Martech and ad tech: Challenges and opportunities
What's ahead for ad tech in the larger martech environment? Columnist Jim Yu lays out the difficulties, as well as the potential rewards.
The industry is abuzz with discussion about the unification of ad tech data with data from other marketing technologies.
For some, a potential merger means finding ways to use data from martech to power ad tech. Others see massive differences between the two types of technologies and predict synergy by way of hybrid solutions that combine elements of each within a single piece of software.
Private equity and venture capitalist database Pitchbook is now tracking solutions like this as a standalone industry segment, one in which US VCs invested $290 million last year.
[Editor’s note: On MarTech Today, we see ad tech as a subset of martech, as advertising is a part of a brand’s overall marketing activities. For the purposes of this column, the author’s references to “martech” should be understood to refer to non-ad tech martech.]
In this column, we’ll have a look at the relationship between martech and ad tech and look at some of the synergies between the two, identifying the greatest opportunities for connecting ad tech with martech to engage consumers going forward.
Martech & ad tech: Two sides of the same coin?
How are ad tech and other marketing technologies different? Many would say that advertising, and therefore ad tech, is about buying media for exposure to potential customers, while other parts of marketing guide our understanding of and communications with identifiable people — our prospects and customers.
These technologies are simply enablers and amplifiers of what we have always aimed to achieve in marketing and advertising. And ultimately, advertising and other forms of marketing have the same goal: driving sales.
We’ve had it drilled into our heads that ad tech is for media buys and martech for personalization; that ad tech is for paid media and martech for owned. But in a recent column, martech guru Scott Brinker explored how the differences are fading.
The tools we use to manage ads on social media networks aren’t considered ad tech, Brinker points out. Paid influencer marketing like Famebit isn’t considered ad tech, either.
On the other side of that coin, the data management platforms (DMPs) we’ve long considered ad tech tools are now being used to personalize owned media. It’s in these intersections where the most powerful and truly interesting outcomes are happening.
This convergence is where martech’s individualized datasets are being used to drive more meaningful and personalized paid interactions.
So what are we really talking about, then? Is this the dawn of a new age in ad-mar-tech, where the lines will become so blurred they’ll merge into one discipline? Definitely maybe.
The humans of martech & ad tech
People don’t consume media in silos; they’re interacting with companies across multiple touchpoints and platforms, each on their own path to purchase. They don’t know or care about the differences between ad tech and other marketing technologies, and they expect to hear a coherent brand message everywhere.
Unfortunately, the industry has been organized in such a way that the left hand doesn’t talk to the right, when it comes to marketing and advertising. Breaking down these barriers is going to be far more challenging than finding solutions that marry ad tech and martech together. Those solutions are already coming to market. A single, comprehensive solution may be some time off, so you’re still going to be working within both a marketing and an advertising stack, but convergence is inevitable.
The greatest opportunity, then, lies with the people using these new hybrid tools to drive ad tech with martech data. Both ad tech and martech automate and give scale to the intelligent, informed decisions of their operators. This will not change as ad tech becomes more closely aligned with the rest of the martech ecosystem.
Organizations seeking to completely integrate both functions (think larger brands who are already standouts in their advertising and marketing) will be on the hunt for a certain type of professional. They’ll need people who can understand both the business of media markets and the art of personalized content. People who switch from left brain to right seamlessly, planning and executing campaigns with equal parts creativity and mathematical precision.
Those organizations will realize the greatest advantages of hybrid ad tech-martech strategy and solutions by maximizing the value of their individualized, first-party data and deploying it across all advertising and marketing functions.
Far more common will be a second scenario; one in which advertising and marketing teams realize the benefits of integration and collaboration within shared pieces of their respective stacks. They might work together within a tool that uses Martech CRM data to power brand awareness campaigns, for example, or to personalize website campaigns with their ad tech DMP.
Capitalizing on the martech/ad tech opportunity
First, though, we’re going to see a lot of consolidation in the martech space. There are just too many players right now–over 5,000 of them, all competing for funding and market share. As martech solutions are increasingly forced to demonstrate both sustainability and profitability, the best will grow into the spaces left empty by those that either fold or are acquired by larger players.
In any case, expect CMOs to be the ones leading the data-driven, more disciplined charge to fully integrated and optimized digital communications across the organization. The problems that converged or intersected ad tech/martech solutions promise to solve still lie solidly within the marketing wheelhouse. We may borrow from ad tech for scale and automation, but data still lies at the heart of marketing and every successful personalized, engaging customer interaction.