The beginnings of digital marketing technology can be traced back to the 1980s, when computers became sophisticated enough to store huge volumes of customer information. This shift in technology corresponded with a shift in mindset from pushing product to “relationship marketing,” which prioritized customer connections. Marketers abandoned their limited offline techniques like list brokering in favor of database marketing. Pioneered by Robert and Kate Kestnbaum, database marketers kept an electronic database of customers, prospects, and all commercial contacts. By 1986, ACT!, a contact and customer management company, introduced the first database marketing software to the business world. It was essentially a digital rolodex, only it could store large volumes of customer contact information.
The number of Internet users worldwide in 1995.
The average time Americans spent online in 1996.
Users who checked AOL.com regularly in 1998.
CRM software, a system for tracking interactions with current and future customers, exploded in the 1990s.
In it’s earliest form, CRM -- then called Sales Force Automation, or SFA -- automated the features of database marketing, including interaction tracking and inventory control, providing companies with more useful customer information.
Early innovators included Brock Control Systems, Unica and Tom Siebel. Seibel left Oracle to found Siebel Systems, which became the leading SFA provider in the early 90s market.
CRM went through a massive overhaul in the late 1990s when vendors like Oracle, SAP, and Baan entered the market. This competition compelled vendors to expand their service offering to include marketing, sales and, and service applications.
In 1999, the crowded CRM landscape consolidated significantly thanks to a number of high-value acquisitions. And with the birth of the Internet, emerging eCRM vendors, which allowed marketers to support vast amounts of customer data online, maximized the competition in the landscape.
Instead of feeding information into a static database for future reference, eCRM players in the dotcom era like Broadbase and Kana, allowed marketers to continuously update customer understanding of customer needs, and prioritize their experience.
But with this advanced new technology came new challenges. Marketers found that they were data rich and information poor. They could track and store a lot of customer information. But didn’t have the support to make sense of it all.
|Customer Contacts||Contact with customer made through the retail store, phone, and fax.||All of the traditional methods are used in addition to Internet, email, wireless, and PDA technologies.|
|System Interface||Implements the use of ERP systems, emphasis is on the back-end.||Geared more toward front end, which interacts with the back-end through use of ERP systems, data warehouses, and data marts.|
|Client Systems||Client must download various applications to view the web-enabled applications.||No download requirements because the client uses the browser.|
|Personalization of information||Views differ based on the audience, and personalized views are not available. Individual personalization requires program changes.||Personalized individual views based on purchase history and preferences. Individual has ability to customize view.|
|System Focus||Created for internal use, the system designed based on job function and products.||Created for external use, the system is designed based on customer needs.|
That trend changed in 1999 with the birth of the first Software-as-a-Service (SaaS) company, Salesforce.com.
Scott Brinker, marketing technologist, co-founder, and CTO of ion interactive, inc., says that “Salesforce shifted the trajectory of software as a service offering.”
Salesforce was the first company to deliver business applications from a website, now commonly called “cloud computing.” This web-centric model served as the blueprint for the future of marketing technology.
558 million Internet users worldwide.
The iPhone is born.
Google goes public.
Yet new marketing technology companies continue to flood the space every day, serving the younger subcategories of video, social, search, paid ads, influencer marketing, content management, and more.
What’s going on? Scott Brinker attributes this apparent contradiction to integration opportunities:
Currently, the diversification rate far-surpasses the consolidation rate. In just three years, the number of marketing technology vendors has grown from ~100 to ~1,876.