• by Dov Yarkoni , January 26, 2016

For as long as I've worked in the marketing industry, prognosticators have been saying that advertising and marketing were due for some industry consolidation.

And guess what, it never happened.

In the 1980s and ’90s, ad agency holding companies started acquiring PR agencies, direct marketing agencies, sales promotion agencies and other marketing service companies in an effort to consolidate marketing for larger marketers under one holding company. However, most marketers ended up unbundling their accounts.

In the mid-2000s, digital marketing industry visionaries who expected a consolidation among the several hundred ad networks ended up being short-sighted as yet more ad networks were founded.

If marketing in an early Internet world was relatively simple, today marketers use solutions for analytics, A/B testing, personalization, lead scoring, CRM and business intelligence, as well as for data, creative and media — one dashboard for each media channel/platform.

This need has driven companies like Adobe, Salesforce, Oracle and IBM to acquire marketing technology solutions in order to offer clients a full marketing stack, and yet the number of highly specialized marketing technology products/services continues to grow.

Though marketers are definitely looking for tools to consolidate their work and make their life easier — at least that is what the ones I meet are telling me — that's not what most are doing in practice.

So why do most marketers build their own stack (and find it very difficult to work with a consolidated marketing stack)?

More marketing channels are making marketing much more complicated and challenging: Until the rise of digital marketing 20+ years ago, the advertising world was relatively straightforward – TV, radio, print, outdoor and below-the-line activities like sales promotion. In the last 20 years, with the birth of digital marketing, new channels, starting with online display, email marketing, search engine marketing, and performance marketing, have become part of a marketer's media mix. And In the last decade, additional marketing channels, most notably social platforms like Facebook, LinkedIn, Twitter, Instagram, Pinterest, WhatsApp and Snapchat, have been added to the media plan. Today, spending $1 million on digital marketing is far more labor intensive than spending $1 million on TV, and one must do it to reach the same coveted demographic as, let’s say, Millennials.

Though the increased complexity would make the need for a unified, cross-channel marketing stack more pressing, it also makes it more difficult to achieve. Marketing stacks do provide some synergies and enable making part of the process more efficient but they do not provide a holistic solution which enables tracking one user across all platforms / touchpoints and forget about optimizing a campaign across all channels and platforms.

Marketers don't want to compromise by committing to an entire stack: An additional major challenge of marketing consolidation, whether it's selecting an agency to manage your marketing account or building your marketing stack in-house, is that somewhere, you'll end up compromising on one of the agencies or on the “all in one” offerings. 

Agencies find it difficult to put together a best-in-class offering that is truly best for all clients. What might work for an automotive client and their needs will be less effective for a consumer packaged goods manufacturer.

And if a marketer does most of his work in-house, each marketing team has its own culture and way of doing things, which makes it more difficult to find a one-solution-fits-all. For an SMB or a startup, the cost of an enterprise solution from Adobe or Oracle will be prohibitive.

The rise of behavioral analytics solutions to enable inputting and analyzing data from multiple sources/technology solutions or stacks: There is a new kind of company that is rising out of the world of big data to empower marketers to better manage their data. Companies like Interana and CoolaData are enabling marketers (and other kinds of organizations) to input an unlimited quantity of data from multiple sources and analyze it in order to derive insights immediately. These companies were founded by teams with experience in behavioral analytics and business intelligence, not marketing, and they won't provide marketing-specific answers like a marketing stack would; for example, reallocate budget from Facebook to local TV.

So how will marketers overcome their cross-channel, cross-vehicle challenges?

I'm already seeing innovative CMOs creating their own, personalized marketing stacks which are comprised of several channel-specific solutions. And with the number of relevant new platforms gaining traction every year, the likelihood of one marketing stack servicing most marketers is getting less and less likely.