4 Trends Shaping the ESP Vendor Landscape for 2022

The recent announcement that Cheetah Digital and CM Group (Sailthru, Selligent, Campaign Monitor, etc.) are combining forces is just the latest example of the changes rippling through the ESP vendor landscape over the last several years. In the last 12 months, dating back to November 2020, we have witnessed the following:

• November (2020): CM Group announces acquisition of Selligent Marketing Cloud.
• March: Oracle confirms “end of life” for the Bronto platform as of May, 2022.
• April: Adobe launches Adobe Journey Optimizer, a “from the ground up” new platform built natively on Adobe Experience Platform.
• May: Klaviyo announces it has raised another $320 million in a Series D round of funding.
• June: Iterable announces it has raised another $200 million in a Series E funding round.
• September: Intuit acquires SMB ESP Mailchimp.
• October: Sinch, a Swedish competitor of Twilio’s, signs a definitive deal to acquire Pathwire, the cloud-based email provider behind Mailgun, Mailjet, and Email on Acid.

I am sure there are some things I have missed, but this list is not meant to be comprehensive, rather it is intended to illustrate the constant changes in the vendor landscape that brands must navigate whenever they decide to look at options beyond their current ESP partner. And I expect 2022 to bring as much change and action to the landscape as we have come to expect from such a dynamic piece of the martech stack. 

At this point, there are 4 trends I am seeing that are going to have the biggest impact on what we can expect in 2022. I have talked and written about some of these already this year, but this is the first time I have presented them collectively in a single look at the landscape. 

1. The Evolving Definition of “ESP”
In recent times it seems that legacy ESPs have stopped using the term “ESP” to describe their platforms.  Look on their websites—you will not see those letters.  Instead, you find descriptions like: Enterprise Marketing Software Suite, Cross-channel Campaign Management, Customer Engagement Solution…. it goes on and on. There is a key reason why this has taken place—the big legacy platforms want to speak and appeal to the C-Suite. In their opinion, the C-Suite is not interested in email marketing (they are right about that), so they need to elevate the conversation to things like business transformation and customer obsession. 

What these vendors do not recognize is that because the C-Suite is not interested in email, they do not see the need to get involved in the process of selecting email platforms. The suits leave that decision to IT and the actual email marketing team at their companies. And guess what?  Both teams continue to think of these platforms as “ESPs”. Does that mean they think in terms of ESP 2010?  Of course not!  In the eyes of the email marketing professionals at brands, the ESP platforms have undergone steady and continuous innovation and expansion over the last 10+ years.

In the opinion of these folks, modern enterprise ESPs are expected and assumed to have all of the following capabilities:

1. Promotional/broadcast email marketing
2. Marketing automation: triggers/journeys/automations
3. Multichannel orchestration: SMS/MMS, push to app, mobile push, social connections

Pushing the definition of ESP even further is the emergence of new email platforms, aka “next gen” platforms. We will take a closer look at “next gen” platforms in the next section. 

2. Changing of the Guard 
If we were able to hop into a time machine and go back to 2008-2009, we would see a very different vendor landscape than we see today. Some of the same players are still around, but there would be a lot of names you might not recognize. 2008 was a few years after the first wave of ESP acquisitions, where companies known collectively as MSPs (marketing service providers) followed one another into acquiring an ESP. Acxiom bought Digital Impact, Experian bought CheetahMail, Epsilon bought Bigfoot Interactive, and so on.

In 2008-2009, the industry saw the rapid growth of a new group of email point solutions, including ExactTarget, Responsys, and e-Dialog. These new ESPs were seen by many brands as being more innovative, leading in new features and functionality. At the same time, there was the growing perception that innovation had stalled or stopped at the MSP ESPs. They were perceived as starting to sound and look the same. The rapid growth of these new ESPs led to the second wave of ESP acquisitions when the Marketing Clouds followed one another in acquiring one. Salesforce acquired ExactTarget, Oracle acquired Responsys, and so on.

Fast forward to today, and there are a lot of indicators that we are in the middle of a second “Changing of the Guard”. Once again, old established legacy ESPs are facing new competition from a number of upstart ESPs, who until recently, did not compete much in the enterprise space. That has started to change over the last couple of years, and the reasons are much the same as they were in 2008-2009.  The new wave of “next gen” ESPs are again seen by many email marketers as being more innovative and leading the way in new features and functionality.

There are a couple of defining features of today’s “next gen” platforms:

1. The architecture redefines how we think about email platforms: That includes hybrid solutions that connect an on-premises application to cloud-based delivery (there is no synching or moving data). Others offer flexible, real-time platforms that can activate unlimited amounts of customer data up-to-the-second and connect with complex business data. In short, there is a lot of new tech associated with the “next gen” platforms.
   
   
2. The company invests in email rather than around it: Many legacy platforms tend to limit investment in actual email features and functionality, preferring to focus on expanding the overall martech offering while “next gen” companies tend to attract investment that they put back into the platform.

So, if history is again repeating itself, and we are in the midst of another “Changing of the Guard”, it will mean that a different and evolving mix of platforms will be invited to the major enterprise RFPs in 2022. We are already seeing it in the RFPs we manage for brands in 2021, and we are in fact a proponent of brands looking outside of the usual suspects. But everything in moderation, as they say. In your next RFP there is a place for both “next gen” and legacy platforms in the mix—it is not one or the other.

3. CDP “Inside”
Hard to believe that it has only been a few years since these platforms emerged from the martech mists to become the next “must-have” martech platform for a lot of brands. But since Day 1, the degree of overlap between the CDPs and some of the leading ESPs was poorly understood if recognized at all. What happened?  Those brands that rushed into CDP adoption often ended up “over-platformed”, meaning they were paying two different vendors for many of the same features and functions.

Because of this simple fact, I believe that brands that will be considering adding a CDP in 2022 should first take a very close look at their existing ESP platform. What are you looking for from a CDP that you are not getting from your ESP already?  Depending on your ESP and your own unique requirements, your answer could range anywhere from “not very much” to “a whole lot”, or anywhere in between. 

There are a couple of reasons why that might be the case. First, there are several ESPs who now come with what I call a “CDP Inside”. In other words, they have built a fully integrated CDP platform to go along with the ESP platform.  Second, there are many ESPs that share many of the same characteristics of a CDP without necessarily covering all of the bases completely. But you might not need to have all the bases covered, in which case a solid ESP is all you need. 

Other brands might decide that 2022 is a good time to look at both changing ESPs and adding a CDP. But if you are going to look at both next year (or are doing so right now) which comes first? If you were to ask me, I would tell you it is critical that your ESP come before your CDP decision. There is not a CDP in existence that can send high-volume email campaigns and automated/triggered emails (though some will say they can—and do it very badly). This means that if you start with the selection of a CDP, you are always going to need to add a new ESP.  But—and this is the critical thing to remember—if you start your search for the right ESP before looking at CDPs, you may not need a CDP at all—see the previous paragraph!

4. Loyalty + Email Marketing
Long-time fans of the Only Influencers blog might remember that I first posted about this here in August of this year. In my original post, I wrote that despite the enormous synergy between them, email marketing and loyalty marketing have historically been distinctly different parts of brand organizations. And the relationship between them was mainly one way—email marketing was used to help the loyalty program. But in an era where, as I wrote in August, first and zero-party data are rising in importance for marketers, perhaps it is time for the email marketing team to ask, “how can the loyalty program benefit my email marketing?”.  

For brands looking at their ESP platform options in 2022, the question “how can an ESP help me access first and zero-party data?” should be part of the consideration in making a selection. The good news is that several vendors in the ESP landscape have already been asking that question and have loyalty solutions to work side-by-side with their ESP platforms. Going into the new year, more ESPs are taking note of this trend and making their own plans for the provision of first and zero-party data, either through partnerships and integrations with existing loyalty vendors or through buying or building out their own loyalty solutions.

Final Thoughts
When I started helping brands through the ESP vendor selection process back in 2012, I did so because I thought the vendor landscape had become so complex that it was harder and harder for brands to sort through their options. Little did I know that compared to what is coming in 2022, 2012 was a walk in the park!

But that also means it is a great time to be an email marketer! Your options continue to grow, vendors continue to innovate, and consumers continue to make email the highest ROI channel. So get through the high-volume holiday season, take a deep breath, and then get ready for a lot more email action in 2022!  I can’t wait!

Photo by Ross Findon on Unsplash