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The Merger of Ad Tech & Mar Tech

Marketers and advertisers have two crucial goals in common: Both want to drive revenue and each group works to drive the actions of consumers. So, it’s no surprise that in recent years there’s been a convergence between advertising technology and marketing automation.

“Both ad tech and mar tech are getting at the same problem: the huge explosion of data in the ecosystem,” says Matthew Greitzer, cofounder and COO of programmatic media buying company Accordant Media. “And while trying to make sense of that data, the legacy systems that have existed for the last decade or more are simply no longer sufficient. So, new technology is needed to help marketers and advertisers power the data-based decisions that they want to make.”

Along with that explosion of data, the recent union between ad tech and marketing automation is on fire because of the rise of programmatic—i.e. automated systems—in both sectors. Each set of tools, no doubt, are meant to drive performance for advertisers and marketers, and programmatic fuels the flames. But what sparked this fire? Mergers and acquisitions, says Ed Montes, chief revenue officer at DataXu, a programmatic marketing platform for brands and agencies.

“There will be more consolidation of the current providers,” Montes says. “When you look at both categories there’s a tremendous number of new entrants in the space on both sides over the last 10 years.” He adds that many companies want to be platform service providers that meet every part of a business’s needs. “We’ve gone through a lot of hyper-investing over the last decade. Now these companies will start to mature, and as that process happens, you’ll have winners and losers. And I think we’ll see the landscape of providers change over the next few years.”

Distinctly different pasts; strikingly similar futures

Jonathan Moran, senior product marketer of customer intelligence at data giant SAS, says that ad technology and marketing technology have traditionally different focuses. He says that in the past, ad technology has focused on audience monetization, display advertising, location-based targeting, mobile marketing, networks and exchanges, video and television, and, usually, third-party data.

Marketing technology, however, has had entirely different focuses: campaign management, contact optimization, customer data, email marketing, event triggers, lead management, and lifetime value.

The intersection of both can be found as strategists work to meet several of these goals. Moran says, for example, that advertisers can use predictive modeling and lifetime value to inform mobile and display ad content. Marketers can use third-party data, combine it with first-party customer data, and inform marketing messages and content.

Bottom line: ad tech and mar tech are coming together.

“The end state for both of them is the delivery of contextually relevant messages,” Moran says. “Advertisers who focus on display advertising want to put up a digital ad that’s relevant. They want people to act on it. They want people to convert. The same is the case for marketing technology. It’s delivered in a different manner with marketing technology. But the end state is the delivery of a personalized message, which someone then acts on—and eventually converts.”

Spotting the big tech trends

Analysts say that there are several major trends in ad technology and marketing automation that make this once unforeseen merger inevitable. Echoing much of the same sentiment as Moran, Accordant Media’s Greitzer breaks down the trends he feels are pushing this recent tech fusion. “The biggest trends in ad tech, I think, are the rise of programmatic media and the ability to deliver messages on a one-to-one basis to consumers,” he says. “Marketers and advertisers want technology that enables them to deliver creative [that’s] specifically based on what [they] know about the consumer: the ability to pick and choose who [they] want to deliver an ad to—which [they] couldn’t do in a pre-programmatic world. It’s a trend that’s allowing the convergence of the two.”

DataXu’s Montes says with certainty that he can pinpoint the biggest trend in both technologies. “To me there’s a trend that’s different from the ability to just use data. The trend is activating data,” he says. “Now you have this data, you want to take advantage of it. You want to use it for buying; you want to use it for analysis; you want to use it to inform your creative, etcetera. So, that [data activation] is certainly a trend in both.”

The effects of tech mergers on customers

High customer expectations leave advertisers and marketers with no choice: Use both ad tech and marketing automation or fall behind. “The whole reason that we’re seeing this shift is because of the more educated consumer today,” says Bridget Bidlack, VP of enterprise products at Rocket Fuel, a programmatic marketing and media buying company. “Consumers are tied to their phones; they’re tied to their Internet. They basically want to interact with a marketer or advertiser on their terms. And how they interact with a marketer isn’t always the same. It’s whatever is convenient at that time.”

Bidlack adds that customers expect marketers or advertisers to tie all of the information together from each of their interactions. And she insists that the convergence of ad tech and marketing automation enables companies to meet these lofty demands.

“Those marketers and advertisers who do that—who unite both technologies—really have an edge over their competitors,” Bidlack continues. “They can start where the consumer wants them to start, really build on what they know about that customer, and then get them the right offer.”

Those right offers made possible by tech mergers are making more customers happy, says SAS’s Moran. “At the end of the day people don’t want an offer that they consider to be spam, is not relevant to them, or has no application to where they are along their buying journey or path to purchase,” he says. “And because consumers are getting personalized messages across all media types—as a result of the merger of ad tech and mar tech—they’re feeling that brands understand them more. They feel like a brand understands where they are and knows what they need to get a goal accomplished. That builds loyalty, and it turns people into brand advocates.”

Impact on the bottom line

That insight and advocacy often leads to one place: revenue. “It’s a huge opportunity for marketers and advertisers to unlock revenue,” Accordant Media’s Greitzer says. “So many opportunities open up, like what they understand about their customers’ needs and what they understand about how a customer wants to be serviced. All of those things can be untapped with the convergence of technology. Better relevance drives better performance.”

Of course, most every marketer and advertiser aims to boost revenue. As the sales benefits of using these technologies become more apparent, adoption follows. “From a revenue perspective, we’re certainly seeing more volume and revenues growing year-over-year. And we’re not seeing any deceleration of adoption [of ad tech and mar tech]. In fact, it’s quite the contrary,” says DataXu’s Montes. “We’re seeing acceleration. Overall, the market data that I have seen has shown the growth in revenue and growth in technology. That means a continual growth in the intersection between the two.” In essence, Greitzer says, the fusion of both technologies makes things better for the customers, and that leads to more sales and revenue. “The more technology enables us to get the right message to the right person at the right time, the better the return on investment,” he says.

A more creative and intelligent outlook

Current trends, customer expectations, and positive effects on the bottom line all point to one thing: the eventual disappearance in the distinction between ad tech and mar tech. “I do see these two worlds really coming together,” says Rocket Fuel’s Bidlack. In fact, she predicts that both technologies will come together because advertisers and marketers want better tools to understand and map the customer journey, and they need one single view of each customer. “I see ad tech and mar tech working together to bridge the known and anonymous users,” Bidlack continues. “Marketers and agencies don’t want to log in to two different platforms that are telling them two different things. You shouldn’t have to log in to five different platforms to understand your customers and their behaviors.”

She says the convergence of marketing automation and ad technology allows all of the data to exist in a single platform, which provides clarity, frees up time, and sparks new ideas. “As we continue to see this consolidation of ad tech and mar tech, we need to be innovating. Especially smaller ad tech companies—and even smaller marketing tech companies—which can take a little bit bigger risks. They can build solutions that are keeping up with the times.”

Keeping up with the times means more satisfied customers and more time to focus on strategy and creative that’ll make a lasting impact. “Go out. Explore. Discover,” Bidlack says. “There’s already a lot of great synergy between ad tech and mar tech. And really it’s just about coming together and sharing information so that marketers and advertisers can continue these conversations with customers no matter where they are.”

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