Digital media types have been buzzing for a while about a shift in the marketing tech world: Marketing tech is being drawn closer to advertising tech, and this is going to change the way advertisers and publishers do business. The messaging in advertising will become more personal, and in order to do that, they’ll need to lean on publishers’ relationships with their audiences for relevant data insights.
That said, many in the industry have observed it’s taken a while for the promised “ad tech/mar tech convergence” to get off the ground. To get a better idea of the state of the convergence, and of what’s still holding it back, LiveIntent recently commissioned Forrester to survey marketers for their perspective. The resulting study, “Kick Start Your Ad Tech/Mar Tech Convergence,” found that marketers know mar tech capabilities are coming into advertising, and they want it to happen. But they often struggle to communicate to their colleagues what that convergence means, and they face roadblocks organizationally, within their companies, to speed the process along.
We wanted to get a sense of what the convergence of ad tech and mar tech means, beyond the buzz, and we wanted to know what publishers can do about it right now. I called up LiveIntent COO Dave Helmreich, who gamely broke it down for me.
BRIAN LaRUE: As the Forrester study suggests, there is some confusion about the distinction between ad tech and mar tech. Where do you stand on the difference?
DAVE HELMREICH: Ad tech over the past 10 years has been historically associated with prospecting the unknown. It’s deployed in channels that are reserved for unauthenticated visitors. You don’t really log into video. You don’t always log into publishers when you click through on a Google result to an article. Ad tech uses cookies, cross-device methods, machine learning and AI because it has to. There’s a massive amount of data, and there’s a ton of computing power spent to say, “I think this is Dave Helmreich, and I think I can put an impression in front of him that he may like.”
Mar-tech has historically referred to marketers’ one-to-one relationship with a known person in channels where people have logged in, like email or social. Accuracy is paramount. There is high fidelity and very low fraud. It’s very well-suited for financial services, retail, hospitality, consumer packaged goods—very large spenders across large verticals. The technology in the mar-tech world is not as innovative and daring, but it’s battle-tested, it’s enterprise grade and it’s in authenticated environments.
Bringing the two together means you’re able to do one-to-one marketing in all of those environments, including the open web.
BRIAN: You wrote an article for VentureBeat last fall where you said, “Marketing implies a continuing relationship with a known person, rather than shots in the dark. Advertising is more transactional.” It seems to me the entire digital ad industry really wants those relationships and is going in that direction.
DAVE: You’re right, the advertising industry is desperately seeking these continuing relationships with people. Advertisers have always envied marketers’ relationships with consumers in places where consumers spend a lot of time, like social and email. But they’ve also laughed at the lack of sophistication in some of those marketing tools.
That’s changing. It’s now possible, with the convergence of platforms in mar tech and ad tech, for brands to have those one-to-one relationships. Marketing is looking to the sophistication of what advertising has had to solve for, and bringing it into their world to make marketing more powerful and more efficient. As a result, we’ll see less of people sitting in either advertising or marketing, and more of people focused on driving value in their relationships, in control of the conversation regardless of the device or environment.
BRIAN: If there’s interest in bringing ad tech and mar tech together, what’s holding up the progress?
DAVE: There’s the scale roadblock—the sheer challenge of any individual publisher to have enough logged-in users to effectively compete with a Facebook or a Google. We’ve seen some news lately about publishers putting consortiums together—more so in the EU, but increasingly in the US—to challenge some of those scale issues.
Secondly, a bit more nefarious: the recent study we did with Forrester found the biggest hurdle was that organizations operate in siloes. The CRM and marketing team sits in one area and manages customer data, and the ad tech and acquisition team sits in another. They have different budgets for different applications and activations. That challenge isn’t technical—it’s getting the teams to work together, from a people and process perspective. That being said, the ones that have already built bridges uniting these disparate groups have a first mover advantage over their competitors.
BRIAN: What functions or processes are actually converging or changing for advertisers, and also for publishers?
DAVE: There’s been a ton of work done to optimize engagement for messaging. If you hit someone with the right message at the right time, they’re much more likely to engage, but without being able to market in advertising channels, there’s a lot of guesswork involved. Traditionally, marketers have been hampered because, one, they don’t have the ability to measure frequency, and two, they don’t have the ability to send someone an email 12 times and have them open it every time. They have to extend outside of known, logged-in channels, and outside you can over-market or under-market.
Brands are more than willing to pay more, by cost per acquisition or for impressions, to reach known people that were previously unknown. The good news is, that’s on publishers’ real estate. The brand wins because they build better relationships, the customer wins because they’re not getting treated like a stranger by the messaging, and publishers win because they’re generating more RPMs.
BRIAN: Does this convergence mean more tech implementations for publishers?
DAVE: I don’t think it will. The heavy lifting will be in modifying the existing implementations and platforms. The tech lift for publishers will be a matter of leveraging the right IDs to float through the publisher tags with vendor partners. They’ll allow brands to activate people-based messages into the technology platforms. Publishers’ investment will be in people on their end who understand the value of people-based marketing and can sell direct, people who understand how to grow your footprint and increase your logged-in audience. Teams connected to audience development will create a better relationship with the consumer, rather than relying on social platforms to drive their audience.
BRIAN: This means there’ll be a change in the way tech vendors communicate with each other and share information, right? Do you expect there’ll be any trust issues among vendors?
DAVE: Vendor participation is the way to do it without requiring changes in tech resources from publishers. Historically, relationships between technology partners have had a winner and a loser. But I do believe the consortium announcement that we’re a part of is one of those rare win/win/win scenarios. We joined together with AppNexus, LiveRamp, MediaMath and others to create a standard identity framework that enables both buyers and sellers of programmatic to create more relevant campaigns, to stop treating their best customers like strangers. This is one of those areas where there actually is a lot of trust, a desire for transparency, a focus on privacy. And it’ll ultimately benefit publishers.
BRIAN: How much does this convergence really impact publishers’ business right now or in the very near future?
DAVE: Publishers’ inventory becomes significantly more valuable when it’s people-based. You see this today in programmatic and audience targeting. If a brand or a trading desk knows something about someone, they’re willing to pay more to reach them. And if a brand has their entire marketing database at their disposal, they’re willing to pay a lot more. We have clients that are willing to pay two times or three times or four times the publisher’s average CPM when they know much more about that audience.
BRIAN: Given the insights publishers have on their audience, what can they do to take the initiative and accelerate the ad tech/mar tech convergence on their own?
DAVE: Publishers have always been focused on what they do best—audience development, content, customer acquisition. But the world is changing quickly, and the first thing is that decision-makers inside publishers need to be informed. Publishers once had a love/hate relationship with programmatic, also, but now it’s changing how they do business. And once they are informed, they need to over-communicate to their internal constituents on how they are executing against their strategy.
Second, read up on how solutions like the consortium work, and how publishers can proactively engage with technology platforms. If your inventory is not well lit, well-understood, well-connected to, it’s going to be worth less.
Third, continue to build your audience development team and focus on building logged-in audiences. Don’t cede that audience to Facebook who can change their algorithm any day and put you in a penalty box.
And lastly, take advantage of the email newsletter. It’s a way to advertise, to drive traffic, to engage, to acquire, to reach lapsed customers.
BRIAN: What changes now in the way advertisers make use of their customer data, and what can publishers do to be better partners to their advertisers?
DAVE: A day doesn’t go past without me hearing from an advertiser that wants to put their CRM database to work. The combination of deterministic data—an email address, which you use to log in everywhere—and probabilistic data—third-party and intent—helps you continue the conversation with a consumer across devices. The best partner for an advertiser is a well-informed publisher. “Well-informed” means having a large logged-in audience and a lot of data, and attentive to organizations like AdMonsters where detailed conversations about new ideas happen. To be a better partner, publishers need to encourage their employees to be passionate about changes, and to embrace organizations and advertisers that promote thinking about new methods of driving incremental value.