“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Matt Keiser, founder and CEO at LiveIntent.
In recent weeks, the conversation drawing a distinction between marketing and advertising is finally happening in the mainstream. Most of this chatter puts the two concepts at odds with each other and asserts that mar tech is superior because mar tech companies are more highly valued.
But reducing the differences between mar tech and ad tech to their billing models doesn’t capture the true distinctions between marketing and advertising.
In the coming years, the marketing cloud or agency that can master and meld both worlds – marketing and advertising – will dominate an industry currently ruled by Facebook and, to a lesser degree, Google. Salesforce, Oracle, Adobe and the holding companies are all possible contenders.
Mar Tech Vs. Ad Tech
From a technologocial standpoint, mar tech companies are stereotypically less sophisticated than ad tech companies. Mar tech evolved out of email service providers and shares antiquated infrastructure designed around rules and lists. Complex rule sets – the brains behind today’s mar tech – are hard to maintain and less precise than machine learning and artificial intelligence.
Complex rule sets don’t help marketers wield identity and connections to earned and paid media to speak to customers with consistent messaging. Mar tech’s underlying tech is more like the software used for direct mail campaigns than the rest of digital, where decisions are made in real time, impression by impression. Machines won’t replace good old-fashioned storytelling and marketer’s intuition, but will allow marketers to apply their art on a true one-to-one basis.
Today, even if mar tech could be improved by ad tech and vice versa, there’s a massive cultural difference. CRM managers and marketers became the overlords of mar tech, while media buyers and ad operations people became overlords of ad tech. Testing, message, creative and campaign are all terms that mean different things to each discipline, which don’t even measure success similarly. Without identity, advertisers had no way to “close the loop” to report on metrics like lifetime value and customer satisfaction, relying instead on clicks, viewability and other metrics.
The identity graph allows ad tech to reach real people with marketing at scale and is the heart of a cross-channel marketing platform. It makes the distinction between marketing and advertising channels obsolete. Thanks to deidentified people data and identity resolution vendors like LiveRamp, known users can be targeted across advertising channels.
This allows the marketer to reach known customers with personalized, targeted messages beyond traditional marketing channels, including email, direct mail, telemarketing and social. Tomorrow’s marketing platform will seamlessly enable customer relationship extension – the ability to market beyond traditional marketing channels to advertising channels, such as display, mobile web and video.
It’s really ad tech’s user interface that needs a reboot to appeal to marketers. The technology powering ad tech works and the ability to get CRM data into ad tech via an identity graph has been proven, too. CRM data is full of the intent signals needed to predict success. Mar tech’s legacy of rules and lists needs to go beyond traditional marketing channels and integrate with the speed and granularity of the rest of digital: impression by impression and person by person.
What’s Next?
We’ve seen a wave of agencies and private equity firms buying mar tech and trying to jam ad tech into it to make it work like digital. This approach is backward. What’s necessary is a full rebuild of the user interface for ad tech so that platforms can speak to marketers.
Using the past in real time to predict the future billions of times per day is necessary because there aren’t enough hours in the day to write or maintain the rules. The goals of both marketing and advertising are loyalty, awareness and sales. However, the marketer’s language and needs were left behind in ad tech’s evolution. The convergence of needs is here, it’s just happening backward.
The next wave of innovation in mar tech will come from agencies or marketing clouds that successfully leverage ad tech while speaking the language of marketers. We saw one of the savvier moves recently when Salesforce added ad tech to its marketing cloud by acquiring data management platform (DMP) Krux.
Marketers want to reach their customers wherever they’re present: in earned, owned or paid media. Why should marketers speak to their customers one way on owned and earned inventory and another way across display, search, native or video? These types of integrations represent the holy grail. (Sorry, Martin!)
If time heals all integrations, the looming monster is Adobe. Adobe purchased Demdex in 2011 and has had time to digest the acquisition and prepare its ecosystem. Everyone took notice when its marketing cloud received the highest score in last year’s Forrester DMP Wave. With that headstart – and with the frustrations of integrations in the rearview mirror – Adobe sits poised to add new capabilities.
Or will Oracle once again be boldest? Oracle was first to pair a traditional DMP (BlueKai) with people data and closed-loop measurement (Datalogix, which has both deterministic and probabilistic data). Will it build its own execution layer like SAP? Or will Oracle go whole-hog and buy Mediamath or Turn to bolt onto its cloud?
Or will it be an agency that reaches the intersection first? Will Dentsu + Merkle prove that the winning combination is media expertise combined with identity resolution? Or will WPP boldly acquire AppNexus and merge it with KBM Group, Turbine, Co-Pilot and Spotlight to form the ad-marketing platform of the future?
Or will Verizon swoop in and combine its assets to form a platform that uses its vast troves of data and inventory, which span traditional desktop, mobile and video, in the ad-marketing platform of the future? Or will AOL go the way of the walled garden?
Advertising used to be about prospecting, and marketing was about customer relationship marketing. However, in a world of infinite inventory and fragmented device usage and attention, the sophisticated tools underpinning ad tech combined with CRM data are the only mechanism for customer relationship extension wherever customers are engaged and present. The platform of the future will be Frankensteinesque: brains and heart from ad tech, with interface and people data from mar tech.
Ad tech, agencies, marketers and their clients – brands – want a combined solution for servicing their customers in a mobile-first era. The winner will be the cloud or agency that melds the advertising and marketing worlds. Mar tech is too backward because it was forged during a period that has come and gone. Marketing and advertising are two sides of the same coin, united by identity resolution. Facebook has proven that, and Google is coming on strong.
The challenger of the future is the one who can wield identity first and win by playing the game Facebook invented – marketing to people, not devices, while enabling brands beyond Facebook’s walled garden.
Follow Matt Keiser (@mrkeiser), LiveIntent (@LiveIntent) and AdExchanger (@adexchanger) on Twitter.
