Few topics get more air time in marketing circles than the convergence of adtech and martech. The commentary ranges from attempts to agree on the deceptively simple semantics of adtech and martech–which usually ends when everyone throws up their hands and concedes that it is simply madtech–to existential examinations of the future of marketing itself.
To start, let’s recap the respective definitions of adtech and martech. Advertising technology encompasses the systems that enable the buying and selling of advertisements, whereas marketing technology includes the systems that manage customers, analytics, workflows, and content. To the casual observer, the two appear inherently related. Over the years, though, they bifurcated as marketing organizations became highly sophisticated and developed specialized skills, driving a wedge between the two capabilities and setting them on separate, albeit parallel, paths.
Some reactions to looming convergence approach satire, sometimes even intentionally. Like the war-room-bound leaders in the movie “Dr. Strangelove,” we wonder: Are we heading for mutually assured destruction? Is somebody harboring a doomsday device? Have our deterrents been rendered useless? Which side will strike first? Who’s really in charge?
Yet these questions are surprisingly apt in the context of convergence. It should surprise no one that adtech and martech convergence evokes strong feelings. Modern marketing is a technology-driven discipline, and any widespread change will reverberate throughout the ecosystem. Convergence impacts the future of thousands of vendors (and their investors). It affects day-to-day marketing operations for tens of thousands of brands (and their agencies). The excitement, mystery, and controversy surrounding convergence speaks volumes about the marketing industry’s collective aspirations and fears. Beyond the idle speculation of industry observers, marketers need to know how convergence will play out and what it means for their stakeholders, especially their customers. Thoroughly understanding adtech and martech convergence is critically important because it drives:
- Economic throughput: Convergence impacts the allocation of literally tens of billions of dollars in marketing budgets by redefining the path of marketing spend across technology, data, media, and content.
- Contextual marketing: Convergence advances the technology stack for customer-lead marketing organizations to effectively engage with their customers across touch points and devices throughout the customer life cycle.
The first major question about convergence is “why now?” Historically, there simply hasn’t been an adequate business case endorsed by a broad enough set of stakeholders to bring the stack together. But today, several market forces drive diverse incentives to clear a legitimate path for adtech and martech convergence. The complex technology landscape drives a desire for consolidation, marketers must deliver cohesive cross-channel experiences, advertisers demand transparency and ROI, traditional exit strategies for startups are vanishing, and social and media companies are tightening their grip on consumers’ time and attention.
Source: Forrester Research, A More Perfect Union: Adtech And Martech Convergence Will Revolutionize Marketing
The second major question about convergence is “what’s in it for me?” It’s tempting to conflate this perfect storm of disruption with apocalyptic outcomes, but Forrester’s research clearly shows that convergence is not a zero-sum game. Advertising and marketing tech are ultimately accretive to one another and all the parties involved will contribute to and benefit from convergence:
- Marketers master the customer journey: Adtech and martech convergence offers the technical underpinnings to finally eliminate the disjointed experiences that consumers despise.
- Martech vendors maintain their growth curve: Convergence gives martech vendors access to adtech’s technical expertise, computing infrastructure, and media ecosystem know-how to extend existing solutions into digital, mobile, and media touch points, leverage online behavior data streams, and deliver real-time analytics, orchestration, and delivery at scale.
- Adtech vendors gain a path to success in a broken ecosystem: Convergence benefits adtech vendors by reducing reliance on media-oriented business models in favor of direct client relationships, providing a hedge against privacy, fraud, and regulatory threats, and legitimate differentiation in a highly commoditized ecosystem.
- Agencies tap into massive new markets: Convergence gives agencies visibility into more budget dollars to drive the strategy and implementation of broader customer journeys and opportunities to develop proprietary data and technology offerings.
Adtech and martech convergence is an important trend with long-term implications, but it’s only a starting point in a long-term business reboot that reconnects advertising with marketing. Adtech and martech convergence is first out of the gate due to the overwhelming need to refactor the technology ecosystem into a sustainable market and build the infrastructure for unified cross-channel customer journeys.
To fully benefit from these changes, marketers and their partners need to anticipate and proactively manage the wide-ranging impact of convergence on their tech and services road maps, organizations, processes, and budgets.