Why the false dichotomy between adtech and martech is dysfunctional

Adtech vs. Martech

Would you agree that advertising is one facet of marketing?

Yes? Okay, then advertising technology (adtech) is naturally one facet of marketing technology (martech). If you like diagrams, you can visualize adtech as a small circle contained entirely within a larger circle of martech. Adtech is a subset of martech.

But for years, people have been propagating the notion that adtech is a field separate from martech. In diagram form: two circles that don’t even intersect, or at most, overlap only a little bit.

Adtech vs. Martech Circles

I’ve heard a variety of rationales for why people claim adtech is something different than martech. Some say adtech is for paid media, while martech is for owned media. Some say adtech is for agencies, while martech is for in-house teams. Some say adtech earns its revenue from a slice of media spend, while martech earns its revenue from software-as-a-service (SaaS) subscriptions.

Yet upon even causal examination, all of those boundaries fail to delineate the two.

Tools for programmatically purchasing display advertising, such as demand-side platforms (DSPs), are considered classic adtech. Quinessential paid media, right?

However, ads on search engines are paid media too, yet the tools for managing that are not typically considered adtech. The same goes for social media marketing tools managing paid ads on Twitter, LinkedIn, Instagram, and Pinterest.

But it goes beyond advertising of any kind too. Influencer marketing services — for instance, Famebit, which was recently acquired by Google — enable brands to pay people to promote them, clearly a paid channel. But again, they’re not thought of as adtech.

In the other direction, data management platforms (DMPs), essentially a database of audience profiles, have been considered one component of adtech. They were originally used for targeting and re-targeting of advertising. But increasingly, DMPs are also being used by in-house teams to also personalize their websites and email campaigns, which are owned media.

So paid media does not define adtech.

As for the line between agencies and in-house teams, it almost goes without saying that there is no such line any more. Some brands have brought programmatic ad buying in-house. Even when the ad buys are external, DMPs are increasingly based in-house because brands want to control their own audience data.

Vice versa, agencies are providing all kinds of marketing technology services beyond the realm of advertising: website development, search engine optimization (SEO), social media marketing, conversion optimization, content marketing, influencer marketing, and so on.

So being operated by an agency does not define adtech.

Finally, for revenue models, indeed, some portion of adtech gets paid by taking a slice of the money spent on media purchases, primarily networks and exchanges. But many other adtech-related solutions have different models. DMPs, creative optimization tools, tag management, measurement and attribution products, etc., often use SaaS subscription models. Data suppliers and aggregators charge by the digital pound for data, a different axis than media impressions.

On the other side, the slice-of-media-spend model is arguably just a special case of transaction-based pricing. There are plenty of martech solutions that charge by transactions instead of flat-rate subscriptions. Email service providers (ESPs) that charge by the number of messages sent are one example.

So revenue models do not define adtech.

Which begs the question, what does define adtech? To state the obvious: adtech is simply technology that helps marketers and agencies manage advertising. At least advertising that we don’t think of as a special case of something else, like social media marketing. And it’s all a part of the broader martech universe — technology that helps with marketing of any kind.

Admittedly, that definition is fuzzy, because the technology we use in advertising is often valuable in other facets of marketing too. DMPs are the perfect example of this.

But that’s why semantic arguments about adtech and martech are dysfunctional. There is no border between the two that actually matters to a business or, more importantly, to its customers. It’s just a label.

On the contrary, when we emphasize an artificial boundary between the two, we lose sight of the larger revolution happening between marketers and the marketed. The goal is to create more seamless, synchronized, and customer-centric experiences for our audiences across all channels and touchpoints — paid, owned, earned — regardless of who operates it or how it is paid for.

This column was originally published by Ad Age on March 1, 2017.

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  1. Charlie TARZIAN says:

    Scott

    The last paragraph says it all – the ultimate definition of anything is in its performance. We take all this chatter about Adtech this and Martech that – as a smokescreen, an avoidance of what we really need to be talking about.

    The landscape that you portray is about companies coming to market with platforms. These single point solutions have not taken into consideration the bidirectional needs of not just data being shuttled to and fro – but of logic built on data science – that can also be conveyed across the piece – so that a brand can be holistic – in its execution, based on how it continually informs itself across oh so many complex behaviors and actions.

    The fact is – none of these platforms are built to accommodate the needs of brands to keep up with the true, non-linear way consumers move across the so-called Buyer’s Funnel.

    As a result – DMP’s are underused, retargeting is still as primitive as it was 10 years ago, ad serves-to-landing page playbooks don’t mirror the way the human mind works, real time personalization – as proposed by some – is welcoming people to a brand website by recognizing what company they are coming from – and not what product/service they may be interested in, B2B AdTech providers offer little transparency: what sites were my ads served on? How contextual were those serves? How many people from that account have actually served ads to and how many of them are actually the ones I want to serve them to?

    The net result is more questions than answers.

    The challenge for all of us is to take a step back and ask what do we want all of this tech to do? What are all the use cases not across the stack but across the actual way people with needs come to a decision about who they will do business with.

    Therefore, until you have your playbook built out and aligned across all manner of communications needs, it is better to go slower and build on the LOGIC that can be conveyed, across any and all data receivers both internal and external – and decide what you are going to spend either to build, buy or rent – based on how much you have learned and have seen work with your own eyes.

    BTW – on the issue of the differences between AdTech and MarTech – they are many. If we can import the strength of AdTech – which is the speed with which it makes decisions (10ms or less) into MarTech – which tends to be linear and slow – we will probably see some interesting things. On the other hand, if AdTech can take data as seriously as MarTech – and still make those lightening fast decisions – then we have a winning combo.

    One last thing – if we can do these things – and offer client organizations real transparency and an agile marketing framework – we will have done our jobs – at least for now.

  2. How about this:
    – AdTech is for the acquisition of audiences who where unaware of your existence
    – MarTech is to nurture relations with said audiences to bring them to activation/conversion, and beyond
    – Everything underneath is The Platform: DMP, Analytics, Targeting engine, Contents, Asset Management, Mobile services, etc.
    To a vast extent, I consider The Platform as an extension of the underlying technology, ie an ecosystem of IT services made available as a foundation to AdTech and MarTech tools.

    • It’s as good an adtech/martech split as any, I suppose. Although I can’t help but think of retargeting and ABM-powered ad targeting that use advertising channels to reach known prospects/customers. 🙂

      But I agree with 100% on your vision of “The Platform” underneath all of it. That’s where the gold is.

    • Charlie TARZIAN says:

      Vahe

      we need to make Scott an honorary Armenian or something since we are the only ones chiming in here:-)

      I am much more inclined to agree with Scott on this one:

      – AdTech is definitely misnamed in the sense that we can and do morph it more into MarTech
      – using 2nd Party data (appending client data with 3rd party intent would be one good use case) marketers can now deploy MarTech thinking into the ad unit across any and all scenarios
      – some examples:

      : we now create ad nurture streams much like we have built email nurture streams in the past = so based on a device or account behavior – we move with the rhythm of that behavior
      : we now monitor accounts for Churn – using intent based data – it is never a good thing when a client is researching something you have already sold them – especially with a renewal coming up
      : with the speed of deployment thru AdTech, you can create messaging based on unforeseen events – two of our clients deployed AWS S3 outage messaging on Wednesday AM, less than 16 hours after the outage and we saw an incredible spike in activity at the clients’ sites – and the messaging was as much for current clients thinking about making a switch to AWS as it was to net new prospective accounts

      so simple framing of AdTech as the frontend and MarTech as the backend is not perfect

      also – data coming from CRM systems into AdTech is another great use case – where there is a change of state inside of SFDC that requires a change in messaging thru AdTech (and MarTech) is another great example of how there are so many new and impactful uses for that stodgy old ad unit

  3. Louis moynihan says:

    The reason why we started talking about the convergence of AdTech and MarTech a few years ago is because they were completely disconnected with little to no data flowing between them. I think what Scott is bringing to light is their expanding connection points and how they have become more integrated. However we are nowhere near done and are only in the first inning of the convergence. Instigating customer journeys across channel is one thing but rationalizing them and orchestrating the next touch point is something different. Is orchestration the buzz word to replace the past silos of AdTech and MarTech?

    • Orchestration can only happen when there is transparency. AdTech has a ways to go until that happens. Most vendors provide black boxes and very little data.

      • Fascinating piece Scott! Two points of contribution:
        1) Scott, totally agree with the premise of your article. Marketers tend to separate and define technologies when the objective of all of them is (should be) to acquire knowledge, target better, engage across stages of purchase, and learn how to do all of this increasingly better over time.

        2) I don’t know that I invented the concept of Orchestration but have been writing about it in the context of ABM for a couple of years (http://www.accountbased.marketing/strategy/6-keys-to-account-based-marketing-success-infographic/). Last year I conducted primary research on the topic (n=500) and it identified the path to high performance using Orchestration: 18% of ABM programs outperform all others, largely by applying the following approach – 90% produce versioned content to address specific needs; 85% can change content to reflect account engagement and advancement through buying cycle; >50% use 2.5X the channels and have lower dependency on display advertising. Higher performing Orchestration is really outside-in by it’s nature, using the digital exhaust of a tech stack to identify needs and topics of interest and then in turn respond using that knowledge to address specific audience needs… rather than marketer desires.

        • That’s a gr8 add, Mark and a gr8 way to highlight the need for Orchestration – once an organization has it’s content in order and has enough to support use cases across products by industry, persona, current relationship, etc… then it’s time to take that foundation and push it to include real time personalization, customization into the sales stack (inclusive of channel) and to use the ad unit to support the content as a hero. I know you are hard at work on Orchestration in your new endeavor and look forward to hearing about it. Nicely done.

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