The Three Trends Driving Ad And Martech Together (& What It Means For Adland)

The Three Trends Driving Ad And Martech Together (& What It Means For Adland)
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B&T’s been following the convergence of ad and martech (and the profound impact that it will have on agency land) pretty closely of late. In our latest instalment, agitator, Andrew Birmingham, editor of www.which-50.com, offers even more proof and some dire warnings, too…

The worlds of marketing technology and advertising technology developed in parallel for two decades. But now three important industry trends are bringing another layer and analytics to the customer experience and CMOs desire to bring platform proliferation under control.

But while the volume around the merger of these two disciplines is likely to increase in the medium term, it is important to understand that technical, structural, financial and cultural impediments remain.

For instance companies already struggling just to marry their own internal data sets together let alone integrating with a plethora of third parties. Regulatory and licencing issues around data abound, and the business models in ad tech and martech are often very different.

Then there is the small matter of industry structure. Brands typically have more direct control over their marketing technology but are more likely to work with agencies on ad tech.

But with these caveats acknowledged, what’s driving the twin pillars of a CMOs tech stack together?

Walled Gardens

Earlier this year (financial consultants) Morgan Stanley made what seemed like a bold and controversial prediction. That said that in the first quarter Facebook and Google would account for 85 percent of all the new digital advertising dollars in the US market.

Eighty. Five. Percent!

Their prediction generated a predictable response from other publishing channels although subsequent analysis by third parties based on Facebook’s and Google’s published financial results, and IAB data about ad spend tended to bear out the Morgan Stanley analysis.

While the implications for such a consolidation were clear for rival publishers, lost in the debate were the obvious implications for the ad tech sector. That so much money would consolidate around two brands with almost such extraordinary and unrivalled user data presents an existential challenge every other adtech in the market.

That has some industry leaders like Marketo’s Phil Fernandez arguing that adtech as a sector will shrink to just a handful of participants by 2020.

As companies like Google and Facebook hoover-up ever increasing percentages of the pie and they are also extending the advertising utility of their offering to try and keep their clients inside the walled garden. And with their massive trove of data they are well placed to deliver increasingly sophisticated analysts services either directly or via platform partners.

Analytics

Seamless integration at the data layer is critical for companies who wish to be able to provide sophisticated and personalised experiences for their customers and consumers. That means all data, not just advertising.

The ability to read a prospect’s digital finger prints across all their online behaviour and to respond with appropriate content at the speed of web deliver will be a critical competitive advantage to brands.

But it is no easy feat. Quite apart from the obvious technical challenges, finding staff with the capabilities to read the rarer signals in the noise is difficult, verging on impossible. Typically data scientists are earning around $120,000 a year and those with social analytics skills can command upwards of $200k a year according to research by the Institute of Analytics Professionals of Australia (IAPA).

To deliver the great customer experiences demanded by customers today companies need to tame internal information silos. But even that is not enough, they also need to allow for the free and instant flow of information across company boundaries and out to partners and suppliers.

For instance, the first party data contained in a CRM needs to be married instantly to third party data such as cookies generated by a digital advertising campaign via a services such as a data management platform.

Likewise the ability to access new data sources on demand will be just as critical.

And companies want to be able to interrogate and manage this data with as little complexity as possible and to enable it to be incorporated into all their campaign activity.

Marketing Clouds

That’s where the third big trend driving the merger of adtech and marketing tech comes together.

The last few years have seen the emergence of sophisticated platforms such as Oracle Marketing Cloud to meet the gather hew from marketers for control over the burgeoning martech and adtech space.

Scott Brinker, editor of chiefmartec.com, currently tracks 3800 companies offering solutions for marketers and he recently told attendees at the ADMA Techmix conference in Sydney that the figure could well swell to over 5000 by next year (in fact we have a bottle of Penfold’s Grange riding on it.)

Marketers want tools to manage and control the gathering complexity of their ad tech platforms.

While no one expects a single vendor to provide all the solutions from a marketing cloud its clear that CMOs have growing expectations about what they regard as core functionality and just as clearly that will include integrated advertising and marketing technology systems.

The reasons is simple enough, and best described recently by Kevin Akeroyd the GM of Oracle Marketing Cloud: “Ads are becoming customer engagement channels, they are not just ads anymore.”

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