SAP has come very late to the digital marketing game, but at least it is being smart about it. The company is bringing its strength in analytics to bear on ad tech with the announcement this week of SAP XM.

The company’s SAP Exchange Media (SAP XM) platform is described as “an integrated online media network that directly connects advertisers and publishers in the cloud, based on the SAP HANA platform”.

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According to Forrester Research in a study commissioned by the German software giant, 90 per cent of advertisers and media companies surveyed said they saw value in a new digital ad buying model that connects buyers and sellers directly. That reduces the influence and cost of the intermediaries and  ticket clippers who make make up significant pieces of the ad tech value chain. “Not only does this increase transparency, but it also drives efficiency, according to the study.

Among the benefits SAP ascribes to Exchange Media:

  • Transparency and control with end-to-end advertising ROI analytics and campaign management capabilities in real time throughout the consumer journey;
  • Increased conversion rates through hyper-targeted advertising along the consumer journey by getting the right message to the right audience and on the right channel through targeting and profile-matching capabilities optimised through real-time leveraging of first-, second-, and third-party data;
  • Increases in overall efficiency by facilitating a unique direct real-time interoperation between advertiser and publisher, while eliminating fraud through direct connection to publisher inventory;
  • Simplified processes through a best-in-class user experience that is highly intuitive and easy to use.

The worlds of ad tech and marketing tech are rapidly colliding at the moment and the conflation of these two schools will likely be one of the most importantly technology stories for marketers over the next two years.

Adobe, Oracle and Marketo have all addressed the issue during their digital marketing conferences this year and no doubt Salesforce will do the same later this year.

But while the trend seems inevitable — and welcome, according to the CMOs Which-50 has interviewed in recent weeks — serious impediments remain. Not least of these are the disparate business models between marketing tech and ad tech, deep structural barriers at the agency level, and even valuation issues for companies trying to shift from one model to both.

HANA is SAP’s trump card and its decision to come at marketing from an analytics perspective makes sense, although it is also a virtue borne of necessity. It is very late to market, lags far behind Adobe, Oracle and Salesforce and apart from perhaps Marketo its opportunities to fast track the marketing cloud opportunity by acquisition are seriously limited.

It tried to partner its way into the sector two years ago by buddying up to Adobe through a reseller relationship, but it was clear from what Adobe CEO Shantanu Narayen told Which-50 earlier this year that that deal basically went nowhere fast. (Its Australian subsidiary denied any knowledge of it when we followed up a year later.)

Still, this move by SAP will light a brighter fire under its incumbent rivals like Adobe and Oracle — and even Google — and should accelerate the move to merge marketing and advertising platforms. That will be a welcome development for marketers in an absurdly over platformed environment.

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