The global digital marketing software market size was valued at USD 43.8 billion in 2019 and is expected to register a CAGR of 17.4% from 2020 to 2027. Digital marketing software allows companies to build and strengthen their customer relationship using multiple digital marketing channels. The various digital marketing software tools include email software, web analytics, Customer Relationship Management (CRM), and market automation software. These tools enable companies to improve customer interaction through various sources, such as social networking sites and instant messaging services. Furthermore, the growth of the market for digital marketing software can be attributed to the growing trend of location-based advertising, video advertising, and social media advertising.
Retailers are emphasizing the adoption of location-based advertising services to engage customers by providing them personalized updates on products, offers, and discounts, which is significantly driving the demand for digital marketing. For instance, when visitors enter a mall or shopping center, they automatically receive messages on their mobile devices that notify them about various discounts and offers. The increasing penetration of smartphones and the development of high-speed mobile networks such as 3G and LTE has resulted in a rise in demand for mobile advertising. The growing usage of smartphones has opened new opportunities for marketers to build a relationship with their customers.
The digital era has revolutionized the way organizations are executing their business strategies and operations. Digital marketing software has provided companies an effective tool to connect with its various stakeholders in the market through multiple channels such as email, instant messaging, and social networking. The rapid penetration of the internet, increasing usage of social media, and the ensuing increase in spending on digital marketing by companies are driving the adoption of digital marketing software. The software enables companies to strengthen customer engagement using multiple channels, such as instant messaging, social networking, and mobile apps. It also helps companies to integrate various digital channels and analyze their advertising campaigns in real-time.
The continued digitalization is allowing marketers and companies to connect with the consumers directly, provide customized solutions, and enhance the user experience. At the same time, as a result of the intensifying competition, marketing strategies are evolving from selling to customer satisfaction and retention. The data aggregated through online marketing campaigns can be utilized to analyze consumer behavior and preferences. The insights derived from the aggregated data can be utilized to recognize buying patterns and can be further customized further to optimize marketing campaigns.
Although digital marketing software provides a large number of advantages, security issues related to data access by unauthorized users is a major factor that has negatively impact the market. These issues include the use of insecure Application Programming Interfaces (APIs), a rise in malware injections, phishing, and social engineering attacks that are more frequent in cloud-based digital marketing software. As enterprises have a large data repository that contains business and customer data, any of the above security issues could result in a major loss. However, companies in the market are emphasizing on enhancing the security of digital marketing software, which is expected to negate the threat of security issues. For instance, in August 2018, Adobe Systems Incorporated announced an update of its email marketing platform, introducing new capabilities such as dynamic reporting, engagement insights, and enhanced security.
The outbreak of COVID-19 has resulted in a rise in the number of people staying indoors that have resulted in an increased need for entertainment, resulting in high consumption of the internet. This is likely to impact the way companies market their products. As governments across the globe have urged their citizens to stay home and have mandated social distancing, people are socializing through online networking. This has resulted in a rise in social media marketing activities. According to research conducted by Singular (marketing and advertisement agency), there has been a 29% increase in social media marketing activities in March 2020, as compared to the previous quarter.
The declining brick-and-mortar retail, which comprises over 85% of retail sales in the U.S., could shift day-to-day shopping to digital channels, such as Amazon and Walmart. It will result in marketers focusing on maintaining the presence of omnichannel by detecting the most preferred channels of customers and send personalized messages to only those channels. It is likely to affect the demand for marketing automation software. In the wake of the rise in the coronavirus-driven event cancellations, marketers are revaluating the way through which they distribute digital content and emulate the personalized experiences provided by live events. This could result in an increased emphasis on account-based marketing strategies in which marketers tailor digital marketing content specific to their potential customers.
The growing trend of remote working and collaborative approach has resulted in shifting the focus of marketing campaigners towards social media, search engines, and media websites. They are leveraging the increased demand for streaming services such as Amazon Prime, Netflix, and Hulu. In Italy, the number of first-time installations of Netflix was up by more than 57% in March 2020. The significant advantage of digital marketing is that it is measurable. Digital marketing software enables marketers to obtain a clear picture of their Return on Investment (ROI), spending, and activities that generate the highest number of quality leads and at the expense incurred.
The CRM software segment accounted for a significant revenue share in the market for digital marketing software in 2019. This is owing to benefits provided such as the ability to manage customer interactions at optimum levels, and the capability to handle large businesses and client information. CRM helps enterprises to communicate with their customers more efficiently and helps in the conversion of customer data into insightful content. Additionally, the increasing demand from enterprises to automate processes such as sales, customer retention, and customer acquisition is further expected to drive the segment. Furthermore, the growth of the CRM segment is boosted by the integration of CRM suites with neural networks enabling companies to arrange the unstructured contact data in the form of discussions, connections, and potential customers.
The increasing usage of social media platforms such as Facebook, Instagram, Snapchat, Pinterest, and Twitter, from the e-commerce sector for promoting their products is a major factor attributable to the significant growth of the social media segment. Furthermore, the increased use of social media has transformed the channels through which organizations build relationships with customers. Moreover, the integration of technologies such as artificial intelligence and big data analytics into social media platforms has significantly boosted the growth of the segment. For instance, Chatbots are used to collect, analyze, and visualize customer-related data, such as responses to particular products and services.
The professional services segment dominated the digital marketing software market in 2019 owing to the constant need for skilled and accomplished experts that facilitate in installing, troubleshooting, and managing the software. Professional services help users to mitigate security gaps and improve the overall security measures for the implementation of digital marketing software. Key benefits offered by professional services include reduced administrative expenses, increased utilization of resources, and increased profitability. In addition, professional services help improve resource management by increasing efficiency through increased collaboration, better planning, and integrated knowledge management.
The managed services segment is expected to emerge as the fastest growing segment over the forecast period. The growth of the managed services segment can be attributed to the additional features, such as remote monitoring and cost-effective management of IT infrastructure through subscription-based pricing models offered as part of the managed services. Moreover, as IoT in retail is gaining momentum, retailers are continuously facing rising data security threats. As a result, to maintain the expanding database, companies in the retail sector are adopting managed services. Furthermore, the growing need for cloud-based managed services and the increasing dependence of organizations on IT assets to enhance their business productivity is a major factor affecting the growth of the segment.
The cloud segment dominated the market in 2019 owing to the fact that the deployment of digital marketing software through cloud adds to the flexibility and allows one to customize products and services on a large scale. Furthermore, cloud-based deployment helps in improving cost structures and setting up a control center to coordinate, monitor, and arrange various components of the digital marketing campaign. It also enables the company to have effective control over the various campaigns being operated through multiple locations. It improves process visibility, thereby facilitating better decision-making, improving process efficiency, and ensuring a prompt digital marketing campaign analysis. Cloud deployment further allows organizations to use a combination of dedicated hosting infrastructure and virtual cloud servers. As a result, organizations can significantly reduce the costs associated with the installation of digital marketing software and hardware infrastructure.
The on-premise segment is anticipated to witness a high CAGR as a result of the security benefits provided by the on-premise deployment model. Different organizations have adopted the on-premise type of deployment as it does not require an internet connection and allows easy customization of software as per the client’s business processes. On-premise software can be installed directly on the user’s computer or server, which enables them to retain the design data on their system. End users operating in highly regulated industries and sectors such as BFSI, and healthcare are more likely to opt for on-premise deployment, affecting the growth of the segment.
The BFSI segment dominated the market in 2019 owing to the fact that the BFSI industry is using digital marketing software, e-commerce, and other similar functionalities, including statement generation and automatic notifications. In the BFSI sector, CRM software provides a single unified view of each customer making it possible to deliver personalized services for each individual customer such as account openings and real-time loan approvals. Furthermore, marketing automation allows brands to maintain an omnichannel presence by detecting the most favored channels of a customer and send personalized messages to only those channels. Retail banking and financial institutions are increasingly using location-based advertising for enhancing consumer engagement.
Media and entertainment companies are also focusing on developing online advertising strategies as part of their efforts to cash in on the proliferation of the internet and smartphones. Media and entertainment companies such as Netflix, Inc.; Star India; and The Walt Disney Company are emphasizing the use of social media advertising to acquaint people with various shows and movies. Furthermore, the incumbents in the gaming industries such as Rovio Entertainment Corporation; Activision Publishing, Inc.; and Electronic Arts Inc.; are focusing on the increased adoption of social media and video sharing platforms for targeting potential customer. This, in turn, is significantly increasing the growth of the segment in the market for digital marketing software. For instance, in February 2019, Epic Games, Inc. signed a contract with YouTube for displaying the advertisement of Epic Games, Inc.'s online role-playing video game - Fortnite, on YouTube.
The large enterprise segment dominated the market in 2019 owing to the rising adoption of digital marketing software such as CRM, email marketing, and content management for efficiently managing the vast databases of customers. Large enterprises are increasingly adopting CRM software that helps them track their return on investments and improve the efficiency of their sales cycle. Furthermore, large enterprises are leveraging digital marketing software to manage the enormous resources from numerous sources such as websites, social media platforms, and emails. Moreover, large enterprises in sectors such as automotive, healthcare, and hospitality, are adopting marketing automation software for tasks such as customer lifecycle marketing and lead generation management. This, in turn, is driving the growth of the segment in the market for digital marketing software.
The small and medium enterprises segment is anticipated to grow significantly over the next eight years owing to a rise in the number of small and medium enterprises in countries such as China, India, and Singapore. The increasing role of government in the provision of funds to small and medium enterprises for the adoption of digital marketing software is further expected to drive the growth of the segment. For instance, under the Small Business Digital Grants program, the Australian government provides funds to small and medium enterprises to adopt digital technologies and services. Besides, the lower deployment costs of cloud-based software are attracting small and medium enterprises, which bodes well for the growth of the market for digital marketing software. Small and medium enterprises often lack the financial resources required to launch expensive and mass media-driven advertising campaigns. Hence, such enterprises are aggressively adopting cost-effective online advertising strategies in order to remain competitive in the rapidly-evolving business environment as well as to challenge the larger players in the market for digital marketing software.
In North America, the market for digital marketing software accounted for a significant revenue share in 2019. This is owing to the fact that major companies and brands are finding a broader target audience to promote their content and market their products and services online. The consumers’ growing preference for online shopping is also expected to open opportunities for advertisers to market their products online. This, in turn, is driving the growth of the market for digital marketing software in the region. In North America, various associations and organizations such as the Cloud Native Computing Foundation and the National Cloud Technologists Association are promoting the use of cloud computing for the deployment of various high-tech solutions such as CRM, content management, and marketing automation on cloud platforms. Moreover, the region is home to prominent players in the market, such as Oracle Corporation, IBM Corporation, and Microsoft Corporation, that bodes well for the market for digital marketing software.
However, in Asia Pacific, the market for digital marketing software is expected to experience considerable growth over the next eight years. The region is characterized by high population density, proliferation of the internet, and the growing popularity of smartphones. Moreover, a large proportion of smartphone users in the region are accessing social media through their mobile devices. Hence, the region offers immense opportunities for online advertising. The on-going promotion of digital marketing software in the region through campaigns such as Digital Marking Summit Asia is expected to drive the market in the region over the forecast period.
There are several players active in the market, including established players having worldwide operations as well as regional and local market players catering to a limited number of clients. Thus, the market for digital marketing software is highly fragmented and is characterized by intense competitive rivalry. The prominent players in the market include Adobe, Inc.; Hewlett Packard Enterprise Company; Hubspot, Inc.; IBM Corporation; Marketo, Inc.; Microsoft Corporation; Oracle Corporation; Salesforce.com, Inc.; SAP SE; and SAS Institute, Inc. In response to the intensifying competition, some of the players are upgrading the existing products and are launching new products. For instance, in November 2017, Salesforce.com, Inc. launched the new Sales Cloud Einstein Forecasting CRM software that uses a self-learning algorithm to provide sales forecasts and optimize the advertising strategies.
Market incumbents are also tweaking their business strategies in line with the proliferation of smartphones and the growing preference for personalized advertising. Moreover, market players are undertaking various strategic initiatives, such as partnerships and acquisitions. For instance, in September 2017, Oracle Corporation partnered with Tencent - a leading social media company well known for its WeChat Social media platform. The partnership will enable Oracle Corporation’s clients to use their digital marketing software to deliver personalized advertisements to their potential customers.
Base year for estimation
Actual estimates/Historical data
2016 - 2018
2020 - 2027
Revenue in USD Million and CAGR from 2020 to 2027
North America, Europe, Asia Pacific, Latin America, and MEA
U.S., Canada, U.K., Germany, France, India, Japan, China, and Brazil
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
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This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global digital marketing software market report based on solution, service, deployment, enterprise size, end use, and region:
Solution Outlook (Revenue, USD Million, 2016 - 2027)
Service Outlook (Revenue, USD Million, 2016 - 2027)
Deployment Outlook (Revenue, USD Million, 2016 - 2027)
Enterprise Size Outlook (Revenue, USD Million, 2016 - 2027)
Small & Medium Enterprises (SMEs)
End-use Outlook (Revenue, USD Million, 2016 - 2027)
Media & Entertainment
Regional Outlook (Revenue, USD Million, 2016 - 2027)
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Covid19 driven marketing event cancellations are expected to force marketers to explore digital alternatives. This is likely to boost the adoption of digital marketing platforms, as companies try to deliver personalized experiences to customers remotely. We are continuously monitoring the market dynamics and trying to assess the impact of Covid19 on the demand for digital marketing software. The report will account for Covid-19 as a key market contributor.