Madtech: convergence of adtech and martech creates incredible opportunities – but buyer beware

By Elliott Clayton

Generally, adtech is where budget is invested in acquiring customers – typically using third-party data and data management platforms to build efficiency. Meanwhile, martech is about talking to existing customers and leads that a brand has an existing relationship with, using first-party data and efficiencies from customer development platforms.

There are many parallels between martech and adtech, and there’s a point of convergence that is already happening – the result of this convergence is what some are coining ‘madtech,’ though I’d prefer a less cringe-worthy name for such an important industry evolution…

Importantly, the technology being defined as ‘madtech’ isn’t a trade-off. It’s not inferior to either martech or adtech; rather it’s an evolution of the two previously siloed technologies. This evolution is a result of necessity – for both marketing and advertising functions within businesses to have complete oversight of consumer interactions with a brand, and the further ability to act on that insight.

This can only be achieved by combining technologies, to afford brands with first-party data collection at every touchpoint of their relationship with individual consumers, the reach and technology to act on that insight, and the ability to report on the success of the activity.

Consider this: a consumer visits a brand’s website after seeing an advert for them online. It’s their first ever interaction with the brand, and they realise on the brand’s website that they live near one of the brand’s physical stores. Later that week, they visit the store and purchase a low-value item. Now, with disparate adtech and martech systems, the brand would not be able to link these online and offline interactions – they may even have trouble linking the off-site and on-site interactions, the advert and the website visit. However, madtech keeps track of all of these interactions and can trace the value earned back to the activity that truly generated it – in this case, the online advert. Further yet, these interactions – when fully tracked within a madtech platform – can be used to spur further interactions, continuing and advancing the consumer-brand relationship.

Now, take this example one step further, and consider if the customer went on to make several higher value purchases throughout the following year and beyond, as a result of the brand continuing to interact with them based on that consumer’s unique circumstances. With madtech, the brand knows that it’s the same person receiving their communications and making the purchases. As such, the brand understands the consumer’s lifetime value and knows how much – and where – to invest their marketing spend to keep them loyal.

Finally, consider this happening at massive scale, to thousands, tens of thousands, even hundreds of thousands of consumers at the same time. This is madtech, and the ability to leverage consumer demand that would otherwise have been neglected or harnessed by rivals is why it’s happening.

The big advantage: omnipresence

Madtech’s big advantage over martech or adtech is that it commands greater omnipresence. By definition, madtech can reach – and measure – consumer interactions across more channels and touchpoints than either. As such, there’s potential to build a greater understanding of consumers, how valuable they are to a brand, and how much they should invest in building a relationship with them. In short, there’s greater potential to understand a consumer’s lifetime value and react accordingly – whether that’s via a series of adverts, an email, even a person-to-person conversation in a traditional brick and mortar shop.

However, crucial to all of this is the capability to identify an individual.

Now, I’m not talking about the true identity of an individual – their name, for example. That would be incredibly invasive and – rightly so – would get everyone involved in deep trouble with regulators. Instead, I mean the capability for madtech to recognise who it is that’s interacting with the brand, then match that individual to a pseudonymous profile to both better understand that individual, and to deliver incredibly relevant messaging to them at that precise moment in their life.

However, despite persistent claims by some adtech, martech and now madtech vendors, very few vendors can achieve this. It’s incredibly hard to get this capability right – meeting legitimate privacy concerns while also providing marketers with the critical ability to identify consumers wherever they are – both online and offline. And without accurate identification, then there’s the obvious risk of delivering highly targeted messaging to the wrong people – at scale. Worse still, the pseudonymous profiles could be updated with information on incorrect individuals, meaning all future messaging and a brand’s understanding of their customers is at risk of being incorrect. This time, at tremendous scale.

Simply put, as is the case within both adtech and martech today, there are both superior and inferior platforms and services. Purely because there is this evolution towards madtech, it does not mean that the quality between competing services will equalise. Differentiating between effective and inadequate platforms is likely to be just as much of a minefield as it is today, yet it will be an even more critical consideration for brand-side marketers.

After all, thanks to madtech’s greater sphere of influence – a huge positive when capabilities are honed and implemented effectively – a lacking platform, or an incorrect implementation of madtech will negatively influence an even higher number of activities and budget. Here, factors such as identification, reach, persistence, decisioning, delivery, and measurement will be big differentiators between platforms, and critical points that are essential for marketers to question any potential madtech vendors on.

Elliott Clayton is senior vice president of Media UK at Conversant.

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    What on earth is this ? Nearly one thousand words of old/new bollocks that is merely a regurgitation of the insufferable language that has taken over the ad biz. God… Can you imagine sitting through a new business presentation by Mr. Clayton?
    Cheers/George