Marketing Software Spending Expected to Reach $32.4B by 2018
The marketing software industry is expected to grow to $32.4B, according to a recent report released by IDC. Content production and management in particular will grow from $3.8B to $4.7B over the four-year period. The report, "Worldwide Marketing Software Forecast 2014 - 2018: $20 Billion and Growing Fast," sheds light on the changes in the digital marketing realm.
The report analyzes the marketing software market and its explosive growth. IDC categorizes marketing software into four segments: interaction management, content production and management, data and analytics, and marketing management and administration.
This year alone, IDC predicts enterprises will spend roughly $20.2B on marketing software. IDC expects that number to reach $32.4B in marketing software spend per year by 2018.
Below are some of the report's key insights, according to Forbes' Contributor Louis Columbus:
- Nearly $130B will be spent on marketing software over the next five years.
- The calculated annual growth rate (CAGR) is expected to reach 12.4%, making the industry one of the quickest growing enterprise softwares.
- Roughly 60% of spending will be from marketing teams while the remaining 40 percent coming from IT.
- Data and analytics systems nearly double from $6.9B in 2014 to $11.6B in 2018
- Content production and management will grow almost a billion from $3.8B in 2014 to $4.7B in 2018
- Management and administration-oriented applications is expected to rise from $1.2B in 2014 to $2.2B in 2018
"Marketing organizations are rapidly adopting new technology to better serve their customers, increase efficiency, and drive measurable business performance," says Gerry Murray, research analyst with IDC's CMO Advisory and the report's lead author. Murray expects to see point solutions transition into platforms as marketing software matures. "The full potential of this market will be realized only when technology, creative, and technical services come together. How that happens will determine the winners and losers." Murray refers to this convergence as Marketing as a Service (MaaS).
In an interview with CMSwire, Murray shares his thoughts on the current state of the market, which he calls a, "very big basket of technologies."
"Many of these marketing solutions were born in the cloud to begin with, but they haven't really been put together as an integrated, comprehensive offering for marketing, and that's where we're going." We haven't quite reached the MaaS era as it is described in the report, according to Murray.
But "the era of consolidation has begun," Murray states in a blog post. "Many acquisitions have been made by software industry majors to bring together key pieces of the marketing and advertising software landscape."
Based off of his research, Murray offers five action items for today's CMOs.
- Construct a technology road map based on business drivers to guide investment.
- Consolidate applications into a platform with data and process level integration to improve efficiency and effectiveness.
- Work to integrate marketing technology with the enterprise infrastructure to reveal deeper insights into customers, partners, and market opportunities.
- Establish inter-disciplinary teams and processes to combat the silos point solutions can create.
- Learn to leverage corporate IT to improve vendor management, due diligence, and governance practices.