Unified Marketing Platform vs. Point Solutions: The Ultimate Verdict

Break free of data silos! Dynamic Yield CEO Liad Agmon explains the advantages of using an integrated marketing platform instead of several point solutions for personalization.

Director of Marketing, Dynamic Yield

There are now a whopping  5,000 marketing technology vendors.  Should you purchase one unified platform or several point solutions for personalization? 

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So why would you use a unified stack versus point solutions?

First of all, you’re gonna make more money. Because if you compare machine learning algorithms, and, I would say any type of optimization or recommendation algorithm, the more data sources you have the more data the algorithm can utilize in predicting an outcome for each individual user.

So no matter how good your web recommendation engine is, for example, if it is being benchmarked against an engine that has data from your email channel, that has data from your CRM, that has third party data, it’s just going to beat it, just dollar to dollar, just gonna make more money.

An important point to consider when you’re looking at unified stacks versus point solution, is really the total cost of ownership.

There is a lot of hidden costs, when it comes to technology integrations. How do you integrate five different products? Who operates these five different products? And then, if something breaks, or you wanna measure an experience across a few channels, how do you actually do it when it’s, basically the data is siloed in five different file points.

Another important aspect of a unified stack versus a point solutions, is where is the data?

You want to centralize the data of your A/B tests, your personalization experiences, your recommendation experiences, into a single platform, you want to be able to have everything centralized, organized, because you want to future proof your experiences.

If you continue using point solutions, two years down the line, when you want to start unifying the data, you’ll find out that it’s virtually impossible because they’re all speaking different languages.

So by going unified today, you’re future proofing your data story for the next couple of years.

When Dynamic Yield was founded in 2011, the marketing technology landscape consisted of about a couple hundred scrappy enterprises. Today, that number has ballooned to nearly 5,000, leading to this Jackson Pollack infographic that has become infamous in the industry. There are officially more marketing technology providers than the number of calories the average American eats at Thanksgiving dinner or the number of dollars the average American has in her savings account.

Based on a back of the envelope LinkedIn search, there are about 10 million marketing professionals worldwide. With 5,000 companies in martech, there is a marketing technology provider for EVERY 2,000 MARKETERS on Earth.

Despite this cornucopia of vendors, only 9% of marketers say they have all the marketing technology they need and fully utilize it. Furthermore, despite the explosive growth of marketing technology, 55% of marketers say that technology is only “marginally” improving marketing performance at their company. Marketers have 5,000 quarter-inch drill-bits but still struggle to drill a quarter-inch hole. To understand why this is the case, let’s look at the different options available to them.

The Case for Point Solutions

A great irony of the MarTech 5,000 infographic is that many of the companies on it claim to be the last piece of technology a marketer will ever need. But if that is the case, why are so many new technologies appearing? Surely, the future is in hyper-specific software that perfectly addresses specific marketing pain points.

Not exactly. Barriers to entry in the marketing technology business have all but dissipated allowing for a myriad of small vendors to flood the market. We’re entering an era of “bootstrapped micro SaaS” in marketing technology with hundreds of companies under $500K ARR arising to plug the tiniest holes in the conversion funnel.

Point solutions often excel at delivering on a singular value proposition, such as triggered emails or A/B tests at reasonably low cost. For small businesses or folks with lower budgets just testing the optimization waters, this can drive strong uplift and ROI. However since enterprise-grade personalization involves several moving parts, the number of point solutions in your marketing stack can quickly balloon, presenting a serious data challenge.

The Data Advantage of a Unified Platform

Data is the nexus of the marketing ecosystem. But as marketers bring on additional point solutions, essential data on user behavior gets stuck in silos and becomes less and less actionable. With a unified technology stack, data flows freely and machine learning algorithms can serve personalized experiences, recommendations and targeted messaging based on all available consumer data, ultimately making you more money.

Let’s use recommendations as an example. Within the 5,000 marketing technology vendors, there are a myriad of product recommendations providers each claiming to have the best algorithms. They say they are powered by artificial intelligence that passed the Turing Test, completed an MBA at Harvard and can run a sub-four-minute mile uphill both ways.

But here’s the problem. With recommendations point solution providers, the algorithms only have a sliver of data that the customer leaves behind to work off of. Essentially, they can only see user data pertaining to interactions with recommendations, a mere blip in the customer journey.

Ultimately the machine learning algorithms that power recommendations (or any machine learning algorithm really) can only become “intelligent” if you give them the best textbooks to work with.  In the video above, Dynamic Yield CEO Liad Agmon elaborates: “If you compare machine learning algorithms, the algorithm with more data sources will ultimately succeed in predicting the desired outcome for each user.”

In the context of the modern customer journey, this requires an understanding of all actions a user took before and after interacting with a recommendation. Which homepage banners did a user click on? How did she arrive on a product detail page? Which incentives does this user commonly respond to?

With all of this data in tow, a unified marketing platform can decide the best recommendations strategy for each user AND serve personalized recommendations before a user interacts with a single recommendations widget based on other onsite actions. Furthermore, the data collected from engagement with recommendations can be used to personalize all other aspects of the path to purchase across devices.

Let’s say a user purchased three items after clicking on a recommendation widget. Next time that user arrives to your site via an SEM campaign, take her directly to a product page optimized for product discoverability! This type of deployment is near impossible with point solutions as it would require connecting data siloes from three or more programs but can be easily accomplished with a unified platform.

The Integration Conundrum

While point solutions can excel at solving specific siloed challenges, their utility begins to break down when we look at the holistic onsite experience.

Patching together a set of point solutions for personalization greatly hampers your team’s experience velocity and ability to act in real-time. You end up with a wad of red tape that would make the federal government jealous and a massive organizational headache. How do I integrate five different products and who operates each?

Furthermore,  Agmon argues that with a unified platform, attribution and measuring success is already modeled into the product. “Connecting the dots and synchronizing the reports comes built-in versus having to integrate a BI or reporting tool to get data from all these different points”

The same weakness applies to software that has been patched together through a series of acquisitions. Several of the world’s top technology brands have assembled such platforms and have come to market with offerings that they claim are fully unified. However, they are essentially five different products under one brand name and lack many of the data advantages discussed above.

Examining Cost Of Ownership

When thinking about the cost of ownership, it is again best to think about the context in which you are purchasing marketing technology. Do you have a hyper-specific KPI such as “decreasing bounce rate by 5%?” In that case, it might make sense to bring on a point solution at lower cost to solve your specific goal

However, if you are looking at a nebulous KPI such as “increasing average order value”, there are many elements of the digital experience (recommendations, A/B testing, messaging) that will each need their own point solution. So even if a point solution costs ⅓ of the price of a unified platform, paying for 4+ solutions will quickly increase the total cost.

“There are a lot of hidden costs when it comes to technology integrations and the biggest spend that companies have is in integrations, operations, and user education”, says Agmon. “Learning how to use a single platform is way more efficient than learning how to use five different products”

In addition to the pain of learning different software programs, managing vendor bloat has a massive utility cost. Think about the collective hours spent handling contracts, sitting on weekly check-in calls, and limping through piecemeal integrations. Hell, your marketing and e-commerce managers probably lose five hours a month just scheduling time to connect with different vendor reps!

The Verdict

All fancy jargon about a unified customer journey aside, the core benefit here of a unified platform is simply that it makes marketers more money. Ingesting data from website behavior, email interaction and CRM, simply helps recommendations and other personalization deployments perform better dollar for dollar.

Though personalization is an $800 billion industry, it doesn’t require an extensive set of different point solutions to individualize digital experiences for each user. With the cohesive data set that a unified personalization technology platform provides, you can increase revenue, lower total cost of ownership and boost your team’s ability to deliver a superior experience to your customers.

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