Why the Dichotomy Between Ad Tech and Marketing Tech Is Dysfunctional

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Abstract geometric technology graphic elements - Stock image
Abstract geometric technology graphic elements - Stock image Credit: RGAP/iStock

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.

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, 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.

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