Opinion

Our industry is going mad(tech)

Madtech – the love child of martech and adtech - should be embraced as one of the most exciting opportunities for marketers today, according to Columbus’ Tom Mennetrier.

In the ever-escalating marketing and ad tech race, tech giants are merging in multibillion dollar deals every month; and there are an unprecedented number of opportunities in this new arena that marketers need to know exactly how to capitalise on.

Why exactly are martech and adtech companies converging?

Martech was essentially created by direct response marketers who needed CRM platforms. Later, adtech emerged from the digital era to provide more efficient audience targeting capabilities. As we enter the next stage with addressable media, both sides need to converge, bringing to life the one to one advertising Holy Grail at scale – introducing MadTech. Adobe, Oracle and Salesforce currently lead this MadTech race and are building models that contain the tools enabling advertisers to collect, analyse, activate and augment their data.

As cliché as it sounds, data has completely modified the advertising marketplace and has shifted from the publishers’ control to data driving the show. While data is not scarce, it is significantly more volatile and more difficult to refine and extract real value from. The successful extraction of value from data has seen the rise of the new advertising business model: data monetisation.

Large companies that own large customer databases, such as telecommunication companies, have invested in trading desks to control the monetisation of their customers’ data. It is increasingly common for retailers, airlines and entertainment companies to offer advertising services essentially built around modelling audiences with their CRM data against advertisers’ first party data.

Regulations have accelerated the madtech race

With the implementation of the GDPR, third party data is becoming more protected, less accessible and arguably for some, less worthwhile. Not only has the GDPR made third party data less accessible, but consumers are increasingly aware and in some cases hesitant, to share their data. Today, advertisers need to focus on their first party data and direct data partnerships (second party data) to deliver high performing advertising.

Tech giants understood very quickly, the enormous business potential of a seamless activation of first party data in ad platforms, leading to DMP (data management platform) and CDP (customer data platform) becoming the cornerstones of addressable media. Along with other tools, DMPs and CDPs are essentially about stitching together all of the data available from the touch points along a customer’s journey.

Where do you start?

With these opportunities in mind, many within the industry are wondering where they should start with building their marketing and ad tech stack.

Before you even consider adding any tools to your arsenal, you need to have perfected your CRM technology. Advertisers need to have the pre-requisite customer ID to even contemplate getting started with personalised customer experiences.

The next and very frequent question from our clients, “Do we or do we not need a DMP?” For those that already have a DMP, they are debating whether they should invest significant money in to the development of a CDP. If you don’t have the budget or resources, there are effective alternatives, like the Google Marketing

Platform, which can help advertisers build audiences and allow scaled activations

Finally, if you are aiming for a true omni channel approach, which enables personalisation across silos, you may find it necessary to invest in both a DMP and a CDP to create your own custom stack. This will provide you a truly unified view of each customer. Additionally, having both technologies will give you the ability to activate personalisation at scale, using the data you’ve collected, at lightning speed, at every touch point on the customer journey.

Focus on strategy and creativity

The madtech arena is arguably confusing for marketers. Innovation is at a frenetic pace in Australia and the industry itself is operating at an increasing level of sophistication. The complexity can easily become counterproductive, ruining efforts and budgets.

Madtech should be embraced as one of the most exciting opportunities for marketers today. Don’t let the unknown and confusion stifle the excitement surrounding these developments. Allowing technical experts to stitch tools together and moving towards machine learning, will mean that the tech itself will be doing the heavy lifting for you and your team, leaving you with the time to focus on strategy and creativity.

Tom Mennetrier is group client partner at performance marketing agency Columbus.

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