Marketing Technology Strategy: Comparing Hubs and Point Solutions

By 2018, marketers are expected to spend a whopping $32.8 billion on software (that’s up 42% compared to 2015 levels for those keeping track). With all that budget flying around, it’s no surprise that software vendors are tripping over one another to snatch up as many new customers as possible.

In fact, the 2016 version of Scott Brinker’s annual supergraphic of marketing technology includes a staggering 3,874 solutions. That’s nearly twice as many as 2015.

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With this explosion of options, the question for many marketing departments has shifted from, “Which piece of software should we buy?” to “Exactly how many marketing tools do we need?”

The two most commons ways of created a marketing tool stack are through the use of a hub, a single piece of software that encompasses most (if not all) of the needed functionality, or point solutions, multiple pieces of integrated software that combine to meet a team’s needs.

Each of these approaches has merit, and in the end it comes down to your organization’s goals and current priorities. But let’s take a look at the pros and cons of each approach so you can make the most educated decision possible when it’s time for your next marketing software purchase.

Pros and Cons of Prioritizing Point Solutions

The biggest pro in favor of point solutions is that they focus on doing one thing, and doing it really well. As the saying goes, they don’t try to boil the ocean.

Software development is hard. Getting features and functionality right takes time and effort.

Tools that can focus on getting just a few powerful features working perfectly may be easier to use (and provide better results) than a piece of hub software that’s trying to be all things to all marketers.

On the other hand, if you rely exclusively on point solutions to craft a custom marketing stack, you run the risk of spending too much time on integration and education. If you have 20 different tools, each one needs to share data seamlessly with the other 19, otherwise you’ve got useless, siloed data.

A final “fault” of point solutions isn’t really their fault at all; it’s the fault of managers who throw tools at a tactical problem without giving any thought to how the new software works in the larger technology stack.

Ups and Downs of Marketing Technology Hubs

The easy answer to the problems of point solutions has always appeared to be purchasing a larger piece of software that seems to be the answer to all our marketing technology needs.

Hubs, as a concept, are certainly appealing.

With one contract you get a suite of tools that you only have to learn once, with only a handful of integration points, and probably with customer support and/or training.

But marketing technology hubs may not live up to their hype. As Josh Dreller points out on ChiefMarTech.com, the benefits of these software suites tend to decrease over time:

Maybe in Year 1, the functionality you lose with point solutions is evened out by the hub benefits, but by Years 2 and 3, there’s no way that the individual parts of the hub can stay competitive with the innovations brought forth by the entire rest of the field. Eventually, you’re working with sub-par tools when there are best-in-class technologies available.

Marketing software hubs sound like the holy grail, but after implementation many teams find that they fall short in some areas. Forrester analyst Nate Elliot reports that 64% of marketers who use suites for their social media marketing feel that their platforms’ features and functionality live up to what was promised, while 92% of marketing say their point solutions do.

Universal Truths About Marketing Technology

Here’s the deal: both point solutions and technology hubs can work. Nobody can tell you exactly which one is right for your team, because everyone’s plans and priorities are different.

But, regardless of which path you choose, there are three universal truths you should keep in mind:

  1. The goals don’t change. We’re all basically trying to do the same two things as marketers: meet or exceed customer expectations, differentiate ourselves from the competition. All marketing technology is simply a means to these ends.
  2. Point solutions sometimes work. Point management never does. Management must see how all the technology fits together, and how they work with larger organizational goals. Otherwise the best technology in the world won’t give you a market advantage.
  3. Testing is mandatory. Yes, everyone is busy, but having the patience to carefully vet each and every new technology purchase will save you hundreds of person hours and thousands of dollars that would be lost if you had to abandon a new solution.

How Much Software Do You Really Need?

Signal reports that the average marketing stack contains 17 or more tools, so the answer is, probably, “more than you were thinking.”

Scott Brinker breaks MarTech down into six “capability clusters,” so it’s not unreasonable to assume that you’d end up selecting something from each category:

  1. Advertising and Promotion
  2. Content & Experience
  3. Social & Relationships
  4. Commerce & Sales
  5. Data
  6. Management

Of course, few tools confine themselves strictly to one capability anymore.

Marketing functions cross these boundaries with astonishing fluidity, so you’re likely to find point solutions that combine social, content, and a/b testing features because that’s how they provide the best service to users.

At the same time, you’re going to see more and more hubs that boast “plug-and-play” APIs that allow you to snap your current and future point solutions on without much fuss. Such capabilities bolster “a conglomerates claim for being the backbone of a customer’s marketing technology ecosystem.”

When configuring your own stack, keep in mind that technology is integral to modern marketing. You simply can’t get along without it.

Just make sure that whatever tools you choose, be they points or hubs, that they serve your unique objectives.

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Andrea Fryrear
About the Author:

Andrea Fryrear

Andrea loves to dissect marketing buzzwords and fads looking for the pearls of wisdom at their cores. Her favorite topic is agile marketing, which she believes holds the key to a more fulfilling (and less stressful) marketing career for individuals and a more powerful marketing department for business. When not scrutinizing the latest agile methodologies, Andrea can be found on the volleyball court, at the park with her two delightful kids, or baking “calorie-free” cookies. Connect with her on Twitter @AndreaFryrear, or on LinkedIn.




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