Display Advertising, Video Advertising. Ad Servers, Ad Exchanges, DSPs, SSPs – we are all familiar with these terms as the advertising ecosystem has grown since the dawn of the internet. Over the past few years, the marketing technology ecosystem has been going through a similar kind of evolution. It is now an increasingly complex ecosystem with more than 2,000 vendors (depending on how you classify them). How are these two ecosystems related? To ensure we have the same understanding of these concepts, it is useful to look at more traditional definitions of these terms:
Marketing Technology – Platforms and tools used by marketing and sales organizations to manage and nurture leads, manage opportunities and customer contacts and funnel analytics and attribution.
Advertising Technology – Platforms and tools used by publishers, advertising operations and agencies for buying, selling, delivering, displaying, targeting display, video and mobile ads.
In this blog, I will focus on the evolution of the technology associated with each of these platforms and the implications it has on marketing technology going forward.
AdTech Started With Large Scale B2C Applications
The origins of AdTech can be traced back to the Internet itself, largely with intent to provide a viable monetization model for consumer facing websites. The primary reason for this was that advertising was (and even today is) the only business model that was proven to work at scale. Advertising technology evolved around the need for publishers to sell inventory and for advertisers to buy this inventory in the most efficient way possible. Over time, this has led to commoditization of the technology, driving margins down for the technology vendors and the only ones left standing are the ones who can do this at massive scale. Google, Facebook and the TV/Cable networks are just some examples of companies that are able to offer inventory at that scale.
MarTech Started with CRM & Enterprises
MarTech on the other hand started within the enterprise with CRM systems such as Salesforce that streamlined sales and marketing in an organization and created efficiencies at the bottom of the sales funnel. Marketing Automation systems such as Marketo, Eloqua sit on top of CRM platforms and allow customers to scale and organize the customer’s ability to nurture leads. Given the origins of MarTech within the enterprise, these platforms have always been about driving a business outcome. This is true regardless of whether it is about increasing your sales pipeline, predicting new leads for your pipeline or nurturing existing leads.
Isn’t Advertising a Form of Marketing?
What is often forgotten is that marketing is much larger than advertising itself. Advertising is typically just one component (albeit a large one for consumer companies in particular) of a typical marketing budget. With the consumerization of the enterprise and with the advent of mobile as the dominant collaboration platform, the lines are blurring between the B2C and B2B companies and their approach to marketing. B2B and B2C companies alike are looking at advertising as just one component of a larger marketing strategy and this applies to how they think about technologies, platforms, organizations and workflows.
What Does This Convergence Mean?
Let us look at what I believe this means for both AdTech and MarTech incumbents.
What does this mean for AdTech?
AdTech platforms will become deeply integrated with the rest of the MarTech stack from a technology, operations and organizational perspective. With respect to product capabilities, this specifically means that most AdTech platforms have to continue to evolve their capabilities along the following lines:
- Solving for Attribution – As advertising becomes more about driving business results and KPIs, advertising platforms must solve for attribution. This has to extend between online/offline channels, and different forms of advertising such as display, video and mobile.
- Transitioning to a Platform – Advertising platforms traditionally have only solved for advertising and have been designed for advertising operations folks. The convergence implies a more holistic consideration for a marketing platform from a buyer’s perspective – this means that advertising platforms must more deeply integrate with Marketing Automation, CRM platforms and other backend systems in addition to providing a rich set of APIs to foster the creation of an entire ecosystem.
- Focusing on end to end funnel analytics – Last but not the least, advertising analytics will need to evolve from the traditional engagement analytics (clicks, impressions) to full funnel analytics. This means the marketer is able to track advertising spend to qualified leads and actual customers as is possible in other marketing technology platforms.
What does this mean for MarTech?
As MarTech platforms evolve to expand across search, advertising and social, they should focus on evolve their capabilities in the following areas:
- Moving to 1-1 targeting and personalization – MarTech platforms will evolve to enable the marketer to deliver the right product to the right buyer via the right channel at the right time. This means more machine learning, more predictive analytics and more behavioral and demographic based targeting.
- Building for massive scale – While advertising platforms were built for delivering hundreds of millions of impressions in real-time, this is not the case for marketing technology platforms. This will change as the platforms converge and customers are looking to do all of their marketing via one platform.
- Shift to becoming content-centric and content-aware – Content is at the center of a marketing campaign. Advertising platforms (display, video etc) have always leveraged content metadata to drive ad delivery and ad targeting. Over the next few years, you will see marketing technology platforms launch new features and capabilities that enable a customer to create campaigns and offers centered around content.
What does this mean for Modern Marketers?
These are exciting times to be in this space. Data accessibility is driving a new breed of marketers that allows them to optimize for business results across all of their marketing initiatives. Marketers should be ready for the convergence between AdTech and MarTech. With data science, machine learning and insights driving this convergence – the holy grail of B2B marketing with the right campaigns for the right buyer via the right channel across all of marketing might soon become a reality.