Why do IT organisations need to care about AdTech?

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Digital transformation is bringing CRM and AdTech closer together. With technology central to data-driven strategies, marketing is no longer the preserve of marketers…

Traditionally IT organisations have considerable knowledge of Customer Relationship Management Systems (CRM) and have spent a lot of effort on their consolidation and creating a single customer repository as a basis for a multichannel or even omnichannel architecture. On the other side the vast majority of IT organisations do not have any knowledge about advertising technology (AdTech). Decisions in this space were taken by marketing departments looking after digital media in isolation and the knowledge very often was solely with vendors. And to a certain extent that model worked and was sufficient.

CRM and AdTech in the past had very little to do with each other. But keeping these areas separate no longer works. Why is that?

The answer is simple: digital transformation has reached advertising and is radically changing the advertising landscape and is bringing CRM and AdTech together. Some call the combination of both Mar(keting)Tech some just use it for advanced CRM (What the hell is the difference between AdTech and MarketingTech?). I will use MarTech for the combination of advanced CRM and AdTech).

Programmatic is becoming mainstream and starts to go well beyond display advertising. It basically boils down to automating the process of ad placements and customer next best action on own and paid media. Manual is no longer an option as we talk about adverting decisions being taken on an individual impression level, which for bigger companies translates into billion plus decisions a month.

In order for programmatic advertising to work not only the creative process needs to change (programmatic creative) and provide tailored advertising for different target groups but customer identification, privacy, security, data and analytics become key as well. To place relevant ads on an impression level requires identifying the customer, making knowledge about the customer in real time available while respecting privacy and making automated decisions.

The IT industry has reacted to that and the big vendors like Adobe, Oracle, Salesforce or Marketo have created Marketing Clouds (see: the big four marketing cloud vendors according to Gartner) that promise to integrate classical CRM functions like campaign management, customer reporting and analytics with AdTech like ad servers, Data Management Platforms (DMPs) and Demand Side Platforms (DSPs).

So are Marketing Clouds the silver bullet to bring CRM and AdTech together to enable data driven marketing and customer experience ? Can a single vendor handle it all for you?

I suppose that is what a lot of these companies will tell you, but it is not happening. Scott Brinker, who has been analyzing the Marketing Technology Landscape for years was betting up to last year that marketing technology would consolidate around a single platform in large and medium-sized organisations. However in mapping out the landscape for 2016 he realized:

“… that “one platform to rule them all” model has not materialized in a lot of marketing departments. (..) Instead, many companies have multiple platforms in their marketing technology stacks”

Scott Brinker March 2016

Did Morgan Stanley just kill the single vendor marketing suite?:

Why are marketers selecting “best of breeds” solutions? Well they want to avoid vendor lock-in with a single marketing technology provider and as this is not a commodity market but one driven by innovation no single vendor has all the capabilities larger companies need — and, indeed, many companies are now successfully embracing that more open and heterogeneous approach. And there is another very strategic argument I would add. Many companies realize that customer data is a strategic company asset they need to stay in charge of. They do not want to go down the slippery slope of losing the grip on their own customer data and leave its management to third parties.

“Quickly grabbing onto the idea of owning and managing their data has been disruptive. Increasingly, brands are going direct to technology companies, picking the technologies they use, owning the relationship, contract, and driving the ship“

MediaMath global CMO, Joanna O´Connell

As especially in the AdTech space the experience has been that the interest of the own organization and third parties like media agencies are not always the same to say the least.

Still companies will outsource a lot of services and benefit from an ecosystem but they will stay in control of the architecture and the customer data and that is where I think IT can make a valuable contribution.

From a technology standpoint there are two developments that make the heterogeneous multiple platform approach more feasible:

  1. A lot of marketing technology vendors offer open APIs and provide preconfigured connections to the rest of the marketing technology ecosystem.
  2. A new category of products “marketing middleware” solutions or to use yet another acronym iPaaS (integration-platforms-as-a-service) provide the glue to make sure no new silos are created that prevent the 360 view of the customer or an omnichannel customer experience.

And still there is a lot of work to do to make MarTech projects perform.

IT organisations need to understand that the convergence of AdTech and advanced CRM demands not simply an extension of existing CRM based architectures with the known principles of Enterprise Integration.

The challenges of customer identification, onboarding offline and online data of different persistency, designing an appropriate privacy policy and managing the interaction with an emerging data ecosystem need new approaches. To make things even more complicated the landscape changes constantly (7 Marketing Technology predictions for 2016).

Posted by Dirk Rohweder

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