Jan. 14, 2016
By: Dave Morgan
Late last month, I wrote that one of the headlines we’re certain to see in the trades in 2016 will be that “Marketing Tech Will Eat Ad Tech.” A lot of folks reached out to ask me why I thought this would happen, so I’ll use this column to give you a few of my high-level thoughts on the issue.
Media and marketing channels like newspapers, magazines, radio, telemarketing and direct mail suffered mightily over the past 15-plus years, as “ad-tech” — the multibillion-dollar tech industry providing ad serving, targeting, retargeting, analytics, machine-bidding and buying, etc. — was applied to Internet-born behaviors like Web browsing, search, social and email. Ad tech created, at least theoretically, a better way for marketers to deliver the right message to the right person at the right time — a massive improvement over those legacy alternatives. Thus, we have an ad-tech industry today that is worth tens of billions of dollars.
However, over the next five years we will see ad tech supplanted, albeit short-circuited, by technology and companies that directly serve marketers and their enterprises — rather than ad industry ecosystem intermediaries, where most ad tech today is centered.
Think closed-loop marketing platforms, omnichannel data mining, prospect profile management systems and dynamic messaging and pricing systems. Think companies like Oracle, Palentir, IBM, Neustar and Adobe. Here’s why the marketing-tech space will become much more important:
Future of ads about business outcomes, not media outputs. The future of advertising is about delivering ads to specific people and driving predictable business outcomes — sales, particularly — and ROI. Every day, it will be less and less about impressions, CPMs and unduplicated cookies.
In a world that is outcome-centric, technology will need to be marketer- and enterprise-centric, since marketers’ colleagues in sales, merchandising and analytics will need to be involved as well.
Speed. Technology focused on connecting all of a marketer’s ads to outcomes and ROI will have to deliver results and insights to the marketer fast. Just look at search, which will mean lots of integrations into customers, sales and service systems through the marketer.
Protecting consumer relationships and proprietary data. As advertising becomes increasingly personal, and more and more of their first-party data is used in the process, marketers will need to more closely and directly control all advertising communications and resulting relationships. At the very least, the protection of privacy and proprietary data will demand it. Once again, just look at search.
Supply-chain problems. The digital ad supply chain today is a mess, despite years of discussions at the highest levels about the need to clean it up. It is leaking many, many billions of dollars to fraud, bots and un-viewable ads, and has resulted in a consumer experience with widespread interest in, and adoption of, ad blockers. Marketers have too much at stake to continue to allow ad tech to pollute the water where they fish and take sustenance.
You don’t think that this will happen? Just look at how search is managed today. Most of the management happens through the marketers, most of what is done is kept highly proprietary, and the work is handled largely through software systems.
What do you think?