Martech Agency – 1
There is only one way out of the spiralling costs of ad spending. It is obvious, and yet few marketers practice it because it is also hard work. The solution is to focus on existing customers and drive retention, convert reacquisition spends into reactivation at a fraction of the cost, and ensure referrals to bring down cost of new acquisitions. My estimate is that a third of the adtech budgets is being wasted – if these are allocated towards the 3 Rs of martech (retention, reactivation, referrals), brands will create a path to profitable growth. The alternative is a continuing dependence on investor capital poured into a leaky adtech bucket.
This is going to be the biggest budgetary shift in marketing in the years to come: a third of adtech budgets can create a $100 billion opportunity for martech spending. But this will not happen without the rise of the martech agency – just as the growth in adtech spending would have happened without the assistance provided by the digital agencies.
Adtech required external intervention because it was about dealing with prospects – future customers. These customers were elsewhere and needed to be attracted to the brand. Hence, the spending needed to be where these customers were (everywhere except the brand’s own properties) for which the combination of the adtech platforms (Google and Facebook) and agencies were needed.
Martech is different. It is about the brand’s own customers. Brands have enough information about them to create a hotline via push messaging in the form of email, SMS and notifications to attract them to their own app and website. In that sense, it is an “internal” problem – the levers of control lie within the marketing department. Over the past few years, martech tools have emerged to help with exactly this – campaign management, customer segmentation, journey orchestration, marketing analytics, and much more. The problem for marketers has been two-fold: internal marketing teams do not have all the talent and skills to make the best use of these martech platforms with the result that they use only a fraction of the capabilities, and top management is still mesmerised with new acquisition numbers leading to 90% of budgets getting spent on adtech, and existing customers are largely left orphaned.
That is the opening and opportunity for a martech agency. Such an agency would help the marketing department the way the adtech agencies do: make it easy to outsource, work on specific KPIs, and link payments to performance. Just as marketers learnt to work with adtech agencies and rarely do campaigns internally, they will need to build relationships with martech agencies. CEOs and Boards of companies will need to bless these transitions: from adtech to martech, and from internal teams to an outsourced martech agency. The businesses which manage this shift successfully are the ones which will lay the foundation for exponential forever profitable growth.
