Mythbusting and treading the complex jargon-filled waters on advertising technology is part and parcel of the space, but with the increasing pivots from ad tech to 'martech', AdNews puts it to the industry to explain the differences between both.
According to the convergence of ad tech and martech whitepaper out this week from retargeting company AdRoll, there is no single absolute definition that distinguishes one from the other. Instead, it says the disciplines of ad tech and martech most commonly differ over the types of data they rely on, the types of campaign activity they support, who - brands or agencies - typically manages the systems, the way services are priced and whether the media is paid for or owned.
It also found that while there is clearly a convergence underway, significant roadblocks remain; major silos exist between and within the two disciplines and a number of factors are creating the circumstances for an accelerated push to merge.
The report stated that marketers will spend US$500 billion on advertising in 2017 and at the same time, will spend more on their technology than ever before.
“Technology is now core to the success of all marketing. Technology that provides a holistic view of all the activities marketers undertake - regardless of whether media is owned, earned or paid for - represents a core competitive advantage,” the report stated.
Speaking to AdNews, AdRoll's APAC vice president and managing director, Ben Sharp, says one of the difficulties in describing the words 'ad tech' and 'martech' and their current convergence is that there is no common accepted explanation for either. Many have argued there was never really a time when they weren’t converging at some level.
To further complicate the matter there are also exceptions to whatever definition you come across. The report states that one interpretation is that ad tech tends to work with pseudo anonymous, cookie-based identifiers, whereas martech typically deals in first-party collected personally identifiable information.
“Ad tech delivers ads online using programmatic technology to drive efficiencies and martech is all about automating technology to deliver marketing infrastructure for a business e.g. emails were traditionally sent via a ‘Mail Merge’ out of a database,” Sharp says.
He says in many cases the same people are purchasing both ad tech and martech and don’t care what it’s called as long as the technology helps drive their marketing activations as the same cost.
“Ad tech and martech are in many ways trying to deliver a similar result, the execution and channels used are slightly different. For example, delivering ads online and delivering targeted emails to that business’s consumers can now be done with the same piece of technology. This consolidation can deliver efficiencies for the client with one vendor that intimately understands the client’s business and objectives and allows for streamlined reporting,” Sharps explains.
Sharp adds that the principal of marketing hasn't changed, technology now allows marketers to be more efficient. Data is more prevalent and available, but interpreting this data and making it useful can be really difficult, especially considering just how much data is available to a marketer.
Using 'martech' to climb the food chain?
On the question of why some vendors have chosen to actively pivot towards a martech offering from their original ad tech offering, PubMatic Asia vice president Jason Barnes tells AdNews the real reason for this is company valuation.
“A few ad tech companies sold for valuations less than one their revenue and cemented a perception that ad tech companies were low value and poorly-performing players,” he says.
“Board level conversations centre on the return and value to shareholders, and valuation is the driver that has been for the pivot to martech. If an ad tech company with a lack of revenue share models only garners a one-time revenue valuation and martech/SaaS models get six times, how do you think a company will talk about itself?
New Sizmek GM APAC Kees de Jong agrees and tells AdNews there is a desire by some to be higher up the food chain, where the actual money is.
“Advertising is only one part of a broader marketing plan so for marketers it’s important to work with technology partners that can deliver real business outcomes and not just help them execute their next ad campaign,” he says.
He adds that traditionally, martech has been the domain of the brand marketer and to a degree their creative agencies, whereas ad tech sat with the media agency.
“These lines are becoming more and more blurred as businesses become more customer-centric and realise they need to break the silos to get a complete, holistic view of their customer,” de Jong says.
The new 'it word'
Blis senior sales manager Brittany Lefave says martech seems to be the new ‘it’ word, putting the use of ad tech to bed for most digitally focused organisations.
“Many marketers now believe that ad tech is simply a subset of martech, and it’s become easier for tech providers to position themselves under a broader, more approachable name for the sector,” she says.
Amobee Australia and New Zealand managing director Liam Walsh says he doesn't think it’s a situation of ‘rather’ or pivoting from one to the other. “I think martech is an extension of their solutions as it becomes possible for advertising to be integrated into other marketing functions like CRM systems," Walsh adds.
Prior to advancements in digital and advertising it wasn’t possible to integrate both and they were in silos. The integration between ad tech and martech can be achieved and makes it possible to execute personalised marketing across the whole scope of services. So ideally you don’t want to make a choice between ad tech or martech, you want them both working together.”
Quantcast ANZ managing director Andrew Double says there is a pivot happening that is focused on understanding the single view of the user and while there is a perception that martech delivers that, he thinks that discounts the role of ad tech, which can help deliver and assist in reaching that single view understanding.
“However, marketers need to know the online behaviour of their customer in real time, and ad tech delivers that capability. If you want to understand the customer outside closed ecosystems you need a combination of data sourced from both ad tech and martech systems. The whole world is not within one platform,” Double says.
From Gumtree to Amobee and Quantcast to AOL and Yahoo7, we asked a handful of industry experts to give us their views on the fundamental difference between ad tech and martech. Do you agree? Feel free comment and share your views below.
Gumtree Australia head of advertising and partnerships Laura Hill:
“Ad tech is the buying and selling of advertising, while mar tech manages the marketing tools. However, when we emphasise a boundary between the two platforms, we lose sight of the fundamental goal for marketers - which is to create seamless customer-centric experiences for our audiences across all channels and touchpoints.”
MullenLowe Profero Sydney business designer Melina Hamilton:
“Ad tech is only a fraction of the total customer experience equation. Ad tech does a great job of optimising media spend to place the right message, in the right format, in the right channel to the right person. But let’s say that someone views or clicks on that placement, then what? If they don’t convert, is more media spend required to place an evolved message in their daily browsing habits?
This is where martech comes in. Martech optimises the marketing output of an organisation to reduce the reliance on media to engage and re-engage. It connects tactical strategies with always-on strategies across the entire customer journey. That means once a marketer has paid for a consumer to engage an asset off-platform (the job of ad tech) then they should only pay once as enough information has been collected to re-engage them on-platform (the job of martech)."
PubMatic Asia vice president Jason Barnes:
“Ad tech is about automating the process of buying and selling digital inventory, and martech is about automating the means to market to customers from segmentation to one-to-one communications. Increasingly, we see the term ‘madtech’ being used, which merges the two and shows how the technology built to service display inventory has applications across the marketing mix.”
Blis senior sales manager Brittany Lefave says:
“I believe people have perceived the difference of ad tech and martech in the past to be based solely on cost structure and the ownership of the service being offered. Ad tech equals a paid media service, usually offered by agencies, while martech focuses on owned media and gets used in-house. However, we are past the times where agencies provide strictly paid media solutions. Ad tech could be a word of the past as agencies and tech providers begin to offer more tailored, holistic solutions in the paid, owned and earned media space.”
AOL APAC head of data and attribution Nikki Retallick:
“Advertising and the technologies that support it are primarily about prospecting and brand building. It has been built around third-party cookies, which track impressions, clicks and sales on an anonymous basis. On the other hand, marketing and associated tech is defined by its precision and its known customers and first party-data sets, often associated with identity. Other distinctions have been made around commercial models and customer types: ad tech has leaned towards a more campaign driven, media-based model and as such has largely been traded with media agencies and their trading desks as well as publishers. Martech on the other hand is often sold on a subscription basis or SaaS model, often involving a set-up cost in addition to monthly recurring fees and is often sold directly to marketers.”
Amobee Australia and New Zealand managing director Liam Walsh:
“Martech normally means your CRM system and things to do with site-side optimisation. Martech is managing customer analytics, processes and workflows and traditionally it hasn’t touched on advertising, as its business problems were different. Ad tech focuses on advertising and putting messages in front of people to drive them to do something. Fundamentally ad tech is a bunch of systems and technologies that manage the buying and selling of ads. One isn’t better than the other and over time their roles and purpose will converge. When that happens, they will have a fancy new name.”
Yahoo7 national director of data, platforms and exchanges Ben Green:
“Ad tech and martech typically refer to quite different technologies and functions. Ad tech referring to advertising executions across search, display, video, social or native channels powered by anonymised audience data. Whereas martech refers to platforms often powered by data from a customer relationship management (CRM) tool with personally identifiable data and executed across email and direct marketing channels, customer experience platforms like content management systems and measured using web analytics or social listening tools.
Quantcast ANZ managing director Andrew Double:
“Ad tech is about reaching prospective new customers and you need a lot of technology to do that.
I think ad tech and martech all sit as one. Martech is an extension to CRM. Ad tech is also about understanding your customers. I don’t think the distinction being made in the market is as clear-cut as people are saying.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at firstname.lastname@example.org