The worlds of marketing technology and advertising technology developed in parallel for two decades, but three important industry trends are bringing them together: The growing advertising utility of walled gardens like Google and Facebook; the importance of the data layer and analytics to customer experience; and the CMO’s desire to bring platform proliferation under control.
But while the volume of discussion around the merger of these two disciplines is likely to increase in the medium term, it is important to understand that technical, structural, financial and cultural impediments remain.
For instance, companies are already struggling to marry their own internal data sets together, let alone integrating a plethora of third parties. Regulatory and licencing issues around data abound, and the business models in advertising tech and marketing tech are often very different.
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Then there is the small matter of industry structure. Brands typically have more direct control over their marketing technology, but are more likely to work with agencies on ad tech.
With these caveats acknowledged, what’s driving the twin pillars of a CMO’s tech stack together?
Earlier this year, Morgan Stanley made what seemed like a bold and controversial prediction. It said that in the first quarter Facebook and Google would account for 85 per cent of all the new digital advertising dollars in the US market.
Eighty. Five. Per cent.
The prediction generated a predictable response from other publishing channels, although subsequent analysis by third parties based on Facebook’s and Google’s published financial results — and IAB data about ad spend — tended to bear out the Morgan Stanley analysis.
While the implications for such a consolidation were clear for rival publishers, lost in the debate were the obvious implications for the ad tech sector. That so much money would consolidate around two brands with such extraordinary and unrivalled user data presents an existential challenge to every other ad tech in the market.
That has some industry leaders like Marketo’s Phil Fernandez arguing that ad tech as a sector will shrink to just a handful of participants by 2020.
As companies like Google and Facebook hoover up ever-increasing percentages of the pie, they are also extending the advertising utility of their offerings to try to keep their clients inside the walled garden. And with their massive trove of data they are well placed to deliver increasingly sophisticated analysis — either directly or via platform partners.
Seamless integration at the data layer is critical for companies who wish to provide sophisticated and personalised experiences for their customers and consumers. That means all data, not just the advertising.
The ability to read a prospect’s digital fingerprints across all their online behaviour, and to respond with appropriate content at the speed of web, will deliver a critical competitive advantage to brands.
But it is no easy feat. Quite apart from the obvious technical challenges, finding staff with the capabilities to read the rarer signals in the noise is difficult — verging on impossible.
Typically, data scientists are earning around $120,000 a year — and those with social analytics skills can command upwards of $200k a year, according to research by IAPA.
To deliver the great experiences demanded by customers today, companies need to tame internal information silos. But even that is not enough — they also need to allow for the free and instant flow of information across company boundaries and out to partners and suppliers.
For instance, the first-party data contained in a CRM needs to be married instantly to third-party data such as cookies generated by a digital advertising campaign via a services such as a data management platform.
Likewise, the ability to access new data sources on demand will be just as critical.
And companies want to be able to interrogate and manage this data with as little complexity as possible and to incorporate it into all of their campaign activity.
That’s where the third big trend driving the merger of advertising tech and marketing tech comes in.
The last few years have seen the emergence of sophisticated platforms such as Oracle Marketing Cloud to meet the gathering call from marketers for control over the burgeoning mar tech and ad tech spaces.
Scott Brinker’s Chief Martech blog, for instance, currently tracks 3800 companies offering solutions for marketers, and he recently told attendees at the ADMA Techmix conference in Sydney that the figure could well swell to over 5000 by next year (in fact we have a bottle of Penfold’s Grange riding on it).
Marketers want tools to manage and control the growing complexity of their ad tech platforms. While no one expects a single vendor to provide all the solutions from a marketing cloud, it’s clear that CMOs have growing expectations about what they regard as core functionality — and that includes integrated advertising and marketing technology systems.
The reason is simple enough, and best described recently by Kevin Akeroyd, General Manager of Oracle Marketing Cloud world wide in an interview with Which-50: “Ads are becoming customer engagement channels, they are not just ads anymore.”
About the Authors
This article was produced for the Oracle Marketing Cloud blog by the Which-50 Digital Intelligence Unit. Andrew Birmingham is the director of the Which-50 Digital Intelligence Unit. Will Griffith is RVP Sales APAC Oracle Marketing Cloud, which is a corporate member of the DIU. Members contribute their expertise and insights to Which-50 for the benefit of our senior executive audience. Membership fees apply.