packages comprise multiple applications, each operating on different data models that lack internal compatibility, let alone integration capabilities with third-party systems.
This means that while it is technically possible to integrate third-party point solutions with them, they are so complex and clunky — with virtually no documentation — that most end up paying a premium for service providers to consult and build integrations on their behalf.
Looking forward to 2025
Given the importance marketers have placed on integration capabilities in 2024, this veneer of interoperability is unlikely to be enough.
With the rise of APIs and the growing demand for composable technology tools, the bar for martech vendors has never been higher. They need to ensure compatibility across different tools and systems of record, ensure data flows accurately between tools in real time, provide easy-to-use interfaces for teams to leverage their API, and serve best-in-class documentation and tools to support them in building their technology stack.
If this sounds like a daunting task, it shows how marketing, data, analytics and digital teams are maturing within organizations. With this maturity comes greater skills and expertise in technology, and a desire to go beyond out-of-the-box functionality.
It’s important to embrace platforms that are designed to be used with other systems, rather than locking you in. We believe brands should have the flexibility to choose the best channel solutions for themselves, and marketing, data, and development teams shouldn’t have to spend months building manual point integrations to get their data from these platforms.
In 2025 and beyond, I see a future that is much more integrated than before.
*Chris Koehler is Chief Marketing Officer at Twilio.
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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