Martech: 2018 and beyondInsights into the UK and US marketsSeptember 2017

Executive summary

The nowThe marketing technology (martech) industry has seen rapid growth in recent years. Driven by a wealth of consumer data and the fast-paced, real-time nature of marketing and consumer purchase decision-making, martech tools have been developed to help marketers optimise and automate the delivery of marketing messages at scale. The technology ranges from content marketing tools tailored to different media, to data management, analytics and attribution tools, and vendors vary from start-up specialists to established, full stack, enterprise-level providers.

This research, based on an online survey of more than 500 brands and agencies based in the UK and North America, aimed to assess the current and future states of the marketing technology industry in these regions. The survey was fielded to WARC and Moore Stephens contacts in June 2017, and asked questions around brands’ current and future plans for martech tool use, budgets and barriers to growth. Agencies answered with their typical clients in mind.

We aimed to produce an estimation of the current market size for martech and the results have confirmed the burgeoning market; brands are planning for increased use over the next 12 months, and 50% don’t have all the tools they need. Using martech spend data from the survey, and WARC adspend data, we have calculated that, if our sample is representative, the UK and North American martech market could be worth up to $34.3bn this year.

This figure is reflective of a market that has seen huge growth in terms of the number of vendors and M&A activity over the past few years. The widely publicised marketing technology landscape supergraphic, produced by Scott Brinkler at chiefmartec.com, highlights the speed of growth within the martech industry. When the landscape was first produced in 2011, it consisted of 150 companies. Fast-forward to 2017 and it is a labyrinth of almost 5,000 companies offering myriad services to help marketers meet their goals and objectives.

Over that time, digital marketing adspend has increased from $88.4m to $156.7m: 31% of total global adspend. Our results show that brands are spending an average of 16% of their marketing budgets on marketing technology; 7% in-house and 9% outsourced.

This spend is currently being focused on email marketing, with 85% of brands currently using a tool for email, and almost three quarters using a tool for social media marketing. The budget they currently spend on outsourced martech appears to be going on analytics, measurement and insights: 77% of agencies are managing a tool in the latter discipline on behalf of their clients, and 54% are managing a social media tool.

#1

The futureDamian Ryan, Partner at Moore Stephens, can see how martech is tightening its grip. “This shouldn’t come as a surprise to brands, agencies or anyone in the media industry. I believe we’re entering a new chapter which will be governed by trust and economic common sense. While the rise of digital has been utterly spectacular, it has brought about widespread mistrust in the marketplace and channels that underline its success. Fake news, adblocking, confusion and a worrying absence of transparency are just some of the drivers leading organisations to invest in technologies to provide them with a greater sense of ‘control’.”

Going forward, this research highlights the opportunity for growth in the sector, if brands can secure the necessary investment and organisational change required. 50% of the responding brands don’t have the tools they need, but investment is intended across the range of martech disciplines.

#1

Respondents to the survey expecting to increase their martech budgets over the next year anticipate an average rise of 10%, which could mean a martech spend reaching $35.8bn by the end of 2018 in the UK and US combined.

Set to see the biggest growth this year in terms of martech use is experience optimisation. Almost a third of brands plan to use a tool to assist them in this discipline in the next twelve months, and it is a key priority for the majority of respondents.

Particularly of focus is the skillset associated with user experience. Though the majority of marketers feel they have the internal skills and talent they need to capitalise on martech investment, they have also seen an increased need for skills associated with martech use, and customer experience skills are at the top of their list of priorities.

What does this mean for the players in the market?Brands are currently spending more on outsourced martech than in-house, which is good news for both agencies managing tools, and for vendors providing account-management services. Increased competition does increase the likelihood of the cost of these tools falling, but this encourages further innovation and development of the industry.

Media owners, though not specifically addressed in this survey, are also feeling the impact of the surge in martech investment. The increased influence of technology in media buying decisions mean a mix of winners and losers among media owners. Increasingly complex marketing attribution, measurement and analytics tools can mean increased spend on some media and decreased spend on others.

On top of this, ad blocking technologies are becoming more prevalent, affecting the reach of certain channels. This has come as a reaction from consumers to a bombardment of personalised, targeted and retargeted ads, executed programmatically using martech tools. Media owners have also had to take action against ad overload on their sites, reigning in the digital advertising

rush enabled by martech. Non-digital media will also feel the impact of martech; location-based targeting and the ubiquity of mobile devices have already had a knock-on effect for out-of-home (OOH) advertising, and emerging applications of martech to OOH include augmented reality billboards.

The great proliferation of services and tools means that the battle between specialist and generalist vendors is heated, and the choice for brands complex. This survey finds that brands are most likely to be using one martech platform for most needs, supported by a number of specialists for others.

The pros and cons of using a ‘full service’ martech stack versus a number of specialists are unique to individual brands, but the vendor race to provide the best solution to the issues facing modern marketers is resulting in an explosion of innovative entrepreneurs as well as significant merger, acquisition and consolidation activity. As a result, now is an exciting time to be following the changing dynamics of the marketing technology sector.

#1

Brands are spending 16% of their marketing budgets on marketing technology#2

On average, brands are spending 16% of their marketing budgets on marketing technology, shown in Figure 1 split by region, and between in-house and outsourced marketing technology. The results suggest that UK brands are slightly more invested in martech, spending an average of 18% of marketing budgets on martech (compared to 14% in the US).

Using adspend as a proxy for total marketing budget, and budget data provided by survey respondents, this research reveals that the market size of martech for the combined US and UK markets could conceivably be more than $34.3bn. If the generally accepted working to non-working marketing expenditure ratio of 4:1 is then applied, this figure could reach as high as $40bn.

When asked how they expected their martech budgets to change over the next 12 months, 46% of UK brands said their budgets would increase, compared to 38% of US brands. Those expecting to increase their budgets will do so by an average of 10% over the next year, meaning that martech spend could reach to a figure of between $35.8bn and $43.4bn by the end of 2018 (not accounting for the small proportion of decreased budgets - see Figure 2).

Brand respondents

UK US

Figure 1: What percentage of your overall marketing budget do you typically spend on marketing technology?

In-house marketing technologyOutsourced marketing technology

8% 5%10% 9%

Brand respondents

Figure 2: How has increased investment in marketing technology affected your media spend?

28% 39% 33%

Increased investment in marketing technology has meant our media spend has decreasedIncreased investment in marketing technology has meant our media spend has increasedIncreased investment in marketing technology has not affectedour media spend

#2

What does this mean for…Brands?Those brands that are not investing in martech could soon find themselves left behind by their more digitally mature competitors.

Agencies?Brands are typically spending more on outsourcing their martech needs than buying or subscribing to tech for use in-house, and budgets are increasing. This represents an opportunity for agencies to meet the martech needs of brands, who can often lack the skills and means to access martech platforms independently, particularly at the start of a digital transformation journey.

Technology vendors?Budgets are increasing, meaning an increased spend with martech vendors, who need to be prepared to meet the needs of the 50% of brands who don’t have all the tools they need, either working via agencies, or directly with brands.

Interestingly, 48% of US respondents only expect to increase their budget by 0-5% whilst 48% of UK respondents would expect the growth to be between 11 and 25%.

According to the survey, this increased investment is having a mixed impact on media spend. For a third of respondents, increased investment has not affected media spend, indicating that these brands are finding efficiencies elsewhere. For 28%, media spend has decreased as a result of increased martech investment, and for 39% investment has caused spend to increase.

Brand respondents

Figure 3: How do you expect your marketing technology budget to change over the next 12 months?

Increase Keep same Decrease

USA UK

38% 55% 7%46% 50% 4%

The size of the martech opportunity: 50% of brands don’t have all the tools they need#3

The majority of agencies believe their clients don’t have all the tools they need and don’t fully utilise what they do have (58%). In comparison, half of client-side respondents think they have the tools they need. Of these, 26% go further, saying they have what they need and fully utilise all their tools.

Marketers are most likely to be using a martech tool for email; 85% are currently doing so, with a further 3% planning to do so in the next 12 months. The majority of respondents also use social media and CRM tools, whereas experience optimisation and collaboration tools are currently used by around a third. However, both the latter will see growth over the next year, with almost a quarter of additional respondents planning to begin using a tool over the next 12 months to assist them in user experience (UX) and collaboration endeavours.

Interestingly, US respondents are slightly ahead of the UK in their use of tools despite higher investment in the UK; 88% of brands in the US said they were using email, compared to 82% in the UK, and 71% said they were using CRM tools compared to 66% in the UK. Marketers from both countries expect to see the largest growth in the

Figure 4: Thinking about the marketing technology capabilities within your company, what best describes your capabilities?

Brands Agencies

We have all the tools we need

and fullly utilise them

We have all the tools we need but don’t fullly utilise

them

We don’t have all the tools we need but fullly utilise what we do

have

We don’t have all the tools

we need and don’t fullly utilise what we do have

26% 24% 31%2% 21% 19% 19% 58%

All respondents

Figure 5: In which of the following marketing disciplines do you currently use a marketing technology tool, and what tools do you expect to be using in 12 months time?

Currently use Plan to use in next 12 months

85%

75%

68%

64%

63%

58%

58%

57%

56%

47%

41%

37%

28%

9%3% 7% 9% 11%

11%

14%

15%

14%

11%

17%

20%

24%

23%

13%

Emai

l

Soci

al m

edia

CRM

Anal

ytic

s

Cont

ent

mar

ketin

g

Mob

ile

Data

m

anag

emen

t

Adve

rtis

ing

tech

Com

mer

ce,

lead

gen

erat

ion

& sa

les

SEO

Mar

ketin

g au

tom

atio

n

Expe

rienc

e op

timis

atio

n

Colla

bora

tion

(e.g

. Sla

ck /

Trel

lo)

Non

e of

the

abov

e

Brand respondents use of collaboration and experience optimisation tools, but the country results revealed a difference in the proportion expecting to be using a tool for analytics, measurement and insights in the next 12 months; 24% in the US expect the latter, compared to only 8% in the UK.

#3When this data is cross tabulated by marketing budget, the correlation between budget and use of martech tools is clear. In all but one discipline, those brands with high budgets (>£10m/$15m) were more likely to currently be using a martech tool compared to those with mid to low budgets (Figure 6).

The impact of budget was particularly strong on use of analytics, measurement and insight (85% of high budget respondents compared to 57% of the rest), advertising technology (77% vs 51%) and SEO (65% vs 41%).

Those brands with higher budgets are logically those more likely to be able to pay for the services of an agency to manage their marketing technology tools for them, and the higher proportion of high-budget brands using analytics tools reflects the agency response. 83% of agencies said their typical clients currently use a martech tool for analytics; the most-selected discipline.

Figure 6: In which of the following marketing disciplines do you currently use a marketing technology tool?

High budget The rest

Analytics measurements & insights

Social media

Email

Advertising tech

Mobile

Data management

CRM

Content marketing

SEO

Commerce, lead generation & sales

Marketing automation

Experience optimisation

Collaboration (e.g. Slack / Trello)

None of the above

81%

77%

77%

73%

73%

69%

69%

65%

58%

50%

46%

42%

12%

57%

71%

84%

51%

54%

53%

65%

58%

41%

52%

38%

33%

22%

9%

85%

Brand respondents – high budget vs mid and low budget

#3The agency response (Figure 7) reflects brand usage of martech tools, with analytics, measurement and insights tools and social media tools most likely to be managed on behalf of their clients. Comparing the US to UK results shows that US agencies appear to be ahead of the UK in the use of tools, in a number of disciplines. Agencies in the US are more likely to be using martech for advertising technology, CRM, email, mobile and content marketing than the UK.

Figure 7: In which of the following disciplines do you manage marketing technology tools on behalf of your clients?

75%

54%

42%

35%

38%

31%

24%

23%

24%

23%

21%

20%

20%

6%

80%

54%

63%

45%

32%

39%

38%

36%

27%

23%

25%

20%

20%

2%

Analytics measurements & insights

Social media

Advertising tech

Content marketing

Data management

Mobile

Email

CRM

Marketing automation

SEO

Experience optimisation

Collaboration (e.g. Slack / Trello)

Commerce, lead generation & sales

Other

UK USA

Agency respondents What does this mean for…Brands?The message for brands here is that use of martech tools across a range of disciplines is increasing. To remain ahead of their competition, brands may need to start including the introduction of new martech tools into their marketing strategies, gaining the board buy-in and securing the necessary resource ahead of their use becoming mainstream.

Agencies?The use of experience optimisation tools will grow over the next year, and is a priority for the majority of responding marketers. This means increased investment, some of which will be spent with agencies by those brands without the necessary skills and resource in house, providing an opportunity for agencies to provide UX management for their clients.

Technology vendors?Budget is inevitably an influencing factor on purchase decisions. High-budget brands are the big wins for vendors, however the opportunity also lies in providing scaled down or SAAS options for lower-budget brands, who have the intention to use martech tools without the budget to match.

Limited budget is the biggest barrier to the growth of martech#4

Positively for an industry centred on the use of technology, when asked about barriers to martech investment and use, inadequate technology innovation was only selected by 14% of brands, with budget constraints emerging as a much more immediate concern for both brands and agencies (42%).

Breaking the results down by country reveals that these budget constraints are more of an issue in the US (47%) than the UK (36%) (which is in line with the finding that the UK invests a higher proportion of budgets on martech), while brands in the UK (30%) see a lack of understanding of technology as a barrier more keenly than in the US (19%).

However, Figure 8 does reveal the frustration of agencies in terms of the perceived barriers within their clients’ organisations. Internal silos are felt as a barrier by 28% of agencies (compared to only 13% of brands), and a lack of understanding of the technology available is seen as by far the biggest barrier to martech use and investment by agencies, with more than half (57%) selecting it.

In fact, across the board, agencies appear to feel the barriers more within their clients’ organisations more than the brands themselves. This is perhaps a result of a less biased viewpoint than rating your own companies’ capabilities, but can also stem from the increased expertise often present within agencies that allows a different perspective on capabilities.

Mar

ketin

g bu

dget

co

nstra

ints

Lack

of

unde

rsta

ndin

g of

the

tech

nolo

gy a

vaila

ble

Com

pany

cul

ture

Lack

of s

kills

an

d ta

lent

Unco

nnec

ted

data

/ p

oor d

ata

qual

ity

Inad

equa

te

tech

nolo

gy

inte

grat

ion

Supp

ort

from

sen

ior

man

agem

ent

Inte

rnal

silo

s

Mea

sure

men

t and

m

etric

s

Non

e of

the

abov

e

Diffe

rent

iatin

g be

twee

n a

larg

e no

. of

sim

ilar s

uppl

iers

42%

25%

19%

17%

16%

16%

14%

13%

12%

11%

9%42%

57%

25%

21%

26%

21%

13%

28%

13%

1% 13%

Brands AgenciesAll respondents

Figure 8: What do you see as the main barriers to marketing technology investment and use in your company?

#4In Figure 8, ‘lack of skills and talent’ was the fourth most-selected barrier to martech investment by brands, though only 17% selected it. Regularly a stumbling block in technology-associated disciplines, finding the right skills to drive marketing innovation forwards can generate rapid change within organisations.

The fact that less than a fifth of brands see it as a barrier is an encouraging sign for the martech industry, and further to this, more than half (54%) agreed that they have the internal skills and talent that they need to capitalise on martech investment (Figure 9). This finding is despite 66% seeing an increased need for data skills associated with use of martech.

Agencies see this need more keenly; 90% have seen the increased need for skills with increased martech use, and only 17% think their clients have the internal skills and talent they need to capitalise on martech investment.

Figure 9: To what extent do you agree or disagree with the following statements?

14.3%

40%

23.3%

18.1%

4.3%

16.6%

29.3%

43.9%

9.6%

16.3%

49.8%

23.4%

7.2%

53%

37%

8%

Brands Agencies Brands AgenciesWe (or our clients) have the internal skills and talent we (or they) need to capitalise

on marketing technology investment.

We have seen an increased need for data skills associated with our use of

marketing technology

Strongly Disagree Disagree Neutral Agree Strongly Agree

All respondents

What does this mean for…Brands?Brands need a top-down approach when it comes to martech, which can often involve significant investment either in-house or with an agency, and therefore need the sign-off of senior management. Brands need to resolve their organisational structures and cultures to avoid silos, collaborating to make the case for martech budget allocation to gain the support of senior management. Martech-associated data and tech skills are crucial to ensure that increased investment is capitalized on, and must be in place in advance of a new martech tool to ensure continued management buy-in.

Agencies?Agencies need to advise and assist their clients on the skillset needed and the upskilling and training process. Even in an agency-managed tech situation, the more educated the client, the better the agency-client relationship and the more supportive they will be of investment.

Technology vendors?Lack of understanding of the technology available is the second biggest barrier to investment. Vendors need to work on educating the market; training existing clients and producing content that will help the understanding of leads and prospects.

Broadly, we have seen that the every role of the marketer is rapidly changing. As we move towards the increased need for data and tech skills, as mentioned above, we would predict (by

reviewing the increases in marketing budgets for martech) that in the future marketing professionals will need a tech background as much as strategic marketing experience.

Brands prioritise CX skills as they plan for the use of experience optimisation technologies#5

Myriad tools for optimising the customer experience are available to brands, and for the 60% that see customer experience (CX) optimisation as very important for their company, investment in a martech tool alongside the talent investment evidently taking place could be the key to increased effectiveness. A bad customer experience can scupper even the best creative campaign, and marketers are becoming well aware of the need for this experience to be consistent across channels.

The results show that brands in the US were more likely to see CX optimisation as very important than those in the UK (65% vs 56% respectively), and the agency results reflected the same pattern, with 47% of US agencies selecting ‘very important’ compared to 37% of those in the UK.

Interestingly, martech tools for experience optimisation are among the least-used by client-side respondents to this survey (Figure 5), with only 37% currently using martech for CX and a further 21% planning to in the next year. It is possible that this is a reflection of the need to establish a skills base internally before investing

Figure 10: How important is customer experience optimisation for your company or for your clients?

Very important Somewhat important Unimportant

60% 36% 4%40% 56% 4%

Brands Agencies

All respondents in a potentially expensive tool, but also represents an opportunity for those looking to get ahead of the curve with optimising their customer experience.

Of those respondents using martech for CX, only 17% claim to be able to optimise the experience across all channels and touchpoints. When asked which tools they use for optimisation (Figure 12), CRM and analytics and tracking tools are most-used in both the US and UK. The US again appears to be ahead of the UK in its use of tools (with the exception of content management systems), however, the majority of technologies are being used by less than a third of respondents, despite the purported importance of CX to responding brands.

#5These results indicate that although brands appear to be committed to the optimisation of CX, their use of marketing technology to realise these ambitions is not yet optimal. Emphasis is being placed on skills, however. Most in demand for brand-side marketers in both the UK and US are customer experience skills; 45% of our respondents selected CX skills as their highest priority, with 16% ranking it their first choice (Figure 11).

Ultimately, all martech use should be working towards improving the customer experience, as the customer is the focal point of all marketing strategies. As a result, it could be argued that any use of marketing technology is helping to create a better customer experience, and good experiences fuel sales and therefore business growth.

What does this mean for…Brands?Customer experience optimisation is very important to 60% of brands, but only half of that proportion are using a tool to assist them with optimisation. Those planning for the future, with the intention to use technology, and acquiring the necessary skills base, will likely pull ahead of their competitors.

Agencies?Use of experience optimisation tools is set to increase over the next year, and a greater proportion of spend goes to outsourced tech than in-house, meaning that those agencies offering CX tool management could see an increased opportunity over the next 12 months.

Technology vendors?Almost 30% of brands intend to invest in an experience optimisation tool, so the potential market for CX tool providers is wide. Specialist tools could thrive, and increased acquisition activity as the enterprise-level stack providers acquire smaller specialists to add further CX provision to their suites.

Figure 11: Please rank the top three most important skills in order of priority when hiring into the marketing function at your company.

First Choice Second Choice Third Choice

Customer experience

Creativity

Turning data into actionable

insights

Brand strategy

Data and analytics

Content

Email and automation

Commercial acumen

Social

Search

Mobile

16%

13% 11% 14%

13% 15% 10%

15% 12% 10%

10% 10% 12%

5% 6% 14%

8% 10% 6%

7% 9% 8%

7% 6% 5%

4% 3%2%

3% 4% 2%

14% 15%

Brand respondents

Figure 12: Which of the following marketing technologies are you using to optimise the customer experience?

CRM

Analytics and tracking

Personalisation

Social media management systems

Content management system

Data management platform

Marketing automation

Remarketing

Conversion optimisation

Emerging technologies (e.g. AI, VR, IoT)

None of the above

Other

46%50%35%48%35%42%37%24%32%25%21%27%27%21%18%14%11%11%6%2%1%1%

50%50%

UK USA

Brand respondents

45%

38%

38%

37%

32%

26%

24%

24%

17%

9%

9%

Specialist versus generalist: one or many?#6

As the martech vendor market has grown, there has been a battle between the enterprise-level full-stack providers and the smaller specialists, with the former purporting to provide for their clients’ every martech need (and then some), and the latter claiming their specialist knowledge and technology means better results. The winner of that battle inevitably ends up as the sum of the individual needs and objectives of a company, the expertise they have in-house, and the budget they have to spend. Nevertheless, merger and acquisition activity continues as martech giants purchase specialists in order to add capabilities to their suites, and own their competitors.

“There is a current trend towards cx becoming as important as the product to the customer,” notes Aimee Griffiths, Director at Moore Stephens. “One of the challenges marketers face now is how to consolidate the information they have from many specialist tools and still present a smooth consistent customer journey.”

Speaking on his martech landscape infographic, Scott Brinker said, “The spectacular scope explosion of marketing, and the rate at which new disruptions and innovations continue to roil marketing and business at large – has made it impossible for any one vendor to deliver everything that a marketer needs in a digital world.”

“Almost all of the major providers now acknowledge this, and they’ve shifted their strategies to embrace the ecosystem – becoming true ‘platforms’ that make it easier for marketers to plug in a variety of more specialised and vertical solutions.”

We asked respondents whether they used one or many providers for their martech needs. Overall, 24% of brands said they use one provider for the entire stack, but the highest proportion (41%) said they use one provider for most needs but specialist providers for others.

When this data is crosstabulated against the data in Figure 4, those who regard their companies as having all the tools they need and fully utilising them are far more likely to be using one martech provider for the entire stack than the rest (50% vs 15%). This indicates that those using a full-service provider are more likely to be confident in their full utilisation of the tools on offer.

#6Whether this full usage of the tools is a perception of those using a full-stack provider or a fact remains to be seen, but agencies certainly have a much less bullish attitude towards their clients’ use of tools. Only 2% feel their clients have all the tools they need and fully utilise them, and a majority of 58% believe their clients don’t have the tools they need nor fully utilise those they do have.

The developing industry is finding new ways to adapt to continuing innovation, and established vendors are competing with emerging contenders by improving the ability for integration of their products with others, allowing customers to use their product as a base stack and plug in other specialist tech to produce a ‘best of breed’ stack. In the meantime, the pace at which the digital marketing industry is developing and diversifying is providing space for new entrants to gain a foothold in the market, some succeeding, some failing, and some ending up belonging to their competition.

“The acceleration of martech suppliers is not sustainable and will inevitably lead to significant consolidation in the year ahead,” says Moore Stephens’ partner, Damian Ryan. “The winners will be determined in three ways – strength of team, commercial traction and strength of balance sheet.”

What does this mean for…Brands?Brands need to be wary of the almost overwhelming number of options available to them when it comes to martech vendors. Clear strategy and objective setting is vital prior to taking on a vendor, and research into exactly how each vendor will help a brand meet these objectives will help with the selection process.

Agencies?Agencies have a role in educating their clients into the tools that would help them reach their goals. As the marketplace evolves, agencies will have a role to play in assisting their clients to plug in multiple technologies to their martech stacks, while others will be tasked with using increasingly complex martech tools on behalf of their clients, with the high expectations for results that this comes with.

Technology vendors?The successful specialists can expect to see multiple attempts at acquisition, and will need to decide whether to continue pursuing the independent, specialist stance, or to become another bow in the arrow of the established “full service” stacks. These established platforms need to keep evolving, adding emerging tools and services either through acquisition, or through developing a more open platform that clients can use as a base into which to plug other tools.

We use one marketing

technology provider for the entire stack

We use one marketing technology provider

for most of our needs, but specialist providers

for others

We use specialist independent

providers for all of our needs

Figure 13: Thinking about the marketing technology tools you currently use, which statement best describes your access to them?

24% 34%42%

Brand respondents

Key takeaways#7

#1 #2 #3 #4Brands are spending 16% of their marketing budgets on marketing technology.

The marketing technology (martech) industry has seen rapid growth in recent years. Driven by a wealth of consumer data and the fast-paced, real-time nature of marketing and consumer purchase decision-making, martech tools have been developed to help marketers optimise and automate the delivery of marketing messages at scale.

We asked brands for their marketing budgets and the proportion of the latter spent on marketing technology (martech). On average, 16% of budgets are spent on martech (18% in the UK and 14% in the US). This is more likely to be outsourced spend than in-house.

The martech market could be worth more than $34bn.

We aimed to produce an estimation of the current market size for martech and the results have confirmed the burgeoning market; brands are planning for increased use over the next 12 months, and 50% don’t have all the tools they need. Using martech spend data from the survey, and WARC adspend data, we have calculated that, if our sample is representative, the UK and North American martech market could be worth up to $34.3bn this year.

This figure is reflective of a market that has seen huge growth in terms of the number of vendors and M&A activity over the past few years. In 2011, chiefmartec.com listed around 150 companies in the space. Fast-forward to 2017 and it is a labyrinth of almost 5,000 companies offering myriad services to help marketers meet their goals and objectives.

Brands expect martech budgets to rise by 10% over the next 12 months.

Going forward, this research highlights the opportunity for growth in the sector, if brands can secure the necessary investment and organisational change required. More than 40% of respondents expect their martech budgets to increase over the next year, by an average of 10%. This means that martech spend could reach to more than $43bn by the end of 2018.

Set to see the biggest growth this year in terms of martech use is experience optimisation. Almost a third of brands plan to use a tool to assist them in this discipline in the next twelve months, and it is a key priority for the majority of respondents.

50% of brands don’t have all the martech tools they need.

The opportunity presented by martech for vendors and agencies is large; half of brands and 58% of agencies don’t think they (or their clients) have the tools they need. Over the next year, brands are most likely to begin using experience optimisation, collaboration and marketing automation tools.

Particularly of focus is the skillset associated with user experience. Though the majority of marketers feel they have the internal skills and talent they need to capitalise on martech investment, they have also seen an increased need for skills associated with martech use, and customer experience skills are at the top of their list of priorities.

Contact us#8Amy Rodgers - Research Editoramy.rodgers@warc.com Imaad Ahmed - Marketing Directorimaad.ahmed@warc.com

Trends reportsYou can find all WARC trend reports on a range of topics and sectors, by visiting warc.com/trends. From here you can navigate through an extensive range of reports from WARC and our partners, on consumer, tech and media trends. Recommended reading:Toolkit 2017The Future of StrategyLessons from the WARC 100 About WARCWARC.com is an online service offering advertising best practice, evidence and insights from the world’s leading brands. WARC helps clients grow their businesses by using proven approaches to maximise advertising effectiveness.WARC’s clients include the world’s largest advertising and media agencies, research companies, universities and advertisers.

London85 Newman StreetLondonW1T 3EUUnited Kingdom+44 (0)20 7467 8100 enquiries@warc.com WashingtonDC 2233 Wisconsin Ave NW Suite 535WashingtonDC 20007United States+1 202 778 0680 americas@warc.com Singapore20A Teck Lim RoadSingapore088391+65 3157 6200 asiapacific@warc.com

Damian Ryan - Partnerdamian.ryan@moorestephens.com

Aimee Griffiths - Directoraimee.griffiths@moorestephens.com

Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB T +44 (0)20 7334 9191www.moorestephens.co.uk

About Moore Stephens We help you thrive in a changing world. We provide all the support and guidance you need to deal with new risks and opportunities. We ensure easy access to the right people, so decisions can be made quickly and confidently. A consistent team will partner with you to support your aspirations and contribute to your success. You’ll have access to a range of core services, including audit, accounting, tax, risk and systems assurance, corporate finance, restructuring and insolvency, wealth management and disputes analysis. As a Top 10 accounting and advisory network we support a broad range of individuals and entrepreneurs, large organisations and complex international businesses. If your business and personal interactions need to expand, we’ll help make it happen – coordinating advice from a network of offices throughout the UK and in more than 100 countries.