The martech industry has been valued at $344.8bn (£252.65bn), according to a report released by Moore Kingston Smith, a UK multidisciplinary professional services firm.
New research from Moore Kingston Smith in collaboration with the MarTech Alliance assesses the state of marketing technology (the range of digital tools and software that marketers use to achieve their objectives) in 2021/22 across a range of industries, spanning the finance, entertainment, automotive, media and travel sectors.
The methodology behind the report gives leaders and professionals in the martech space more accurate insight than ever before on budgets, martech maturity, skills, knowledge and talent, as well as future and current trends.
Consolidation in the martech sector
The past 12 months have seen a flurry of activity in the martech sector. Luma reported a 214% growth in martech M&A activity year on year in its Q2 2021 report, with several notable acquisitions of messaging platforms during Q2, including Twilio buying ZipWhip for $850 million. These figures support a significant number of major martech deals taking place.
Damian Ryan, corporate finance partner at Moore Kingston Smith, said: “We expect dealmaking to begin to permeate the mid-tier in 2022. For martech vendors and other stakeholders in the surrounding tech landscape, it’s an opportune time to prepare for a transaction. We expect particular emphasis on vendors who can demonstrate an international client base. For agencies, it’s a key time to assess their role in the growth of martech, to consider where they will add value in the years ahead and how to best demonstrate this value to clients and brands.”
Growth capital into emerging martech technologies
The report shows a significant amount of investment in 2021 into emerging marketing technologies such as voice and data visualisation. With growing M&A and investment activity, there’s further growth to come: more than 61% of respondents expect marketing technology budgets to increase over the next 12 months.
“Marketers are more savvy with technology than ever before, meaning they are more inclined to road test new tools and vendors as well as new technologies, as they seek to achieve greater cut through in a highly congested market,” Ryan added.
Private equity seeks technologies with global appeal and impact, as well as agencies that understand the sector’s future
The report shows a significant appetite among private equity investors for technologies that have a global appeal and impact, and therefore potential to be taken up at a global level. High demand for agencies that understand the future of the sector makes it likely there’ll be a rise in agencies funded by PE.
“The change in this space since Covid cannot be understated,” said Ryan. “PE firms have effectively doubled their bets on agencies in the UK market as more investors are reconciled to the power of humans and service based businesses working hand in hand with tech.”
The report’s findings are based on a survey of 206 respondents: 79% were brand respondents at CMO level or equivalent, and 21% from agencies, including Account Directors, VP and VSP Client Services. All respondents were from companies with 200 employees or more, 62% of which had more than 500, and with a 50/50 split between the UK and North America.
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