The global digital marketing software market size was valued at USD 49.43 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 18.2% from 2021 to 2028. The growth of the market can be attributed to the growing preference among individuals for mobile devices to obtain information on the go and subsequently the continued transition from desktop PCs to smartphones. The growth can also be attributed to the proliferation of smartphones, which has triggered the consumption of digital media and is prompting marketers to push more online ads on social media and other digital platforms for a larger exposure and more visibility.
The outbreak of the COVID-19 pandemic, which triggered a paradigm shift in the way individuals use different apps, has had a positive impact on the market growth. As such, app developers have been particularly reviewing their advertising set-ups and improving their capabilities to push for more accountability and transparency with partners in the wake of the outbreak of the pandemic and the subsequent economic downturn. For instance, in September 2020, HubSpot, Inc. of the U.S. announced the introduction of new updates and features to its platforms for helping businesses in meeting the challenges posed by the outbreak of the pandemic. The additional features include enterprise sales CRM, expanded personalization functionality, and scalable contacts pricing models.
The continued shift from wired communication to wireless communication and subsequently the growing adoption of wireless communication devices, which is expected to trigger the consumption of digital media, also bodes well for the growth of the market over the forecast period. Advertising companies are increasingly following digital marketing channels and providing publishers with advanced advertising capabilities. As the smartphone penetration rate continues to increase, advertisers are looking forward to collaborating with social media digital marketing platforms for promotional activities and are eventually switching from conventional marketing channels to digital marketing channels.
The increasing penetration rate of smartphones and the continued rollout of high-speed mobile networks are encouraging advertisers to opt for mobile advertising. Retailers are particularly emphasizing the adoption of location-based advertising services and providing shoppers with personalized updates on products, offers, and discounts, thereby driving the demand for digital marketing significantly. Location-based advertising envisages visitors automatically receiving messages on their mobile devices notifying them about various discounts and offers upon entering malls or shopping centers. In other words, the growing usage of smartphones has opened new opportunities for marketers to engage and strengthen their relationships with customers.
The increasing internet penetration rate is encouraging marketers to adopt digital marketing solutions to expand their geographical footprint and subsequently strengthen their customer base. Some of the latest digital marketing tools include interactive chatbots, a computer program based on Machine Learning (ML)and Artificial Intelligence (AI) for simulating human conversation; tools based on AI and blockchain technologies, which can help marketers in tracking their target customers and increasing customer engagement; and influencer marketing, which envisages marketers choosing an influencer to share product experiences through social media.
Continued digitalization has revolutionized the way organizations are operating and executing their business strategies. Digital marketing software has particularly provided companies with an effective tool to connect with various stakeholders in the market through multiple channels, including email, instant messaging, and social networking. The unabated rollout of high-speed data networks and the growing popularity of social media are encouraging companies to spend aggressively on digital marketing, thereby driving the adoption of digital marketing software. Companies can leverage digital marketing software to enhance customer engagement through multiple channels, such as instant messaging, social networking, and mobile apps, among others. Digital marketing software also allows companies to integrate various digital channels and analyze advertising campaigns in real time.
However, concerns over data security and privacy protection are expected to restrain the growth of the market. Malware injections, use of insecure Application Programming Interfaces (APIs), phishing attacks, and social engineering attacks are some of the major issues surrounding cloud-based digital marketing software. As enterprises have a large data repository of business and customer data, any of the above security issues could lead to events, such as data theft and identity theft, and culminate into major losses.Solution Insights
The CRM software segment accounted for the largest revenue share of over 18% in 2020.CRM software provides various benefits, such as the ability to manage customer interactions at optimum levels, and the capability to handle large volumes of business and client information. The strong emphasis enterprises are putting on automating processes, such as sales, customer retention, and customer acquisition, is further expected to drive the growth of the segment over the forecast period. The continued integration of CRM suites with neural networks to allow companies to arrange unstructured contact data in the form of discussions, connections, and potential customers is also expected to drive the growth of the segment.
The growing usage of social media platforms, such as Instagram, Facebook, Snapchat, Twitter, and Pinterest, by the incumbents of the e-commerce industry to promote products is a major factor driving the growth of the social media segment. The growing popularity of social media has particularly transformed the channels organizations prefer using to build and strengthen relationships with customers. The continued integration of the latest technologies, such as big data analytics and AI, into social media platforms is also driving the growth of the segment. For instance, Chatbots are being used aggressively to collect, analyze, and visualize customer-related data, such as responses to particular products and services.Service Insights
The professional services segment accounted for the largest market share of over 60% in 2020. The growing need for skilled and accomplished experts holding expertise in installing, managing, and troubleshooting software is anticipated to drive the demand for professional services. Professional services allow organizations to ensure better utilization of resources, reduce administrative expenses, and augment profitability. Professional services also help organizations in improving resource management by enhancing efficiency through increased collaboration, better planning, and integrated knowledge management, thereby driving the growth of the professional services segment.
The managed services segment is anticipated 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, which are offered as part of managed services. Moreover, as the adoption of IoT-based solutions continues to gain momentum, retailers are increasingly getting concerned over the security of data and protection of privacy and are hence opting for managed services to maintain their expanding databases. The growing need for cloud-based managed services and the increasing dependence of organizations on IT assets to enhance their business productivity is also emerging as a major factor contributing to the growth of the segment.Deployment Insights
The cloud segment accounted for the largest revenue share of over 55% in 2020. Cloud-based deployment of digital marketing software adds to the flexibility and allows enterprises to customize products and services on a large scale. Cloud-based deployment also helps in improving the cost structures and setting up a control center to coordinate, monitor, and arrange various components of the digital marketing campaign. Organizations can also leverage cloud deployment to combine dedicated hosting infrastructure with virtual cloud servers. Eventually, cloud-based deployment can help organizations in reducing the costs associated with the installation of digital marketing software and the overall IT infrastructure significantly.