Customer-obsessed marketing

Why The Convergence Of Adtech And Martech Matters

Mary Pilecki Vice President, Research Director
Melissa Parrish Vice President, Research Director
September 14, 2017

As we covered in our recent webinar, the convergence of advertising technology and marketing technology is inevitable — and that’s a good thing for marketers.

The union of these two tech worlds is part of an emerging broader marketing mindset shift that focuses on quality rather than scale. Today’s customers demand experiences that are engaging and relevant, and the right technologies will help companies deliver just that.
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Here are some key takeaways from our discussion:

Convergence is happening in part because the adtech/martech ecosystem is commoditized and overcrowded.

Marketers say a major challenge for their teams is the lack of technology required to deliver seamless experiences throughout the full customer journey. While 58% of B2C marketers want to reduce the number of vendors they use, less than one-fifth believe they can get everything they need from a single vendor. Convergence will enable firms to purchase less — but more effective — technology.

Marketers, vendors, and agencies will all contribute to and benefit from convergence.

Enterprise martech vendors are the ones dictating the path of the convergence, but all parties involved have the opportunity to reap its benefits.

  • Marketers will be able to master the customer journey as data and orchestration consolidate and allow for more precise personalization.
  • Martech vendors will maintain their growth curve and deliver real-time analytics at scale as convergence gives them access to adtech’s technical expertise and media ecosystem.
  • Adtech vendors will be able to leverage martech’s presence in the customer life cycle to extend beyond acquisition, and first-party and transactional data will enhance their ability to target.
  • Finally, agencies will tap into new markets and, while they may be forced out of their creative/media-oriented comfort zones, they’ll have the chance to become trusted advisors to marketing organizations.

Adtech martech convergence will play out in five phases, and we’re just in the first phase today.

We’re currently in the beginning phase where audience data and insights converge. There isn’t enough evidence that data is being used practically and intelligently just yet. Right now existing tech silos will break down, and we’ll continue to see martech vendors lead the convergence by buying and consolidating with some adtech capabilities to give clients access to everything they need. In the webinar, we identify the seven big vendors that are best positioned to drive consolidations. Once data is being used more effectively, these phases will follow:

  • Phase 2: Marketing orchestration bifurcates: Convergence will result in two main application categories: continuous engagement and delivery endpoints.
  • Phase 3: Specialty vendors mind the gaps: There will be an explosion of niche vendors seeking out specialized markets, meaning the landscape will get more complicated before it gets simpler.
  • Phase 4: Buy-side consolidation: This will begin with partnerships and mergers, then will escalate into full acquisitions.
  • Phase 5: Parallel platforms: Some martech platforms will dabble in sell-side tech, while others will go into “back office” tech. These will ultimately sit next to media and social platforms.

How can marketers actively manage the convergence? Watch our complimentary on-demand webinar for more insights and actionable steps you can take to get ahead of the convergence.

Related Forrester Content (For clients or purchase)

Report: A More Perfect Union: Adtech And Martech Convergence Will Revolutionize Marketing
Report: The Top Emerging Technologies For B2C Marketers
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