Report:
Magic Quadrant for Personalization Engines
How does Gartner define the Personalization Engines market in 2023?
Gartner defines personalization engines as technology that enables marketing professionals to identify, set up, conduct and measure the optimum experience for an individual based on knowledge about them, their intent and context. Personalization engines apply context about individual users and their circumstances to select, tailor and deliver messaging such as content, offers and other interactions through various digital channels in support of three use cases: Marketing (delivering the right message to the right audience in the right context to maximize marketing and advertising performance), Digital commerce (tailoring content, offers, recommendations and experiences across digital sales channels to increase conversion and revenue growth), and Service and support (using customer insight, journey context and user feedback to customize online and offline experiences to reduce customer effort or increase satisfaction and advocacy).
Key Facts for Magic Quadrant for Personalization Engines in 2023
- Publication Date: 6 September 2023
- Document ID: G00776378
- Coverage: Global
- Authors: Jason McNellis, Joseph Enever
- Core Purpose: Personalization remains a priority for marketers. Relevant and timely messaging is key to educating customers, building consideration and boosting conversions. Use this research to evaluate vendors' anonymous-personalization capabilities, new AI features and support across the customer life cycle.
Strategic Planning Assumptions
No strategic planning assumptions provided.
How was the Personalization Engines market evolved in 2023?
- Personalization continues to be an important objective for marketing leaders, with 48% planning to create enhanced digital commerce experiences through personalization over the next 18 months
- 67% of brand leaders report their ROI expectations were exceeded when delivering personalized, contextualized brand messages
- Only 28% of marketing technology leaders have what they need to successfully orchestrate new personalized journeys across multiple channels and touchpoints
- 26% of marketing technology leaders identified critical gaps in technology
- Personalization platforms have one of the lowest utilization rates of all technology solutions
- More than one-third (34%) of consumers would rather give up personalized experiences than have their digital behaviors tracked, up from 25% in 2021
- The number of vendors qualifying for this year's Magic Quadrant fell from 13 to 10 due to evaluation criteria changes and product consolidations
What product features are required to be included in this year's evaluation?
- In-session behavior tracking, data collection and ingestion
- Triggering interactions in real time based on individuals' actions, context, data or a combination of the three
- Flexible user segmentation across known and inferred values to support personalization rules, including responding to contextual data and user feedback
- Extensive testing capabilities, including the ability to test a wide variety of personalization elements and tactics
- Predictive analytic capabilities that minimally support content and product recommendations; these include predicted affinities or other values that can be used in audience targeting and triggering
- Personalization performance tracking, measurement and reporting
What are the common features of top products in the Personalization Engines space?
- Support for account-based data structures to support more complex B2B relationships and account-based marketing (ABM) strategies
- Automated machine learning capabilities that improve personalization outcomes, such as identifying underperforming audiences and recommending specific actions to improve outcomes
- Customer feedback survey design and execution
- Customer and prospect data unification and profile management from marketing and other data sources
Scope Exclusions
- Vendors whose personalization capabilities require the purchase of additional vendor products (not stand-alone)
- Vendors without native integration capabilities with third-party products
- Vendors with over 85% of revenue from retail industry only
- Vendors without all required native capabilities (testing, discovery, product/content promotion, targeting, triggering, customer experience support, measurement/reporting)
- Vendors with less than $20 million annual software revenue
- Vendors with fewer than 25 net new deployments AND less than 20% YoY growth
Inclusion Criteria
Vendors must, among other requirements:
- Stand-alone personalization engine product that can be purchased and used without requiring additional vendor products
- Must integrate with other vendors' products (e.g., CMS, multichannel marketing hub, digital commerce platform, analytics solution)
- At least 20% of personalization engine revenue from nonretail industries
- Native testing capabilities including A/B/n test, multivariate, bandit algorithms with visual editor
- Native discovery capabilities for personalized site search, navigation and/or interactive engagement
- Native product and content promotion through personalized recommendations (both rule-based and algorithmic)
- Native targeting with decision engine using profile, behavioral and contextual data
- Native triggering capabilities for real-time personalized experiences across channels
- Native customer experience support beyond marketing/commerce for service and support use cases
- Native measurement and reporting capabilities
- Annual software revenue of $20 million or greater for fiscal year 2022
- Minimum of 25 net new customer deployments in 2022, OR minimum of 20% YoY growth in 2022
Ability to Execute — Relative Weighting
- Product or Service - High
- Overall Viability - Medium
- Sales Execution/Pricing - Medium
- Market Responsiveness/Record - Low
- Marketing Execution - Low
- Customer Experience - Medium
- Operations - Low
Completeness of Vision — Relative Weighting
- Market Understanding - High
- Marketing Strategy - Medium
- Sales Strategy - Low
- Offering (Product) Strategy - High
- Business Model - Low
- Vertical/Industry Strategy - Medium
- Innovation - Medium
- Geographic Strategy - Low
FAQs
Q: What does this research cover?
A: This research evaluates personalization engine vendors based on their ability to execute and completeness of vision. It covers vendors offering stand-alone personalization software that enables marketing professionals to identify, set up, conduct and measure optimum experiences across three use cases: marketing (delivering the right message to the right audience), digital commerce (tailoring content, offers, and recommendations), and service and support (customizing experiences to reduce customer effort or increase satisfaction). The evaluation includes standard capabilities like behavior tracking, real-time triggering, user segmentation, testing, predictive analytics, and measurement/reporting, as well as optional capabilities like account-based data structures, automated machine learning, customer feedback surveys, and data unification.
Q: Who should use this research?
A: Marketing professionals, marketing technology leaders, and digital commerce professionals should use this research when evaluating personalization engine vendors. It is particularly valuable for those looking to assess vendors' anonymous-personalization capabilities, new AI features, and support across the customer life cycle. The research should be used in conjunction with the companion Critical Capabilities for Personalization Engines research, analysis publications related to personalization best practices, and Gartner's analyst inquiry service for specific tool selection decisions. Organizations at different stages of personalization maturity can use this to understand which vendors align with their strategic ambitions, technology stack, and use case requirements.
Q: What are the mandatory features of vendors included in this market?
A: Mandatory features include: in-session behavior tracking and data ingestion; real-time triggering based on actions, context and data; flexible user segmentation across known and inferred values; extensive testing capabilities (A/B/n, multivariate, bandit algorithms); predictive analytics for content and product recommendations with predicted affinities for targeting; and personalization performance tracking, measurement and reporting. All features must be available natively through an interface targeted at marketers.
Q: What are some reasons for not being included in this report?
A:
- Personalization engine not available as a stand-alone product
- Requires purchase of additional vendor products to meet capability requirements
- Over 80% of revenue concentrated in retail industry
- Missing required native capabilities in testing, discovery, promotion, targeting, triggering, customer experience support, or measurement
- Annual software revenue below $20 million
- Insufficient market presence (fewer than 25 new deployments AND less than 20% growth)
- Product capabilities not generally available as of January 31, 2023
Q: What differentiates Ability to Execute vs. Completeness of Vision?
A: Ability to Execute evaluates vendors on current capabilities and market execution, focusing heavily on product/service quality, viability, and customer experience. It measures how well vendors deliver and support their solutions today. Completeness of Vision assesses vendors' future strategy and innovation, with high emphasis on market understanding and product strategy. It evaluates how well vendors anticipate market needs and position themselves for future success through innovation, vertical strategies, and business model effectiveness.
Reference
- Gartner, Magic Quadrant for Personalization Engines, 6 September 2023, ID G00776378
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