Martech’s Magicians: Microns, Micronbox and µniverse (Part 1)

Adtech to Martech

Martech (short for “marketing technology”) as a recognised software vertical is just over 7 years old. The first Martech conference was held in August 2014 in Boston. (I attended it.) By contrast, adtech is more than two decades old. These are the two pillars of modern marketing: adtech is about customer acquisition, while martech is about customer retention, growth and cross-sell. Martech begins where adtech stops; martech focuses on today’s customers, while adtech brings in tomorrow’s customers.

Gartner defines martech as “a set of software solutions used by marketing leaders to support mission-critical business objectives and drive innovation within their organizations. Martech solutions focus on content and customer experience, advertising, direct marketing, marketing management and marketing data and analytics.”

Marketing Evolution: “MarTech may sometimes be confused with Adtech. The difference between these programs is similar to the difference between marketing and advertising. While martech refers to technology that helps to create, communicate, and deliver offerings, adtech is strictly used to influence buyer behavior by promoting offerings. For example, Customer Relationship Management (CRM) software is martech, while social ad platforms are adtech.”

My focus here is on B2C Martech. It is about using customer data to build deep digital relationships. While CRM systems have been around for a long time, martech is about doing much more – aggregating customer behaviour on websites and apps, orchestrating journeys, creating segments, targeting communications across multiple channels (emails, SMS, push notifications), personalising offers, crafting next best actions, and engineering experience on the brand’s properties. Marketing departments, growth hackers and product managers can use martech tools towards the common goal of maximising customer lifetime value (CLV). This in turn means focusing on retention, reactivation (of dormant customers), and referrals. Martech is at the heart of driving revenues for B2C companies, because not all customers will return to a brand’s properties of their volition for their next purchases. They need to be brought back – that is the job of martech.

And yet, 80-90% of budgets are spent on customer acquisition (adtech). This is what I call the “doom loop” of spending: in the race to acquire new customers, brands are overspending and wasting precious resources. Besides facing rising ad costs and acquiring low value customers, brands are also now facing the prospect of disruption in the form of the coming death of third-party cookies and privacy restraints being introduced by the adtech platforms. In addition, my estimate is that a third of adtech spends are on reacquisition of churned customers. This continuous and spiralling spend is unsustainable and will end once easy investor money dries up. Martech will come to the fore once there is a demand for profitable growth rather than growth at all costs.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.