The New Face of Ad Tech Innovation

Although digital media and advertising look very different today than in 2007 when the first iPhone landed, there are some immutable constants which, over time, have come to form our ad tech ecosystem. Reliable user identification, for instance, has always been crucial for effective ad delivery, targeting and frequency control. Similarly, the importance of excellent creative has not waned over time, nor has the usefulness of data nor the significance of productivity gains through automation.

What has changed is how we do those things. The third-party cookie used to be a reliable indicator of user identity, but in our increasingly cookie-less world, that is less often the case, and so we developed probabilistic and deterministic means of cross-device attribution that don’t specifically rely on cookies. Likewise, great creative these days more often takes the form of native, custom or influencer content than a 300x250 ad adjacency in the right rail.

Within the ad tech world, such changes can have a destabilizing effect, commoditizing entire areas of formerly high growth and (seeming) differentiation: programmatic DSPs, mobile ad networks, 3rd-party retargeting platforms — all have felt the squeeze. And these seismic shifts are sometimes hard to see coming. For example, it wasn’t obvious in 2007 that Apple’s new smartphone operating system, iOS, would single-handedly: i) create an entirely new mode of user engagement; ii) create a new market of mobile apps; iii) kill the usefulness of the 3rd-party cookie; and iv) sound the death-knell of Flash.

Thankfully we live in a culture where innovation itself is an immutable constant (not to mention the funding and marketing infrastructure to support it), and so innovation takes new forms.

One of the most exciting new forms is happening within “marketing automation and personalization,” a category whose dowdy title belies great dynamism. For the technology being developed in this field is helping to collapse old distinctions between advertising, marketing, CRM and commerce. The evolution looks something like this:

1) The smartphone becomes the most rapidly adopted device in history and creates a new mode of engagement that is inherently social, personal, and real-time

2) New experiences created on top of the device OS privilege authenticity, relevance and semi-private communications. Brands are not necessarily invited.

3) Somewhat paradoxically, consumers come to expect real-time responsiveness from brands, and also happily spend real money in environments optimized for convenience, speed, and enjoyability.

The pressure this puts on brands is enormous. Not only must they create marketing content that is so inherently interesting it doesn’t feel like marketing (no mean feat), they have to be skilled at customer communications that occur with such velocity and frequency that email looks like yesteryear’s Pony Express by comparison.

And so new technology companies are stepping in to assist brands navigate this complex ecosystem. One batch of companies is focused on the challenge of automating customer interactions and transactions inside social messaging spaces, often using human-assisted AI (Facebook’s “M” and startup are two examples). Another group uses machine learning to help businesses send customized emails and app notifications to customers, making personalization a matter of iterative optimization, not manual labor (examples include Boomtrain and Sailthru).

Whether you call these companies “marketing tech” or “ad tech” doesn’t matter. What matters is that, in our time of accelerating paradigm shifts and collapsing distinctions between advertising, marketing, CRM and commerce, technical innovation in our space is alive and well.

(originally published in MediaPost)

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