Martech & Ad tech Convergence: Myth or Reality?

Jun 09 2016

There has been a lot of chatter in the industry lately about how the distinct worlds of marketing technology and advertising technology are converging. Technology companies, from the big martech players – like Adobe, Oracle, IBM & Salesforce – to the paid media side (DSPs, SSPs, trading desks) are all looking to expand their tech stacks. We even see companies like Deloitte, IBM and Accenture buying agencies. Will we see agencies react by acquiring tech companies?  

The goal for all these companies is to offer brand marketers a fully integrated mission control center powered by a data layer that gathers, collates and optimizes at every consumer touchpoint, thereby accounting for the totality of a given brand’s owned, earned and paid media efforts. The idea is that this martech/ad tech convergence will create omnichannel marketing nirvana that makes digital advertising more personal and more engaging and will ultimately make ads as welcome to consumers as content.

Is this scenario actually happening or is it a bunch of hype?

I’m happy to say that it is the former. It’s not happening as quickly as some folks would have you believe, yet there are clear signs that companies are moving in this direction. In fact, it’s not far-fetched to expect this trend to hit critical mass in the near future. This is a classic challenge and opportunity scenario. The challenge is that the majority of programmatic planning and execution for paid media is happening at media agencies. There are notable exceptions, like Netflix, but most are still not bringing this in-house. Email and earned media are often managed in house or by other third parties (not the media agency).

This fragmentation creates inertia/challenges for brands to maintain cohesive programs across all channels. Companies that are fully invested in leveraging their customer data are likely to lead the charge in creating better creative strategies. I already see this desire among some brands and integrated agencies where data/CRM/paid media/earned media are all under one roof. The opportunity is to optimize both operational AND performance efficiencies across all marketing channels.

If we as an industry can fulfill on this potential of convergence, there will be a host of great benefits.

Higher Customer Lifetime Value

Email marketing is currently one of the best ways to increase customer loyalty, often because it leverages first party data. We can bring this approach to paid advertising and speak personally to customers. This is eminently more effective than current DR marketing tactics that erode the brand-customer relationship with blunt, disrespectful retargeting. They may close a sale in this way, but it’s often at the cost of tarnishing the brand equity and ultimately customer lifetime value.

More Engagement, Better UX

When a message is relevant and beautiful, it doesn’t need to rely on heavy, distracting animations to draw your attention. People can find advertisements useful and enjoyable. We can make ads useful, respectful and beautiful, in effect, more PERSONAL. For ads to be more relevant, we need to bring more content and data to bear. Branded content is most effective when it delivers relevant information about the world around us: location, time, weather, pollen levels, stock prices, sports scores. Information about people and their brand relationships, as well as other information like demographics, intent, and actions taken on site and in other advertisements all are fed back into the omnichannel stack to refine and further heighten consumer engagement. Marketing, creative and media teams will need to think and work differently to take advantage of the new ways that they can speak to their customers.

In summary, brands and the companies that partner with them are facing a huge opportunity. TV marketing has strong reach, but often unsatisfactory relevance. Email marketing has high relevance but limited reach. Paid digital advertising can deliver both reach and relevance throughout the entire consumer journey from prospecting to retargeting.

Ultimately, it's about servicing the consumer. The consumer does not exist only in display or in an email or in social media. The creative should vary based on where the message is being delivered, but ostensibly the marketer should think about always connecting with the consumer first. If that is the case then it's only logical that these silos will be broken down.

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