• Advertising

MarTech vs. AdTech: Should We Prefer One Over the Other?

Konstantin Mirin
8 May 2020
8 Min Read
MarTech vs AdTech cover image

While marketers choose to differentiate the terminology, and each technique applies various technology tools, it’s the immense value in AdTech and MarTech approaches that grabs our attention. Let’s find out how AdTech and MarTech comes together to help marketing specialists increase market share and open up ample opportunities.

To overlap but not be used interchangeably, is the first rule when considering the relationship between AdTech and MarTech. However, each has an individual significance that cannot be underestimated. These software programs and tools not only assist marketers and advertisers but can also take on parts of their job, which often consists of the most tedious, complicated or time-consuming tasks. For instance, Gartner’s latest Hype Cycle for Digital Marketing and Advertising reflects how advertisers and marketers are adopting analytics tech for their activities. Moreover, thanks to automation and a programmatic approach, AdTech and MarTech software can now run, schedule, post, advertise, optimize, research or even write in place of marketing or advertising specialists.

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    As with any emerging field, there’s no set way to define these buzzwords. However, we’ll attempt to sort things out by looking at the AdTech definition and the MarTech definition separately.

    Advertising technology – or AdTech – unites the tools and software used in digital advertising. The goal is to deliver better ads to more audiences and to provide marketers with a technologically advanced ability to analyze digital efforts.

    Marketing technology – or MarTech sounds a bit more voluminous and covers tactics, techniques and tools that are used to follow the marketing strategy effectively. MarTech encompasses innovation-enabled efforts to manage the digital content creation, user workflows and customer data. 

    Similarities and differences between Martech and  AdTech

    Understanding each term is always important but doesn’t clearly express the difference between AdTech and MarTech. Drawing analogies can help, so let’s look at it this way: MarTech is like fishing with a pole and AdTech is more like fishing with a net. MarTech strives to establish relationships with leads and clients through personalization techniques at different stages of marketing campaigns. AdTech campaigns should first generate traffic, then sort it out after. Since we’ve already touched on the goals and audience of both techniques, we will use these categories to further discuss the similarities and distinctions of MarTech vs. AdTech.

    Campaign goals and target audience

    AdTech

    The goal is to catch a large audience into a technological net, which is usually unknown to brand owners or marketing specialists. Advertisers, in this case, apply technology to invoke a specific behavior to get the expected KPIs. Since the target audience is unknown, only specifying demographic categories like age or gender, AdTech campaigns are based on third-party data like search queries, time of a session, consumer’s gear, etc.

    MarTech

    Marketing strategy, fortified by advanced tech developments, is aimed at building customer relationships with the brand. While AdTech is praised for prospecting the unknown and brand building, you need to act quite contrary in customer relations – use MarTech to target people you already know. Technological efforts are focused on a specific category of people who have already demonstrated interest in the product or service. Third-party data won’t work in this case. Marketers should go for a personalized approach based on data like location, email address,  phone number, history of purchases, etc. 

    Approach and channels

    MarTech

    Under the umbrella of MarTech, you’ll find the following technologies and channels:

    • Marketing automation tools and platforms
    • SEO platforms and tools
    • Email marketing software
    • Social media management software
    • Customer data platforms
    • Content marketing platforms
    • Digital analytics tools

    AdTech

    Advertising technologies tap more into paid media:

    • Demand-Side Platform (DSP)
    • SEM Platforms / Social Ads Platforms
    • Supply-Side Platform (SSP)
    • Ad Exchange
    • Ad Networks and Servers

    Revenue-generation approach

    AdTech

    In the advertising business, the payment model is built in such a way that every party involved gets their share. Advertisers, publishers and ad platforms divide fees for AdTech activities. AdTech solutions usually charge a fixed price or a commission in addition to the CPM, with some also charging a monthly fee. The widely preferred billing models are as follows:

    • CPM – cost per mile model is used when the advertiser agrees to pay a publisher a certain price for 1,000 impressions of an ad in front of a user. For this reason, it’s also called cost per thousand. This billing typically applies to display ads, including banners, native advertising and others.
    • CPA – cost per action billing method applies when a user starts a direct interaction with ad content. For instance, a publisher runs the ad, a user completes a conversion, say, by signing-up or purchasing something, and an advertiser pays the publisher only for that user who’s completed a specified transaction.
    • CPC – Under the cost per click payment model, an advertiser will pay the publisher for each user clicking on a banner ad or following the link placed in the ad. 
    • CPL – cost per lead is paid when ad content set by the publisher brings the advertiser a qualified sales lead. It means that a user has viewed an ad, clicked on it and taken the desired action – a sign-in, website or newspaper subscription, or anything else that was specified by the advertiser. 

    MarTech

    Payment for marketing technology usually implies a yearly or monthly fee. On top of that, tech companies offer their MarTech solutions based on SaaS revenue models, which are more or less predictable and well-known to modern businesses.

    Value the technology brings to the brands

    MarTech

    If the marketers had luck fishing, they would aim to establish loyal relationships with consumers. On the one hand, those relations are valued by the customers for their personal touch and, on the other hand, they are praised by the brands for the customer loyalty supported by revenue increase and precious references. At the same time, leading a charge in marketing requires more than generic and faceless digital channels. 

    AdTech

    What if your customer base lacks the information needed for personalized marketing campaigns? What about brands that don’t have the necessary resources to maintain savvy marketing teams or subscribe to fancy MarTech products? These scenarios prove that in the AdTech vs. Martech battle, advertising technologies have their specific significance and add value to the brands. AdTech is a well-proven approach to massive prospecting, building a client base, generating traffic and building brands. 

    Summarizing facts about AdTech and MarTech

    In this article, through scrutiny and analysis, we’ve formed at least two conclusions. First, AdTech and MarTech differ mainly at the conceptual level. They play different roles within marketing and sales domains, the same as advertising and marketing differ in their goals and methods. The second conclusion, in contrast, proves treating MarTech vs. AdTech as individuals is an irrational approach. Both are two sides of the same coin and are needed to make the most effective team. So, the focus is not to split the initiatives using advertising and marketing technologies, but rather joint efforts to help brands better lead the charge. Good luck and march on!

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