ADOTAS — In early October, Nissan announced that it had signed a new three-year contract with Omnicom Group, which will launch a new global agency unit to centralize all its marketing. This was a very smart move by Nissan, a big win for Omnicom and substantiating news for anyone who believes that the consolidation of media and marketing is eminent. Brands, agencies and major ad tech providers are all sending signals that ad tech is too fragmented and that closing the cross-channel media and analytics loop is coming in a big way. This consolidation is happening in three main ways: acquisitions, bankruptcy and the development of new software.
Google is the clear industry leader. They have acquired companies like; Wildfire, AdMeld, DoubleClick, Invite and AdMob for their ad tech stack. However, other strategics like Adobe and Salesforce have each invested billions of dollars to acquire point solutions for their respective marketing clouds. Salesforce acquired Radian6, a social listening company, Buddy Media, a social media optimization shop, and ExactTarget, an email marketing company, for a combined $3.51B. Adobe has also been very active in the marketing tech acquisition game. With hopes of adding new functionality to its Marketing Cloud, Adobe acquired Omniture, a site analytics company; Efficient Frontier, a search and social optimization shop; and Neolane, a conversational marketing technology partner, for a combined $2.8B. The long-term goal for any marketing cloud is to mature to a point where a brand can conduct all of its marketing efforts within one platform.
As a founder and entrepreneur, I’m sensitive about calling others out for their failures. My own productive paranoia reminds me that we’re all a few wrong moves and a handful of bad luck away from running out of runway. However, ad tech did see several companies die this year including adBrite, a company that had raised over $40M. Bankruptcy results in less duplicity in the landscape, thus further consolidating the space. As Steve Jobs said in 2005 “Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new.” Terry Kawaja of LumaPartners also highlighted some of the benefits of failure in the ad tech space, claiming that consolidation is inevitable as the market cannot sustain the continued growth.
Workflow Automation: Write it down and cozy up to it because it’s the next big area of disruption in marketing. By definition, it’s the ability to automate business processes. Its purpose in marketing is to reduce the amount of human work hours that it takes to manage a client, buy media and analyze the performance. The software is not meant to replace people; it’s meant to give them their time back. There are a few companies, operating at scale, who are focused on this. MediaOcean, a merger between Donavan Systems and MediaBank, is one of the companies bringing a solution to market. Their CEO Bill Wise said that they will become the “app store” for advertising. Other players in the space are squarely focused on solving this problem and connecting most of the digital and mobile channels of marketing into a ‘cloud’ platform.
Ultimately, I don’t think the winning formula for the marketing cloud resides with what company has the largest balance sheet and the greatest appetite to acquire. The cloud that will eventually change the industry will be the one that invests in software to better connect the industry rather than solely focusing on acquiring point solutions. How many of us had heard of AppNexus, BlueKai, Centro, Marketo or Admob four years ago? And remember when Microsoft purchased aQuantive for $6B? Is aQuantive still best-of-bread? Ad tech is a rapidly changing industry where billions of venture dollars are invested into new start-ups every year. Therefore, acquiring point solutions with the long-term vision of a marketing cloud that owns the “best-of-bread” solutions is like playing roulette and putting all of your chips on a few numbers.
Brands and agencies need open-source software that is net-neutral and vendor agnostic; think of it as the Switzerland of marketing tech. One that provides the flexibility to connect any point solution whether they are best-of-bread today or tomorrow. One that adapts to the fluctuating needs of a brand and the evolving culture of the industry. Gartner’s Laura McLellan predicted that in five years the CMO will spend more on technology than the CIO. This is because technology is the future of marketing and the software revolution is already happening. The driving force behind this revolution is the fragmentation of adtech and how it results in wasted media spend through delayed performance reporting and redundant workflows.
CMOs will have a single dashboard to assess how every media buy influences the other. They’ll be able to understand in real-time what area of their marketing spend is performing the best, down the granular level of channel, publisher and piece of creative. They’ll be able to view audience insights regarding the people they’re reaching and compare those insights to a digital baseline to gauge their media partners’ performance. The marketing software revolution is already underway and it’s going to change the industry in a bigger way than anything that we’ve seen before.