“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 Louis Moynihan, vice president of strategic alliances at Demandbase.
Last year, I declared the convergence of ad tech and marketing tech to be a key theme of 2014.
Since then, this conceptual “theme” has evolved into a practical trend. Across the industry, companies are taking these opportunities seriously and establishing the infrastructure required to truly benefit from these convergence points. As predicted, amid the mergers and acquisitions (M&As), partnerships and software development, customer relationship management (CRM), content management systems (CMS), analytics and marketing automation systems are all starting to play well with ad tech.
The intersection between ad tech and, specifically, marketing automation has been red hot. The integration layer that made this possible is commonly known as a data-management platform (DMP), but this particular application of a DMP offers a hint of ad tech’s future.
In essence, the huge M&As that occurred between marketing automation and ad tech were largely based on the basic functionality of cookie syncing, segmentation and distribution. I think it’s easy to predict more convergence points will follow quickly, such as coordinated creative between websites and ad units, central workflows that manage nurturing across channels and convergence of tag management solutions with DMP functionality, and the list goes on.
Bottom line: We are at the beginning of a new ad tech era, where compounding value is available at the many intersection points between ad tech and mar tech.
CRM And Ad Tech Data
In 2014, we recognized how important it would be to break down the barriers between ad tech and CRM data. This year, many of the bigger players in the space have made moves in that direction. In particular, we’re seeing a number of offerings that give customers access to robust online and offline data to leverage in activities across the funnel. Acxiom, for example, acquired LiveRamp in May 2014, followed by Oracle’s purchase of Datalogix in December. Adobe launched a Customer Attributes service allowing for offline onboarding in March.
Onboarding offline data and mapping it to online cookies is now part of the biggest marketing clouds, and there’s more room to grow in the coming year. It’s largely CRM data that’s being onboarded, and that space is heating up. Companies, including Salesforce, SAP and Microsoft Dynamics, will have the opportunity to partner, build and/or acquire data-management platforms this year, and they’ll likely make moves before the end of 2015.
Dynamic creative in ad tech has seen substantial success, and the next logical step is to connect those personalized ad messages to the website experience via content management platforms. Adobe is ahead here but now Oracle is following suit. Independents, such as Optimizely, are gaining traction, and some of the lighter/faster personalization offerings are incorporating their own DMPs. Thus far we haven’t experienced any acquisitions in the space, but I think this will likely change by the end of the year.
As personalization heats up, those solutions will by necessity want to partner with DMPs, and we’ll see CMS, personalization and testing tools start to merge, partner and consolidate as they work to deliver highly targeted, data-driven content solutions.
Website analytics have become increasingly sophisticated, but up until recently, advertising analytics existed in a separate silo, restricted to landing pages. Now, attribution vendors integrate these two separate data sets, making the whole much greater than the sum of its parts. We’ve seen some proactive efforts towards this convergence. Google Analytics acquired Adometry in May 2014, while Ensighten bought both Tagman and Anametrix between May and October after receiving $40 million in Series B funding.
Tag management and attribution are crucial components of any marketing cloud, but we’ll see more development when it comes to joining ad tech attribution with non-ad tech attribution. Cross-device and cross-channel are terms thrown around casually, but we haven’t even scratched the surface. When ad tech attribution is joined with mar tech and offline attribution, it will separate the value generators from the imposters.
It’s become evident that ad tech adds tremendous value to B2B nurturing, so it’s a natural fit for MAS. Oracle’s acquisition of Eloqua and BlueKai spoke to this, and this year it added Datalogix to its acquisition list, bolstering its offering when it comes to targeted, multichannel nurture. Ad tech companies like Turn and Rocket Fuel have partnered with MAS as well.
In the next year, we can expect to see partnerships and acquisitions that will go both ways; MAS companies will try to acquire and partner with DMPs, while ad tech companies will look to target and nurture across the funnel, not just paid media.
I intentionally omitted DMPs as a category last year because I felt they were a necessary integration layer, not necessarily their own use case, but now I feel compelled to add them to the primary intersection between ad tech and mar tech. The market has proved me wrong here, large brands are looking at enterprise grade DMP’s as the answer to their cookie ownership/leakage issues.
This year, the stakes are a bit higher as companies try to assess their needs and capabilities. Big Cloud CRM companies will need to acquire DMPs, whereas others will start to build out their solutions with an eye toward a new product line and/or an acquisition.
Another potential trend to watch out for this year: demand-side platforms (DSP) with DMP functionality. Wall Street valuations are low for media-buying technology, but with a significant market correction DMPs could be spun off from DSPs. What’s also interesting here is that mar tech’s need for the DMP might be making it more valuable than the DSP. This is a long shot, but not out of the realm of possibility.
The convergence of ad tech and mar tech has already kicked into gear, with numerous updates during the last year. I believe this is just the tip of the iceberg because the value for both sides is staggering. Let me know if you disagree or if I missed anything. After all, converging ideas are stronger than ideas in a silo.
Converge or die.