You Choose: In-House Or SaaS Martech Solutions?

Consumer data has arguably become the most vital element for any digital marketing campaign. Indeed, many experts even call it the new industry currencyOpens a new window .

The marketing technology sector has seen a particularly meteoric rise due to this sector-wide shift. Myriad new solutions, tools and technologies have been developed thanks to the ever-increasing amounts of user data now available.

At the same time, though, data-related mishaps and issues have led to stricter regulations such as GDPR and the California Consumer Privacy ActOpens a new window , which have brought the data privacy debate center stage. Heightened concerns regarding data securityOpens a new window — especially when buying data from third-party sources — have many marketing leaders questioning how best to manage their martech stack.

One of the biggest questions: Off-the-shelf solutions or in-house builds?

In-house martech solutions

While many organizations are prioritizing bringing their data management in-house, this trend doesn’t necessarily reflect a wider industry transition to in-house marketing technology. Rather, it’s primarily due to data privacy and data security reasons.

A recent survey conducted by Martech TodayOpens a new window found that many marketers are moving away from home-grown tools.

According to the survey results, the main reasons marketers choose SaaS software are:

• Off-the-shelf solutions offer more sophisticated features.
• Firm leaders decided their outfits are “not a software company.”
• In-house built tools cost too much to run.

Meanwhile, although data gathered and managed by third-party providers is known for privacy, control and transparency issues, a Mailjet poll found that most marketers are still worried about being exposed to potential data security risks through homegrown toolsOpens a new window . The research revealed that trust of in-house solutions was negligibly higher than that for external vendors.

Nevertheless, marketing leaders must question whether it’s worth entrusting such a vital part of their operations to external providers, no matter how reputable. Ultimately, building your own martech is the best way to ensure your data management is above board and that you’re collecting high-quality, well-secured dataOpens a new window .

It may sound like the cons outnumber the pros in this case but data security is an increasingly big deal for organizations and consumers alike.

SaaS martech solutions

Outsourcing your martech carries risks beyond privacy. Granting a single-provider solution complete control of your data management is dangerous, especially if you ever want to leave that provider.

Plus, as these third-party technologies continue to evolve, their offering and services are becoming far more advanced. While this may sound good on paper, Econsultancy released a study last year in which companies reported that their marketing teams lacked the knowledge and expertise to make the most of the available, data-driven martech.

On the other hand, the right approach to outsourcing martech can spin off major ROI boosts, another key focus for most marketing operations. Many are concluding that such new SaaS technologies present opportunities for outfits that want, as Jennifer Cannon writes, “to keep their skills relevant and transferrable as technologies evolve and change.”

This is especially important in a digital marketing segment that has exploded over the past decade. In 2012, there were just 350 martech companies. Seven years later, they number more than 7,000.

Teavaro’s Nico Pizzolato saysOpens a new window that “greater availability of cloud computing infrastructure and open-source software” has helped SaaS providers scale dynamically.

“As SaaS products improve — and natively support integrationsOpens a new window with other solutions — it’s becoming harder to justify developing or maintaining homegrown applications,” Martech Today writes. “We can expect to see more acquisitions by martech vendors as well as integrations as providers aim to give marketing teams more comprehensive, one-stop-shop solutions.”

That ability to offer all-encompassing solutions will be massive for marketers who want to stay competitive with data.

Moreover, using an external provider stops brands from relying entirely on an internal team for data-related insights and decisions which, Pizzolato says, “can lead to difficult consequences when the inevitable incorrect decisions and oversights begin to mount up.”

Finding a middle ground

There’s no question that every enterprise must take more control and ownership of their data management. But that’s still possible while working with an external service provider.

Pizolatto says that “an emerging solution is to work with a third-party integrator that brings together a seamless architecture that is tailored to business requirements, without compromising the level of control and transparency that companies now expect to have on their data.