← MarTech Podcast ™ // Marketing + Technology = Business Growth
MarTech Podcast ™ // Marketing + Technology = Business Growth
Changes In The MarTech Landscape
00:43:35
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- [00:00]
Benjamin Shapiro
The Martech Podcast is a proud member of the I Hear Everything Podcast Network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com from advertising to software as a service to data across all of our programs and clients, we've seen a 55 to 65% open rate.
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Scott Brinker
Getting brands authentically integrated into content performs better than TV advertising.
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Benjamin Shapiro
Typical lifespan of an article is about 24 to 36 hours. If we're reaching out to the right person with the right message and a clear call to action, then it's just.
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Scott Brinker
A matter of timing.
- [00:54]
Benjamin Shapiro
Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world class marketers that use technology to drive business results and achieve career success. Here's a host of the Martech Podcast. Benjamin Shapiro When I ran my first marketing department, we only had a handful of tech tools to choose from. I was thinking about the Martech stack I was using in 2012 and it consisted of WordPress, Google Analytics, Mailchimp, Facebook Ad Manager, Mixpanel, Hotjar, Hootsuite, and Moz. Fast forward to today and the Martech landscape has absolutely exploded. We've seen the number of Martech vendors go from 150 in the 2010s to what, over 11,000 now? It's something like 37% growth in the number of vendors per year. So if we were comparing the Martech industry to a startup, it would be in hyper growth phase for over 15 years. And just when we thought things were cooling off a little bit, AI comes along and completely flips the script. So how should marketers navigate the expanding vendor options? Where should we be putting our money? And how is AI changing the marketing landscape? I'm Benjamin Shapiro and to make some sense of the expanding Martech landscape today I'm talking with Scott Brinker. Scott has been mapping out the Martech terrain for over a decade as the VP of Platform Ecosystems at HubSpot, the editor of the Chief Martech blog, and the godfather of the Martech industry. He can see the Martech chessboard like no one else in the world and I'm excited to have him here today. Today's interview is brought to you by AdCritter. Small businesses are at the heart of our communities, but when it comes to advertising, they often get left behind. That's where AdCritter comes in. Are you a small business Owner struggling to compete with big brand advertisings. Relax, you're not alone. Over 30,000 businesses just like yours have faced the same challenge. But I have good news. AdCritter makes professional advertising simple and accessible. No big budgets, no complicated contracts, just results. Their platform gives you all the tools to advertise like big brands across tv, billboards and the web without the hassle. So move away from ineffective DIY solutions, overpriced agency contracts, and advertising platforms that don't deliver results. Join thousands of growing businesses that are reaching their perfect customers with confidence, using AdCritter's smart AI powered tools. To launch your first campaign in just minutes, go to adcritter.com that's adcritter.com Scott welcome back to the Martech podcast.
- [03:44]
Scott Brinker
Thank you for the very kind intro. Benjamin. It's great to be here with you.
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Benjamin Shapiro
It's really always an honor to have you on the podcast. I think we get you for an hour like once a year. And every year there's something that is new and different. And this year is no change. We're going to start at the top. We're talking about Martech landscape. And I want you to give us a little history lesson here. Give us an overview of the history of the Martech landscape.
- [04:09]
Scott Brinker
As you mentioned, like we did the first landscape, officially it was in 2011, and I had about 150 technologies on it, which at the time, 150 logos. It's like, oh my goodness, there's like way too much Martech. Surely this whole thing's going to consolidate. And frankly, the whole reason I put that together wasn't because I had a fetish for putting little logos on a PowerPoint slide. My broader mission at the time was trying to persuade chief marketing officers that they were becoming more and more dependent on technology to execute their strategies and their visions. And that as a result, you should probably think about hiring some more like, technical talent as part of the team that this is investing in what we now have come to see as marketing operations and Martech. And so I originally just put that slide together to like give people a sense of just look at this. And actually when you step back and you're like, yeah, I have a tool in that category and a tool in that category. I mean, even you when you were starting out here, saying, I had my very simple maritech stack, but you like listed six things and it's like, okay, wow, that was 2012. So I think it had the effect, like a lot of people were surprised. And then we kept Updating the landscape year over year just to, like, all right, well, let's, you know, what's new this year? And I think that's where it kind of went to crazy town almost right away. It was pretty much year over year. For those first few years, it was basically doubling. I go from 150 to 300, and then we skipped a year, and all of a sudden it was 1000 and then 2000. And again throughout this whole thing, I think this caught me by surprise as much as anyone else. I would not have predicted this. I certainly wouldn't have signed up for being the guy to put little logos on a slide. If you told me you're gonna have to deal with, like, 14,000 of those things someday, buddy.
- [05:49]
Benjamin Shapiro
Yeah. You didn't know that the slide was gonna have to get bigger and bigger. Hopefully everybody has a big enough screen to fit, what, 11,000 logos on at once. It hasn't always been up into the ride. I know that there was that exponential growth initially. Do you think that there were phases in Martech growth?
- [06:07]
Scott Brinker
Yeah. And certainly it did start to level out. I would say sometime when we crossed, like, the 5,000 mark, it stopped doubling, but it was still growing 30%, 20%. But you sort of had the sense of leveling out. In fact, for a number of years, we kept asking ourselves, okay, is this going to be the year of peak martech? And part of this is people always ask, like, well, wait a second. Doesn't this stuff consolidate? And yes, it does. In fact, actually, if you go back to that original 2011 landscape, the vast majority of the companies that were on that landscape have either been acquired or. Or gone out of business or pivoted. So, like, if you just sort of look and bag and compare, you're like, yeah, absolutely. That consolidated. And even today, like, we continue to have a very robust M and a practice that happens around Martech and ad tech. The challenge is, while there are the very natural forces that you would expect consolidating this on one side of the equation, Just because the barriers to entry in creating software have, like, asymptotically dropped to zero, the ability for more and more people to, like, say, oh, I have an idea. Let me build something and get it out and market. And you could say, like, well, yeah, but just because you build it doesn't mean they will come. But here's where it gets tricky, is there is a demand side to this as well, that marketing continues to just go through this incredible evolution of people are constantly trying to find the new tactic or how do I get this more optimized thing here? Oh my goodness, there's this new channel and what are people doing in TikTok and how do I engage with that? And so marketers do always feel the need to be innovating and finding new ways to get things done. So that matched up with this environment where, hey, anybody can build some software. You still have this influx that kept happening.
- [07:52]
Benjamin Shapiro
It's funny, I think of it as, you know, initially there was that first wave, let's call it the 2010s, where software was hard to develop, so people had to have real business cases. So you got the development of these large platforms, I think of like Marketo and Salesforce and HubSpot, all of the sort of ecosystem type players which eventually became larger and larger. They were really solving a true concrete platform size business problem. And over the time, as you mentioned, the software development got easier. And so then we saw more point solutions, which kind of explains that initial meteoric rise. No code solutions came out and all of a sudden we just had this proliferation. It seems like people stopped being able to find as many point solutions, but then all of a sudden now we're seeing this huge uptick. So platform point solutions, what phase are.
- [08:43]
Scott Brinker
Yeah, it's a really great point is we went from a world where sort of all these things were like independent little pieces out there in the world and good luck figuring out how to get them all together to there was definitely an era that we went in, starting around 2015, 2016, 2017, where a lot of the major Martech platforms stopped trying to ignore this and instead said like, how do we harness this? How do we actually create ecosystems? And like, we can have our marketplaces, our stores, and we can make it really easy then for our customers, yes, we'll sell them as much as we can out of our portfolio, but if they need something else, hey, we have this ecosystem. And in many ways that did actually find a good way to help everyone. For the major Martech vendors, that was a good way to augment anything that they didn't do natively. For those point solutions, they now had a channel to the market for more of the marketers who were acquiring this stuff. If something was in somebody's marketplace and you were a primary user of that platform, you're like, okay, this thing has gone through certain vetting, it has a certain amount of out of the box integration. So that was kind of where we were leveling out. What has happened in these past couple years is just when we thought we'd Sort of reached an equilibrium there. If you can call 10,000, 11,000 products in equilibrium. Sort of scary.
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Benjamin Shapiro
Slower growth at least.
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Scott Brinker
Yes, I really did think we had achieved peak martech, but then AI, we've seen something like 3,000 new products in the Martech space in just over the past 18 months. Again, the vast majorities, these being very, very small products, although not all of them. And it's now this perfect storm where on the supply side, AI has accelerated a whole bunch of people building a whole bunch of new things. But also on the demand side, marketers feel the pressure of, okay, this is a new technological wave. This is going to change what's possible. Boy, I better be figuring out what I can get and use that's going to help me achieve that. So we're in another. I don't know if bubble's the right word because almost implies it's not sustainable. And I, I honestly don't know. But we're definitely in a uptick phase here where the volume of things coming to market is much larger than been for a while.
- [10:49]
Benjamin Shapiro
So let's talk a little bit about this based on what you've seen before, where we're seeing this sort of explosive growth in Martech app and vendor development in this age of artificial intelligence. I think one of the big questions is how many of these vendors and these tools are actually going to have staying power. What is the progression that you've seen from some of the other eras of Martech that we might be able to use to predict what's going to happen with this AI revolution?
- [11:18]
Scott Brinker
I think the fundamental mental shift here is we were used to thinking of software as actually a relatively capital intensive proposition that would naturally converge to having very large vendors consolidate everything. And that wasn't just a marketing, that was pretty much in every software category. Like, that's just how we treated software working. And if you were a startup, the only reason you were a startup was because someday you hope to become a multibillion dollar company or get acquired by a multibillion dollar company. With the proliferation of software that's happening, one of the things that's changed is that's not the only business model you've got now. A ton of people who, let's just take for instance, service providers who again, classically, oh, you're either a software company or you're a services company. Turns out no, people are all sorts of hybrids now. So you have services companies, they build a specialized app that really captures their secret sauce and they either use it as a way to optimize client engagements or they use it as sort of bait to like, oh, hey, we'll put this really useful thing out there and then as people use that, we'll try and get them on as clients. And those are very different business models. They have no expectation that that software is going to grow to become a billion dollar software at some point. It's never going to get acquired by like Salesforce, Adobe and Microsoft. The HubSpot. You've got a whole bunch of small indie developers that, hey, listen, if I create this app and people love it and they use it and I make a million dollars a year off of this, oh my God, this is the perfect business model. Why would I do anything else? And the things that ended in barriers to that was the degree to which we could get this stuff to integrate. And as platform ecosystems have made it easier for those things to integrate. And I think you look at a lot of what's happening with AI where AI agents are coming up with frankly, even easier models to like, have things integrate together. I think the market of total software in marketing is going to be massive. It's still going to be probably a relatively small number of companies that become big multimillion dollar 100 million companies. That's just the math. There's only going to be a small number of those, but a lot of these smaller ones, I think there's going to be a proliferation of them for a long time. And there's a twist on this too. If you keep extrapolating that out, what you really do is at some point you cross the line and you're like, well, wait a second, why am I buying somebody else's software at all These AI tools, I tell it what I want and it's able to create these things for me on the fly. Why do I even need to buy any of these things? Why don't I just like, I'll create more of my own custom software, hey, here's what I want this thing to do. And we're starting to see that happen. And then you get into this weird place, you're like, well, Benjamin, if you create a piece of software just for your own self, it doesn't make any sense for me to put it on the Martech landscape. But when you think about like what companies would actually be using and what's going to be in their stack and how they're going to operate, I think you're going to see a ton of those things.
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Benjamin Shapiro
You're getting right to the heart. And mostly for my business, we're a Media production company. But I think what makes us different is our usage of technology. You know, it's the, I call it podcast OS with the infrastructure and the rules and the marteching, it's the Monday boards that connect to Zapier, that connect to GPT and Claude that feed it back through Cast Magic. And all of a sudden I'm networking all these tools together. And it's funny that sometimes you're not even building software like to create a technology tool, you're really just stacking together some of these other ones. And now with artificial intelligence tools like Replit, how do I copy this crazy infrastructure that we've built to make it easier to produce high quality media? It's like, oh, I'm just going to tell an AI agent to read my rules and copy it. I actually see this now. We don't go exponential now we just go straight up in terms of the number of actual Martech tools that are out there because or soon it'll just be natural language that allows us to create it. It is literally zero development skills required to build a new technology application, which to me is astounding.
- [15:17]
Scott Brinker
In all fairness, I think it will be the full spectrum. You are going to have some very large technology companies that have some of these foundational platforms and systems we use. I mean, like if you're using Replit, Relet's a software company. Is it a Martech software company? Well, I don't know. I wouldn't necessarily frame it that way, but if a bunch of people are using it for Martech, I guess, all right, you are going to have a bunch of these prepackaged things where someone develops something that's novel, that works in a great way, and hey, for like 100 bucks a month, why not? And then, yeah, you're going to have this. We used to call all those little Martech apps, we used to refer to it as the long tail. And this next generation of all this custom driven software, I've started calling it the hypertale because it really is like it's just orders of magnitude more of individual things. And yeah, I think you look at a world not too far away where Martech stacks are a mix of all three of those kinds of things, but increasingly just the way you describe the way you've set the operating system for your business, that more and more companies are going to feel like, listen, I'm not going to do things the way Salesforce or Adobe or HubSpot or Microsoft told me I should do them. I'm going to do it. The way I want my business to actually work. And hey, I'll use those platforms. They'll be a part of my equation here. But you are the architect of your digital operations. You're the architect of your customer experience.
- [16:31]
Benjamin Shapiro
I think it raises an interesting question about investment. So with this hyper tail, we still have these large platforms. There's your point. Solutions. How do marketing leaders, how do the CMOs think about allocating their tech investment today when there are so many different options and ways to allocate their budget?
- [16:51]
Scott Brinker
Most of them actually don't have a tremendous amount of choice on that in the short term. Right? Most businesses, any scale now have an existing martech stack. They have a bunch of existing operations. And as they look at how this is going to evolve over the next few years, they're going to bring in some other things. They're starting to use things like replit to build more custom software. But they've got so much of their current operations on these existing platforms that doesn't get turned off overnight. So it's like the discretionary budget in marketing technology I still think is pretty small. My recommendation to everyone is, in fact, it's been this for like years is the most important thing in design. Designing your martech stack is designing for change. Because whatever you think you need today, you can be pretty sure there's going to be some other new requirement or some other thing you're going to want to do two years from now. And it's impossible for you to predict what that thing is going to be, but you know something's going to come. So the pressure you need to put both on your vendors, but also the architect of your MarTech stack is every time we make a choice of which vendor we're going to go with or how we're going to construct something, are we doing it in a way that is giving us openness and optionality for the future? And I think this is why, like you see these stats, like the martech. Org folks, they run that annual Martech replacement survey and okay, people decide to kick some of their old software to the curb. I'm going to do an RFP here to get a new marketing automation platform or a new CRM. What's important to me, boy, like way up at the top of the list here is, okay, well how easy is it to integrate? How open is the data? Does it have the APIs? Because again, independently given a evaluating what I need it to do today, I know that optionality of being able to connect other things to it in the future. It's going to make my future self a lot happier rather than like, oh, I've just ended up in a dead end, I've got a gun to my head and I have a three year migration before I'll ever be able to change anything.
- [18:46]
Benjamin Shapiro
Hang on a second. The CMO is only in the job for 18 months, so you don't need that much optionality because you're probably getting shit canned anyway. Kidding aside, when you talk about optionality, is that flexibility in terms of your core platforms, your HubSpot, your salesforce, your CRM, your cdp, the basic table stakes you need to run a modern Martech stack being able to integrate into other places? Or is it more of a factor of contract terms and business relationships? Basically what I'm asking is how do you actually build optionality when you kind of need some pillars to build off of, but you want to be able to be flexible enough to change?
- [19:28]
Scott Brinker
Well, again, this is where it's a spectrum. And the more foundational a platform is going to be in your stack, the more like, yeah, when you make that choice, that is a choice that you're probably going to have to live with for quite some time. People don't often change their CRM or they don't often change their marketing automation platform. Although frankly, as I say that they change it more frequently than you might imagine.
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Benjamin Shapiro
But it's painful. It's so hard.
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Scott Brinker
It is painful. But here's the thing. At any point in time you've reached the decision point where we're going to switch to a different CBP CRM map, pick your three letter acronym of choice at the moment in time you've decided, no, we're biting the bullet, we're moving to something else. Evaluating the vendor choices for okay, what is the openness and the flexibility of that platform moving forward? That's where it becomes a top criteria. And the good news is a lot of vendors have gotten the message. They recognize this is now a criteria that buyers are ranking higher and higher. And so again, this takes a little while sometimes for this feedback loop to connect. But you've seen that products have invested more and more with integrations. And again, even now, like this generation of new AI native tools, boy, a bunch of them almost treat like being able to integrate to any API service or any data source as just table. Well, of course you can do that. It's hard to remember that wasn't the case that many years ago.
- [20:57]
Benjamin Shapiro
There's an interesting dichotomy here with when you're starting the vendor relationships of like to earn the business, we're going to give you as much optionality as flexibility as we can. On the flip side, that also means that you're more likely to leave. And so I wonder how that plays out with the larger vendors of we will give you optionality as a cdp. But the reason why people don't change their CDP is a, it's a pain in the butt and B, those are longer term contracts which don't generate generally traditionally provide a ton of optionality.
- [21:26]
Scott Brinker
Well, and again, I think this is why you've seen people push back. There's some data you could track it down of the average software contract and for a while it was sort of trending up to these like three year contracts. And in the past couple of years you've actually seen that now slide back where it's like, nah, it's very unusual to sign a contract that's longer than one year because again, I think just a lot of people are like, boy, I really don't know what the world's going to look like three years from now. So you have to start with the assumption that people buy software because they actually have a genuine need and if they can have a software product that fulfills that and does a great job with that, actually people develop a lot of loyalty to products like, oh, I love that product, it just works so well for me. So the only time I think you get people even by default wanting to think about migrating off of a product is when they're like, this just isn't doing what I need anymore, or they're not adapting to like the new world or hey, wow, they keep raising the price on every renewal, but I don't see what I'm getting for that price relative to now a bunch of other products, you know, that are at a lower price point. So it's almost like the default is people are going to stick with stuff that does what they need and they love. And I think to the degree a software company keeps that as their primary focus, their ability to like, win and retain customers is so much better than like, boy, if your game plan for how we're going to conquer the world is we're going to lock people into these draconian contracts and then milk them for 20 years, you might want to rethink whether or not that strategy is actually going to play out the way you want.
- [22:56]
Benjamin Shapiro
It's funny, I'm the producer of a podcast called the SaaS Business Podcast and Maxio is the company that is hosting the podcast. And a lot of what we talk about in that show is the business models. And there was an interesting piece of data that companies are moving towards these hybrid business models where there's a lower subscription, sort of shorter term, but then in addition to the subscription there's usage based models which is another way to provide people the optionality. It's not just in the length of the term, it's your adoption provides predictable revenue because you got some subscription. But when people are using the service, you get a little extra coin. Everybody walks away happy, builds those happy relationship. It seems like not only are we seeing this need for optionality in terms of the vendor contract relationships and terms, but also with how SaaS businesses are being priced.
- [23:49]
Scott Brinker
No, absolutely. And I love it. I think from an alignment perspective, usage based billing is a wonderful thing. I think the only thing that's probably made it a little bit slower to get the adoption at scale. There are some disciplines and practices that are very comfortable with that. I mean anyone who's using AWS services or maybe even cloud data ware, they're just used to like, yeah, yeah, we forecast this stuff, we map it out, we know how to budget for it. For marketers, they've just been in a mode where so much of what they bought has been seat based and essentially can be viewed as like a fixed cost independent of what they're doing. To go to a mode where now, okay, it's a smaller fixed cost, it's going to be a variable cost based on what's actually being done. It might actually be again, more economically efficient, it might actually have better alignment with the vendor. But now you're having to like sort of forecast, okay, how much am I going to need? How much do I ask for my budget for the year ahead of? And I mean, this isn't terrible rocket science. I think it's just something that's relatively new to marketers. And so I think you will see this adoption happen more and more. It will become part of the playbook for good marketing ops teams is their ability to forecast usage based billing estimates.
- [24:58]
Benjamin Shapiro
One more thing that marketers need to learn, right? We had to go from being creatives to being creatives and technologists and data scientists. Now we need to be financial analysts as well. You mentioned a couple times this sort of brand new world. I'm curious to dive into a little bit of what's happening with artificial intelligence intelligence, since you could see sort of from the top down, what are some of the AI technologies that are most commonly being adopted in this new wave of martech.
- [25:25]
Scott Brinker
To me the single most exciting thing that's happening with these LLMs, these generative AI capabilities, lots of use cases. But the one that gets me really excited is as a new interface to working with software and data. Because one of the things is Martech has gotten more and more complicated over the years. And we could optimistically say it's gotten more complicated because marketing's gotten more complicated, these tools have become more powerful. We can give a whole bunch of good reasons, but at the end of the day, Martech Stack and Martech products have generally become more complex, not less complex. And the user interface has kind of had to track with that complexity where it's like, okay, I have to learn these new menu options and what do I do with these radio buttons and what are the six steps I take? And we kind of just reached a place where for so many people, okay, wow, I can't figure that all out. And you've seen some of the industry data utilization rates. Dravi has just. The software has more complexity than most human marketing teams have the bandwidth to be able to like effectively use. And in many ways that's now actually become the limiter. We can't actually make this software more sophisticated because there's no one around there to actually use that. All of a sudden comes along this beautiful interface available with these gen AI technologies where like, okay, if I can describe in natural language to the software I want, have it interpret that, map it to like, oh, you want a report that will show this cohort for the past three quarters for these four different campaigns and it doesn't black box it, right? Like it can translate that into, oh well, let me configure that report for you, give you that report with all the right configuration. You can double check, make sure, oh yeah, that is the config. No, no, no, I didn't want that thing. I wanted this other. But all of a sudden now, without having to have gotten a master's degree in your reporting engine, anyone could basically unlock the power of that reporting eng super early. But you're seeing more and more throughout these Martech products of people being able to describe things in natural language and have the software figure out how to deliver that to them. And to me, first of all, that's great because it hopefully makes marketers lives a lot easier. It's great because it lets us tap in to some of this power that we're paying for, but probably for a lot of people haven't even figured out, okay, I know the product can do that. I just don't know how to do it and if we actually get that to be almost the default interface of how we get things out of software. Now you get this really wild thing where the software can actually become even more sophisticated than it had been before because we're now separating the complexity of what the software actually does behind the scenes and what for us as humans, the complexity or increasingly the simplicity of the ui.
- [28:07]
Benjamin Shapiro
Yeah, it's really interesting. I thought you were going to segment into there's content, there's data and you went a totally different direction than what I expected, which is is we've got enough actual software, we don't know how to use it actually allowing marketers to tap into and utilize their tools without needing a master's degree in how to get Salesforce to spit out your reports or whatever platform you're using. HubSpot in this case, what a relief. Also a little surprising. Are you seeing when we get into sort of the not just like user interface getting more value extracted from the existing platform. Are you seeing when you think about it from a verticalized perspective, there being either more growth or more adoption in things like, well, all the marketers are using LLMs and artificial intelligence to create their content or analyze their data or push out their marketing campaigns. What's the sort of high level breakdown that you see on a verticalized basis?
- [29:05]
Scott Brinker
Certainly the content generation side has been phenomenal. I think a lot of people are still pretty nervous in most cases about letting the AI just do that unchanged check. But content production, right? And I sort of appreciate the choir. You do this for a living. Content production is hard. More and more of these next generation of AI tools that actually make it easier and easier to do more of this production and do better jobs with it. Particularly if you've got someone who doesn't have a lot of specialized skills around that they're still probably never going to be like a maestro at it just because they have AI. But boy, the difference between being completely incompetent at it to being like, oh actually I can passively get stuff done here. Closing that gap with those gen AI tools I think has been really valuable when you start looking at things like data analysis in many ways. The data analysis side to me is it's a variation of what I was saying earlier about it just a user interface like hey listen, before if I wanted to figure out something about this data, odds are I had to file a ticket for some analyst to like go do this and maybe in three weeks they'll get back to me and by then actually I'VE completely changed my priorities anyway, so thanks. So I think getting better and better where like non data scientist marketers have more and more things that they can just self service in. Like trying to understand what's happening with a data set. Super valuable.
- [30:17]
Benjamin Shapiro
It seems like the delivery piece hasn't quite got there. Artificial intelligence isn't running a full campaign to actually publish it live. It's helping you create your content, it's helping you analyze how it performed, but the mechanism of actually getting it. And maybe there's some personalization tools. So I'm kind of talking out of both sides of my mouth, but are there tools that people are using that is about actual content delivery?
- [30:42]
Scott Brinker
Well, it's interesting. So the state of the art of this right now are these customer facing agents and there's a wide variety of them, some of which I think people are very comfortable with. Customer service agents have gone through a generational leap where they used to be pretty bad at answering those questions. They'd have like a 20% success rate this current generation. And you look at things like Sierra AI, there's like a whole ecosystem of these things. Their satisfaction rate of like resolving things for customers is 60, 70, 80% and it's happening instantaneously. Customers love it. It's Happ know, it's AI, right? It's very clear.
- [31:15]
Benjamin Shapiro
Hang on, 60, 70, 80%, that means 20% best case scenario of your customers are having a bad experience. I personally hate the customer service AI bots. They're not there yet. And I feel like we're putting walls in front of our customers, separating them from the product because we just want artificial intelligence to work. 20% bad experience is a really big number.
- [31:37]
Scott Brinker
Well, okay, so here's the difference between it being a bad experience and not. It's like, okay, if I go to a AI agent and ask a question, here's my issue, here's my problem. Can you resolve this for me and it can resolve it for me instantaneously? Holy crap. That's actually a moment of delight. If it can't and its immediate next step is. Let me connect you with a human agent who can help you with this. Then I'm not like, okay, well that was a terrible experience. Now it becomes like, well, what's happening with this human agent? And let's be honest, there's 20 years of data this having human agents in customer service.
- [32:13]
Benjamin Shapiro
Not perfect either.
- [32:14]
Scott Brinker
We don't know that we had like an 80% success rate with that exactly either.
- [32:18]
Benjamin Shapiro
So fair, fair, fair sample size of 1. But I find the artificial intelligence led customer service sort of bots to be more frustrating at this stage of their development than actually talking to a person. And maybe it's just me being like, no, you're not a human. You can't answer my problem.
- [32:37]
Scott Brinker
What could be. Also, I mean, again, this is very spiky. I unfortunately look at this through the lens of some of these Martech vendors who are on the cutting edge of this and I think they've got amazing products for this, but they get to deploy it with what, five enterprise customers. Meanwhile, there's like hundreds of millions of other businesses who don't have that and are probably using still earlier generation chatbots. So I don't think it's just you. I think this transition takes a long time. I think the reason I was sort of calling it out is because I feel like the ones that are the state of the art here I think are pointing the way towards like there are cases where the AI is actually driving the interaction. There's another set of these, frankly, on email and how handling like inbound email, I'm not a fan of this, but how like a set of outbound emails are being orchestrated by these things. You've probably seen also some of these agents, like they have the AISDRs and the 11X.
- [33:29]
Benjamin Shapiro
I'm interviewing somebody from Qualified next week to be like, we got to get rid of humans. And it's like, yeah, for cold outreach, a human doesn't need to do that. Anyway, very mixed emotions about it as well.
- [33:40]
Scott Brinker
I also have a lot of skepticism. In fact, actually my take on it is the more we end up automating that the only viable outcome is going to be buyers are going to stop responding to this. As a human, I am not dealing with your frigging agent as a buyer when I'm going to start. And I think we're going to see this in the not too distant future. I'm going to have my own agent and your agent can talk to my agent. And my agent who has true agency on my behalf will let me know when I actually have something that, oh, this is relevant for you, this is exciting. And I say this with a little tongue in cheek, but actually I don't think that's necessarily a bad future. I think if we could have these agents like constantly negotiating opportunities, it could actually unlock a lot of value.
- [34:24]
Benjamin Shapiro
Scott, we figured out our business. Let's build AI gatekeepers. We'll use Replit to develop the whole thing and we'll just go to a beach and hang out for A little while.
- [34:31]
Scott Brinker
Hit me.
- [34:32]
Benjamin Shapiro
All right, I want to be respectful of your time. I want to move on. We've got our lightning round where I asked a couple rapid fire Martin Tech specific questions. All right, here we go. Number one, buy or sell? Are you buying or selling? The notion that personalization in marketing is becoming too invasive.
- [34:48]
Scott Brinker
I think our problem hasn't been personalization. Our problem has largely been bad personalization. And I think if you are actually dialing in what's meaningful to a customer, that can be an incredibly valuable thing for the customer and for you. If we do it badly, and a lot of us do it badly, yeah, then it doesn't work. But I remain long on the optimistic future of much more personalized experiences.
- [35:12]
Benjamin Shapiro
I believe in the idea of personalization, having the right message for the right person at the right place and the right time. I think that what people are doing is trying to cram every bit of information that they know about someone into an email and being like, hey, Scott, I saw that you were at this coffee shop at 9:15 with this person yesterday. Do you want to buy my software? And then you get into creep factor. I think that we're still finding the balance. So I know it's buy or sell. I'm kind of a hold right now until the technology gets a little bit better in terms of understanding the context. Let's move on to question two. Double down or diversify. If you were a cmo, would you double down on email marketing or diversify into creator content?
- [35:55]
Scott Brinker
Diversify into creator content.
- [35:57]
Benjamin Shapiro
Preach, please.
- [35:58]
Scott Brinker
I just think the efficacy of email just continues to drop. In fact, the conversation we were just having about more and more sellers being able to leverage more and more AI to drive more and more personalized email. At some point in time, the thing that doesn't change, there is human attention. And you just see people tuning out huge swaths of email. But when we do find content that we actually love, and if we find creators, we follow, we lean in. We're engaged on that. I definitely diversify.
- [36:23]
Benjamin Shapiro
I feel like my job here is to be devil's advocate, but it puts me in a position to talk badly against the industry that I'm in. So take this tongue in cheek. Obviously there is an impact of having a great creator, but it seems like there's a lot of people that are creating what I would call commodity content. So I do think I agree with you. I would diversify. I would start focusing. I have an entire company built around production just to support this, helping people figure out what to say. But just creating content for the sake of content is the same thing as creating email. For the sake of email. You actually have to have a perspective and create something good that builds the affinity, the know, the like, the trust. Otherwise you're howling into the wind, just like going into the spam info inbox. Let's move on to our third question. Crystal ball. How do you predict the role of AI in marketing will evolve over the next two years?
- [37:16]
Scott Brinker
It'll be in everything.
- [37:19]
Benjamin Shapiro
I think it's already in everything. We're getting agents here. At some point in two years, are we going to have AGI? Who knows? But what level of it does it for us? Are we getting to in the relatively near future?
- [37:34]
Scott Brinker
I think from a production and analysis perspective, a lot of like the optimization work, yeah, you take two years. I think AI is going to do the vast majority of that for us. Where we are continue going to have. The need for human leadership is on the strategy and creative. In fact, if anything, hopefully the fact that if you have an amazing idea and there's something you want to experiment with and test, the fact that it's going to be cheaper, faster and easier than ever to like do that because the production is so automated with AI, I think it's great. Folks who really lean into that next stage of this being a wider span for experimentation, we're going to have a wonderful time. I also think again, a lot of the assumptions on that is that the AI is going to work, it's got to work well, it's got to be properly governed, it's got to have the right data. And as a result, I think the responsibilities of these marketing operations and martech teams, whoever is owning that stack and making sure that I'm responsible from an SLA perspective for making this work. For all those people who are doing the experimentation with the strategy and creative, I think those two things are still going to be like human expertise for quite some time.
- [38:40]
Benjamin Shapiro
So let me ask you, if you're polishing your crystal ball and trying to look one level deeper, AI is going to be in everything. It's going to become more sophisticated, it's going to help us with our analysis, with our implementation. What's the impact on marketing departments? Are we seeing a change in responsibilities and functions or are we seeing a contraction traction?
- [38:59]
Scott Brinker
It's early. I think if it's again the sort of tech stack, the production analysis, the strategy and creative, I think the production analysis stuff, those roles are going to, if not entirely go away. They're just like the amount of calories we're going to need doing that from a human perspective. It's just going to shrink. The other two are going to grow. The reality is we talked earlier about how marketers like, oh, and you were joking. Like, oh, yeah, now I have to be a financial wizard, you know, on this. So the ass of marketers has so far exceeded any conceivable bandwidth that any normal mortal has here that I think we're actually still a long way away from saying like, okay, wait, if you could give me more power tools, the things that I could do that would actually be valuable to the company. Man, the list is long. Now. If at some point in time, like five years from now, we've reached the end of that list and you're like, there's absolutely nothing more I could think of doing that would improve the company, then all right, that's a different discussion. But I don't see that on any near term horizon.
- [40:01]
Benjamin Shapiro
Yeah, there's a cradle to grave prediction here, which is. I'll throw it back to the Mad Men era of marketing. We used to be responsible for picking the seven words that went on the billboard and hoping that we chose the right ones that created some sort of attention and memorability. And now if artificial intelligence takes over all the logistics and analysis and all we're responsible for as marketers are getting back to the creator, do we go back to that being our prime job and the most creative people are the most successful marketers as opposed to the best data scientists? I guess we'll just have to wait because the crystal ball isn't very clear when we look that far. Deeply. Let's move on to our last question. Toss up. Would you rather see the Martech industry expand in size with new players or consolidate to provide exits for existing founders?
- [40:49]
Scott Brinker
Both. Can I toss it up? And it lands perfectly on the middle.
- [40:53]
Benjamin Shapiro
No one's ever answered that. I understand why. Tell me about the balance.
- [40:57]
Scott Brinker
I think the natural progression of any scalable technology or business is towards consolidation. And that's good for everyone. It's especially good for those founders who work so hard to make that happen. But all of those founders, one point in time in their lives, they were the new entry coming in and expanding a market that had some other consolidated players and advanced of it. And I think that's one of the things that keeps this industry so vibrant. I don't imagine a world where just like somehow the startup side of this goes away and that's always going to be some sort of expansionary pressure while we're consolidating on the other side, maybe.
- [41:34]
Benjamin Shapiro
I should change the question to be magic wand. If you could wave your magic wand, would you rather have more expansion right now or consolidation for the health of the Martek industry?
- [41:48]
Scott Brinker
Industry, Sorry, I'm still both because it depends on what it is like. Again, if you talk about the core platforms, yes, consolidation people need something they can anchor on that everything connects to that. This is my center of gravity. It's my orchestration. And if I'm like trying to have that a bunch of competing products, it's a very challenging thing for the marketer. But to me, one of the benefits is if you have that really clear, stable foundation, that center of gravity for your stack, it allows you to, whenever you want to be able to experiment with any sort of emergence technology that you want to plug in. And I think that's the benefit of the consolidation on one side is the ability to experiment with those expansionary opportunities without it being chaos.
- [42:31]
Benjamin Shapiro
And a Special thanks to AdCritter for sponsoring this podcast. AdCritter helps small businesses create professional advertising campaigns across multiple channels with transparent pricing and no hidden fees. Upgrade your advertising strategy with an easy to use platform that won't break the bank and join 30,000 businesses that are using Ad Critter to get seen by their ideal customers. To launch your first campaign in just minutes, go to adcritter.com that's adcritter.com I think right now for me, I would rather see expansion now and consolidation later because I think we're going through this fundamental technology shift and I want to see innovation and trial and startups and all the existing startups maybe have to be a little bit more patient as the next level of new companies come up. But I think that the existing players are the ones who gobble up these point solutions. And so I think that we're just so early in artificial intelligence. I want more innovation, I want more investing, I want more new stuff and trial and the startup mentality as opposed to the big businesses gobbling things up and give people the exit. But then again, you're the guy that sees from the top down maybe.
- [43:42]
Scott Brinker
Hey man, when it's looking at it from a future perspective, all we are doing is our best possible guess.
- [43:49]
Benjamin Shapiro
Well, Scott, it's always a privilege to sit down and talk with you and learn about the landscape. I appreciate all of your work. I have been calling you the godfather of the Martech industry since I started the Martech podcast. Would you believe it's been eight years and you were one of our first guests as well. Been doing this for a long time.
- [44:08]
Scott Brinker
Congratulations. That's quite a track record, my friend.
- [44:11]
Benjamin Shapiro
We've known each other for almost a decade now, so I appreciate it. I look forward to our agentic AIs interfacing with each other to schedule our next interview. And thanks for coming on the Martech podcast again.
- [44:22]
Scott Brinker
Hey, have your agent call my agent. Thanks.
- [44:25]
Benjamin Shapiro
We'll do lunch. All right. And that wraps up this episode of the Martech Podcast. Thanks to Scott Brinker, the godfather of the Martech industry, for joining us. If you'd like to chat with Scott, you can find a link to his LinkedIn profile in our show Notes, or you could read his work@chiefmartek.com that is chief martekmartec.com and if you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed, hit the subscribe button in your podcast app or follow us on YouTube. And that's it for today. But until next time, my advice is to just focus on keeping your customers happy. Thanks for listening to the Martech Podcast and I hear everything. Production Looking to launch or scale a podcast like this one for your brand? Then visit iheareverything.com.