ZenithOptimedia

Why madtech provides an opportunity to tackle the industry’s biggest problems

For decades, advertisers and marketers have worked alongside each other, no doubt with a few clashed egos, but predominantly with a mutual understanding of the need to work together.

Both practices have been just that, very different practices that have existed in siloes. Advertisers have been focused on the creative; driving emotional connections with a brand or product. Creating buzz using a balance of secret-sauce creative and audience targeting. Whereas marketing has always been more closely aligned with sales and is often overlooked when it comes to creativity.

But these siloes are slowly eroding. In 2016, 34% of ad spend went on mobile and desktop advertising, and this is expected to grow to 41.8% by 2019, according to ZenithOptimedia. Data-driven digital advertising relies on and benefits from robust marketing databases and precision targeting, in a way that offline advertising isn’t able to. This shift and reliance in tech is one of the catalysts that is blurring the lines between marketing and advertising.

Forrester believes that the convergence of adtech and martech is inevitable. Customers expect seamless experiences across platforms and devices; brands demand transparency from their marketing and advertising investments and the media giants are monopolising consumers’ time spent online. According to Forrester, the convergence of these three areas will create improved, contextual, personalised customer experiences and the marketers that act on this will thrive in the new customer first world.

To balance these three determining factors, marketing and advertising teams need to work together to gain a full view of the customer, from mobile, to social, desktop, in-store and their journey and behaviours in-between. This brave new converged world has a name: madtech. There has been an increase in the number of industry figures using this term (Forrester and Ad:Tech London are two of the most prolific voices), but it’s still relatively unknown.

For madtech to move out of the shadows and into the limelight, we need to address the elephant in the room. The industry has a trust problem. At Ad:Tech London last month, during the Media Agency CEO debate, it was persuasively claimed that the amount lost to ad fraud each year is similar to the amount lost to illegal drugs trafficking.  Yes, that’s right, ad fraud is worth almost as much money as the illegal drugs industry. Is it any wonder that trust in the industry is at a low?

A recent study by QueryClick found that over 40% of advertisers have lost trust in programmatic advertising because of fraud. In a rallying speech made by Proctor & Gamble’s global chief brand officer, Marc Pritchard echoed this point: Pritchard described the media supply chain as “murky at best and fraudulent at worst,” calling for the industry to build transparency into every part of the supply chain. At the time, this remark reverberated across the industry, and it is still cited regularly 11 months on.

This is where madtech comes in. Technological innovations such as blockchain and AI can tackle these problems head-on. MetaX, NYIAX, and MadHive are three examples of companies using blockchain to combat ad fraud. MetaX, for instance, uses blockchain to provide a detailed audit trail for all transactions. The result is a scalable solution for tracking and verifying all advertising impressions, providing media buyers with an entirely clear view of the supply chain.

Rebuilding reputation and trust require more than just tech innovation. The industry, including technology partners, agencies and brands, need to think carefully about how they communicate their work. We need to start from the inside and work outwards to build trust amongst peers and partners, to regain the consumers and budget holder’s confidence.

The IAB has made in-roads to try and encourage organisations to take this approach. It’s “Gold Standard” pledge asks for members to implement a series of best practice initiatives to raise the standards for digital advertising.  This includes applying its ads.txt initiative on all sites selling digital advertising; this prevents fraudsters from selling inventory from a trusted source. However, the success of this hinges on whether ads.txt is widely adopted. The transparency built into ads.txt means that marketers can figure out what others are paying for the same inventory. The question remains on whether that is level of openness that publishers are comfortable with.

The Introduction of the GDPR next year will also help. The principles behind the regulation are to put the customer first, repositioning one-to-one marketing as an exchange of values between a business and its customer. This shift in power, along with the threat of hefty fines from the ICO, presents an opportunity for organisations to discuss transparency with the c-suite. How companies manage, store and share customer data should be front of mind for senior executives, which means that focusing on shifting corporate values towards a more open and transparent relationship with customers makes sense.

I believe the companies that will gain favour with the c-suite and consumers will be the ones that go further than the regulation dictates, asking themselves whether something is the right thing to do, not just whether or not it can be done.

The successful companies next year will be those that rise to meet these challenges, use them as an opportunity to address some of the industry’s most significant reputational issues and embrace what madtech can provide to help restore trust in the industry.