UK and US help drive global martech spend up 22% to reach £95bn

Creativity still favoured over strategy and data by half of brands.

The global marketing technology market has grown 22% to an estimated $121.5bn (£95.3bn), according to accountancy firm BDO and Warc, with the UK and the US combined accounting for more than half of its value ($65.9bn).

On average, brands in the UK and North America are spending 26% of their overall marketing budgets on martech, which includes automation software, analytics tools and artificial intelligence. The appetite for martech across the Atlantic has played catch-up with the UK, with US spend doubling in two years, while spend remains steady in the UK.

The Martech: 2020 and Beyond report found that the majority of marketers expect martech budgets to remain at similar levels over the coming 12 months, while 43% expect an increase and a mere 4% envisage a decline.

While more than 75% of brands are using martech to help them with their email and social media, and more than 33% are using it for content, CRM and analytics, only 27% of UK marketers, 15% of North American marketers and 24% of global marketers reckon they have the martech tools they need.

That is in spite of 68% of advertisers and 83% of agencies seeing a growing need for data skills around the use of martech.

Interestingly, this brand obsession with data does not come at a huge cost for creativity in marketing, with nearly half (49%) of brands prioritising creativity over strategy and data, and only 21% considering the latter a "top priority". Just 25% of agency respondents considered strategy and data as such.

It would also appear that, as the use of martech take-up becomes more embedded in advertisers' businesses, it is leading to greater levels of media spend. In last year's survey, a majority of brands felt that increased investment in martech had caused media spend to fall. However, this year, just a third felt the same. Most respondents now think that spend has been unaffected by martech investment.

The study noted that, while anecdotal evidence indicates that advertisers are talking about in-housing tech and services currently managed by agencies, the results of the survey signify little change. The split between in-house and outsourced technology is 50/50.

Elsewhere, the report found that while customer experience is deemed important online and offline by 96% of brands, less than 50% are using martech to track customers between channels, even if 73% said they have the tech in place to optimise it.

Smart data (aka "the Internet of Things") is another subject often on the lips of marketers. But less than 40% are using smart data and 36% have no plans to use connected device tech in the next 12 months.

Amy Rodgers, Warc's managing editor, research and rankings, said: "Despite spend on marketing technology increasing, budgets remain a constraining factor to growth for 50% of brands. The wealth of technology available presents a myriad of choices for marketers, who have to decide where to place budget; a decision that carries risk when it comes to nascent technologies. This perception of risk is reflected by 29% of respondents selecting a lack of understanding of the technology available.

"The fact that this proportion has not decreased since last year illustrates the constant change in the industry and reinforces the need for specialist martech skills to ensure effective budget allocation."

Warc and BDO's findings are based on a survey conducted among more than 750 brands and agencies in the UK, Europe, the Americas and Asia-Pacific, asking marketing experts about their reflections and expectations around martech.

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