Integration or Extinction: The New Rules of Marketing Technology

Integration or Extinction: The New Rules of Marketing Technology

Only three things in life are certain – death, taxes, and marketers changing their tech stacks.

When the Martech Replacement Survey 2024 came across my desk, this mandate for change was abundantly clear. From marketing automation tools, to CRM, to ESP (and beyond), marketers' unquenchable thirst for change remains unabated.

But what’s interesting are the factors driving these changes. Low adoption, contract renewals, tech stack consolidation, new leadership (guilty!), and many more are all catalysts driving this constant state of tech stack flux.

This year, the primary factor driving martech switching is perhaps, unsurprisingly, cost, the most visible part of any martech investment – and the one often held under a microscope by CFOs. Little wonder that the most recent Gartner CMO Spend Survey shows martech spending at its lowest in 10 years.

But it's the second factor driving martech replacement – integration capabilities/open API – that caught my attention.

Consolidation and fragmentation, simultaneously

Thanks to the explosion of martech apps over the past decade, much ink has been spilled predicting an inexorable slide towards tech stack consolidation. The premise is that the fewer apps in your stack, the cheaper and better it will be to manage.

While tool sprawl is real, and some consolidation is certainly happening, the data tells us that businesses are using more software than ever, using specialized tools and apps to fill specific, business-critical needs. Look at most modern companies' tech stacks, including Twilio’s, and you’ll see core platforms supporting a Jenga-tower of interconnected tools, not a singular, one size-fits-all platform.

This year’s State of Martech report found a similar pattern. Despite having core foundational platforms (like CRM, CEPs, CDPs, or data warehouses) roughly 82% of organizations surveyed said they also used alternative products and apps.

It is precisely in this context that integration/openness becomes so important. To put it bluntly, if a vendor doesn’t integrate its data nicely with other tools, marketers will find a different tool that does.

A wolf in sheep’s clothing

The big martech suites have, of course, taken notice of this growing demand for interoperability and built out seemingly robust app ecosystems that allow you to use a variety of different tools in combination with their core platform.

But buyer beware - these integrations don't come for free.

These big suites have built their dominance by acquiring and gluing together smaller, independent technology companies. As a result, these enterprise suites encompass multiple applications, each operating on different data models that lack internal compatibility, much less integration capabilities with third-party systems.

This means that while it’s technically possible to integrate third-party point solutions with them, they’re so overly complex and clunky – with practically no documentation – that most end up coughing up for expensive contractors and consulting services to build the 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 cut it.

With the rise of APIs and the growing demand for composable tech stacks, the bar for martech vendors has never been higher. They need to ensure compatibility between 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 up best in class documentation and tools to support them in their tech stack build out.

If this seems like a tall order, it speaks to how marketing, data, analytics, and digital teams are maturing within organizations. With this maturity comes greater skills and experience in technology, and a desire to go beyond out-of-the-box functionality.

From day one, Twilio has bet big on this concept, and designed its platform to be used with other systems rather than lock you in. We believe that brands should have the flexibility to choose best-in-class channel solutions for themselves, and marketing, data, and development teams shouldn't have to spend months building manual point integrations to get their data out of these platforms.

As 2024 ends, and tech stack considerations loom, here’s to a future that looks a lot more integrated than before.

Chris Koehler is Chief Marketing Officer at Twilio.