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Let’s Get Practical With the Convergence of Marketing and Ad Tech

  |  May 5, 2014   |  Comments   |  

There's a lot of hype surrounding Oracle's acquisition of BlueKai. However, here are a few immediate implications to marketers.

Ever since Oracle announced the acquisition of BlueKai a few months back, there’s been nonstop hype on the convergence of marketing technology and ad tech. Phrases like "360-degree view of the consumer" and "end-to-end coverage across the entire funnel" are thrown around liberally by industry experts and the like. But what are the immediate implications to marketers? Should we all run out to purchase the Eloqua suite and watch it perform wonders? Or should we twiddle our thumbs while the hype evolves into the same proportion as "big data"? (And we all know how "big data" turned out for marketers)

As a practical marketer, I suggest we do two things to evaluate all new tactics and technologies:

1. Understand the core concepts behind the tactic/technology.

2. Pilot the new marketing tactic and benchmark results with existing tactics.

Only then can we push its adoption for our brand and move beyond buzzwords or market hype.

Marketing Tech and Ad Tech

In order to understand the entire picture, let’s first get into some definitions. When the industry mentions marketing tech, it’s essentially referring to email marketing vendors like Eloqua, Unica, and Aprimo, etc. Most of these vendors have already branded themselves as marketing automation solutions. But the core focus is to target consumers that are at the bottom of the funnel using one-to-one communication channels like email. Hence it’s used more in cross-sell/upsell campaigns rather than top of the funnel acquisition programs. The data within these platforms include detailed PII and transactional information, and various consumers segments that can be built using models like RFM (Recency, Frequency, Monetary).

On the other hand, when the term ad tech is mentioned, we instantly picture the messy Lumascape featuring a plethora of interdependent companies. However, the key players are your demand-side platforms (DSP) and data-management platforms (DMP). The DSPs coordinate the purchase of digital media inventory, while the DMPs serve as the brain telling which impression the DSP must buy. The core focus is the exact opposite of marketing tech, because DSPs are used to prospect consumers that are at the top of the funnel. The DMP typically contains anonymous online behavioral data collected through cookies.

The Marketing Benefits of Convergence

Now that we understand the two tactics, let’s examine what the hype is all about. Like "big data," there are many promised benefits between the convergence of the two worlds. Some of the top selling points are the following:

1. With both PII and anonymous behavioral data, marketers can piece together the consumer journey across offline and online to reach "360-degree view of the consumer."

2. Marketers can finally centralize all communications through a single technology stack as opposed to many different point solutions.

3. Marketers can identify and reach every single consumer across the entire funnel using data gathered from an integrated solution.

So What Does a Convergence Look Like?

As I listened to these benefits, I can’t help but ask myself: "What in the world does the convergence actually look like for a marketing campaign?" Here are a couple of scenarios that I envisioned:

Financial Services Brand

1. An existing customer browses through the Web and clicks through a banner on a new credit card offer.

2. She lands on the campaign page, looks around the content, but did NOT sign up.

3. Within hours, she receives an email promotion to sign up immediately for extra points.

Telecommunications Brand

1. A customer contacts the call center to inquire about a new service plan.

2. She is satisfied with the new plan and proceeds to activate it over the phone with the sales representative.

3. The next day, as the consumer is browsing the Web, she is retargeted with banner ads on additional service items that she can tag on to the new service plan.

In order for the aforementioned scenarios to stand, data integration between the marketing tech database and ad tech DMP would need to happen. However, this is a complex process requiring a single primary key to connect the PII and anonymous cookies. Hence with Oracle acquiring BlueKai, they are taking the first stab to connect the two worlds. However, another possible route is to simply link up the user ID and cookie ID the moment a consumer logs into their account on the brand site. This allows consumer site behavior to be linked to PII and transaction data, but still cannot link consumer browsing behavior on the rest of the Web.

Convergence = Data Integration

As you can see, the core concept behind the convergence of the two worlds is actually data integration. Whether we decide to go with the Eloqua suite or do integration ourselves, we can only test the effectiveness of this concept by applying the new datasets on our existing email and DSP campaigns. Specifically, we can follow the following test plan:

DSP Campaign

  • Plan a retargeting campaign purely based on offline behavior datasets such as call center inquiry or new offline transaction.
  • Plan concurrent retargeting campaigns based on traditional behavioral datasets such as website visits or lead form abandonment.
  • Measure the effectiveness of the new dataset by comparing campaign cost per acquisitions (CPA).

Email Campaign

  • Plan an email campaign based on digital browsing datasets such as banner ad interactions or website visits.
  • Plan concurrent email campaigns based on traditional transactional datasets such as purchase frequency and recency.
  • Measure the effectiveness of the new dataset by comparing campaign CPAs.

If the campaign with the new datasets indeed performed better than traditional datasets, then I’d say there’s value in the convergence. If not, why do we spend all that work to integrate the datasets? I think marketers must be extremely practical in evaluating new technologies. For everything we do, we must have a clear return of investment (ROI). And if the convergence of the two worlds don’t perform, then why bother at all?

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Charlie Wang

Currently the digital partner for Mindshare, looking after the digital and search team in Beijing. Charlie is an experienced digital marketing professional with strong IT consulting background and a passion in data-driven marketing. He has more than seven years of digital marketing and consulting experience across U.S., Hong Kong, and China. His areas of expertise focus on direct response, lead generation, e-commerce, CRM, and programmatic media. An active advocate of data-driven marketing in the China market with various speaking engagements and publications on digital analytics and programmatic media. His client portfolio spans across IT, B2B, and FMCG.

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