After years of martech companies assembling and launching all-in-one marketing suites, recent news suggests the tide has turned. Contributor and Third Door Media CEO Chris Elwell suggests what this might mean — renewed focus on single-point solutions and on the bottom line.
Two companies in the martech space made extraordinary announcements last week, which you may have read about on Marketing Land. Moz and Raven Tools decided to go back to the future and focus on search engine optimization (SEO) tools. This after having expanded into more ambitious offerings in recent years.
The about-faces signaled a shift on at least three counts. In my view, here’s what the changes of direction mean.
Getting back to basics: SEO is OK with us
“Moz is Doubling Down On Search,” CEO Sarah Bird titled her announcement post. She wrote, “after a lot of analysis and soul searching, we decided to radically simplify our strategy to re-focus on what we love and what our customers value from us: search.” She said that focus will enable the company to build better search tools.
For years, search marketing software vendors have been deemphasizing their search heritage. Moz and Raven chose to build products that extended well beyond their original focus and embraced emerging media platforms, particularly social media.
Many search-focused companies changed the way they described themselves, too. Their focus became “content marketing” or “performance marketing,” and they produced “full-service integrated suites.” Moz even changed its company name from SEOmoz in 2013.
Creating a full-service integrated suite was a bridge too far, it turned out, as Raven CEO Jon Henshaw said when announcing the company’s release of a new version of its Site Auditor software. “Everybody has to be the best at what they do,” he said. “We haven’t been the best at everything we do, and that’s what we’re trying to get back to.”
BrightEdge and Conductor (SEO tools) and Marin Software and Kenshoo (paid media management) are others that broadened their mission in an attempt to broaden their market. It is conceivable that they, too, will reconsider the wisdom of serving a broader market and refocus on search. Watch for it.
Point solutions, not suites
The decisions by Moz and Raven underscore a growing school of thought in marketing that point solutions (marketing technology software tools that do one task), rather than multi-function suites (which provide soup-to-nuts capabilities), are emerging as the preferred path for marketing executives when building their stacks.
Marketing technology guru Scott Brinker articulated the benefits of point solutions in the martech stack more than three years ago. The leading analysts in the space agree. Garter and Forrester said in recent reports that the benefits of using best-in-breed point solutions outweigh the benefits derived from full services suites, according to a recent chiefmartec.com piece by guest writer Josh Dreller.
Henshaw addressed the point directly: “We got ambitious because of our success, [and decided to] make a suite that does everything.” That led to a cloud platform called Raven Internet Marketing Tools, which included a version of Site Auditor, as well as a social monitoring tool to track social mentions, a tool for managing AdWords and another for managing content sources into WordPress, plus functions for keyword research.
Bird was equally direct: “Back in 2012, we started to invest in a broad feature set because we wanted to serve all aspects of inbound marketing. We thought it would increase retention by providing more value to customers, and also align with where we believed the industry was headed. Thus, we invested in many new directions: social media marketing, local SEO, content marketing, keyword research, on-page optimization, topic analysis, a next-generation link index, enterprise sales, customer success, ambitious infrastructure projects, events, education programs, and more. Increasing the breadth of the product suite added a lot of complexity to the business, but didn’t result in the growth we expected.“
Software companies, not media companies
In announcing the change of direction, Moz laid off about 30 percent of its team, including the community management team. There was no hint that means Moz will abandon its popular blog, but the move is an indication that Moz’s investors insisted that the company focus on its core mission of being a software company. It’s likely that content created by Moz in the future will be in the service of delivering on the company’s financial performance, rather than general support of the internet marketing community.
That’s a conclusion I expect many martech company investors will reach in the very near future. The investments in digital content and in producing in-person events — which, for most martech companies, are break-even propositions that distract companies from their core purpose for months before they happen — will be very difficult to justify and become targets for profit-minded boards.
This analysis is, of course, extremely self-serving by someone who runs a media company that does digital content and events; that doesn’t mean it’s incorrect.