The 21st-century marketing technology world might seem a little complex for any newbie, given the numerous emerging terminologies you’d come across and must get acquainted with. Take, for instance, terms like AdTech and MarTech, which are often used interchangeably. At some point, you might wonder if they mean the same thing.
Let’s simplify this: MarTech and AdTech are pretty different but very similar — just the same way marketing and advertising are. So it’s crucial to note the key differences between both terms. This knowledge will help you make informed decisions for your marketing campaigns and ensure you arrive at the best platforms for your advertising or marketing efforts.
The takeaways from this blog post include,
- The meaning of AdTech and MarTech
- Their key differences
- The meaning and origin of MadTech
What Is MarTech?
MarTech is a coinage involving two words: marketing and technology. It simply refers to using technology solutions to implement your digital marketing strategy.
In recent times, MarTech solutions have been pivotal for most in-house marketing teams that crave success. This is especially when it comes to creating and executing winning marketing campaigns.
According to Statista, the MarTech industry grew by over 20% in just 12 months (between 2018 and 2019). And by 2021, over 70% of businesses in the United States and Canada increased their marketing budget by not less than 6%.
Given the statistics above, you might wonder why exactly MarTech has become so important. Well, marketers today largely depend on the MarTech stack to streamline and scale their marketing activities. In other words, these tools are more like life support for companies when planning and implementing their digital marketing campaigns. They are also crucial in monitoring, recording, and reporting marketing results.
Some good examples of MarTech tools include CRM Software like HubSpot and digital analytics tools like Google Analytics.
What Is AdTech?
AdTech is a broad term describing the software and tools advertisers use to reach their target audience and deliver, monitor, and measure digital advertising campaigns.
Similar to MarTech, AdTech is a coinage representing a shortened way of saying “advertising technology.” Considering the highly advanced digital marketplace we operate today, the importance of AdTech to advertising agencies cannot be overstated.
A report states that digital advertising spending worldwide as of 2020 stood at 378.16 billion USD, a decent increase from the 335.6 billion USD recorded in 2019, despite the economic havoc caused by the covid-19 pandemic. But that’s not all. Because it is projected that by 2024, the global spending on AdTech would ultimately double from the 2019 figure, amounting to 645.8 billion USD.
So, why spend this big on AdTech? What makes it so important for advertisers? The answer is quite simple! With the increasing scope and size of the digital marketplace, running online advertising campaigns has become more complex than ever. That’s why most tech companies maximize AdTech tools like Google AdWords, ads forecasting software, data management platforms, and Supply Side Platforms (SSPs) — that let publishers sell ad inventory — to streamline the whole process of tech advertising.
Difference between MarTech And AdTech
If you find it difficult to differentiate between AdTech and MarTech, you are not alone, as both terms are often misconstrued.
In the real sense, AdTech is more like a subset of MarTech, just as advertising comes under the marketing umbrella.
On that note, the main difference between AdTech and MarTech is that while MarTech involves all the techniques and technology marketing teams use to optimize their marketing campaign, AdTech refers to the technology through which the said team gets those campaigns to their targeted audiences in an online marketplace.
Below are other critical areas of MarTech-AdTech differences:
The difference between AdTech and MarTech is vivid in terms of their roles.
AdTech typically involves vital data and metrics designed to help advertisers and ad agencies create, measure, manage, and run advertising campaigns across different apps, websites, or social media channels.
On the other hand, when you talk about the role of MarTech, you talk about those technologies or tools that allow marketers to create, run, and manage online marketing campaigns. Examples are email marketing, social media management, A/B testing, data-driven personalization, website analytics, user-feedback surveys, and so on.
When it comes to billing, the general rule of thumb is that MarTech bills its clients based on a subscription model, while AdTech mainly focuses on commission-based billing.
A good example of the MarTech billing approach is the SaaS (Software as a Service) which allows subscribers to renew their payment after a given period. This is fundamentally different from AdTech providers that bill their clients based on the amount they (clients) spend on purchased ads.
For instance, if, in MarTech, you are paying a flat, renewable monthly-basis subscription fee of, let’s say, 1,500 USD, in AdTech, you’ll have to pay a monthly minimum commission-based fee.
In other words, if your monthly ad spend in an AdTech model is 10,000 USD, and the commission is 10%, but the required minimum commission fee is 1500 USD, you won’t be paying just 1,000 USD as your 10% commission, but 1,500 USD.
Another aspect that AdTech significantly differs from MarTech is in the area of targeting.
This is because while MarTech identifies, targets, and nurtures a particular audience or specific group of people who have shown to be relatively interested in their services, AdTech focuses on a broader range of audiences (primarily unknown prospects) based on certain targeting parameters like location, behavior, demographics, browser history, etc.
That explains why AdTech largely depends on third-party data, while MarTech mainly deals with personally identifiable information (first-party data).
MarTech has a different approach from AdTech, especially in the aspect of the media and channels they focus on.
While MarTech inclines more on nurturing prospects through free channels like SEO, social media, email, and so on, AdTech is more about using paid media to buy inventory, occupy the right spot, and display ads to audiences.
Another critical distinction between MarTech and AdTech is their platforms which are unique to each field. However, a few of these platforms can also co-exist in both industries.
5.1. ADTECH-SPECIFIC Platforms
1. SUPPLY-SIDE Platforms
The supply-side platform (SSP) is one of those AdTech solutions that enable ad publishers to sell their inventory on multiple ad exchanges in a secure, automated, and efficient manner.
Although publishers don’t necessarily have to depend on SSP to sell their ad inventory on different ad exchanges, SSP is usually integrated with technologies that provide them with ample benefits, allowing them to make maximum profits while gaining detailed insights into their audience.
2. Demand Side Platforms
On the other hand, a Demand Side Platform (DSP) enables media buyers or buyers of paid advertising inventory to manage multiple ad exchanges via a single user interface.
Demand-side platforms encourage real-time bidding, allowing advertisers to buy media on an impression basis.
3. Ad Exchange
An ad exchange is a dynamic digital platform that serves as a marketplace where advertisers and publishers buy and sell ad space via real-time auction, just like the stock exchange market.
4. Ad Server
Ad servers are web-based AdTech platforms that provide technologies with which advertisers decide which advertisements to display on websites for more revenue. An ad server also serves, collects, or reports data (like clicks, impressions, etc.) and monitors the progress of different ad campaigns.
5. SEM platforms
Search Engine Marketing platforms allow you to promote your website and boost its rankings on the search engine result pages through paid advertising.
6. Agency Trading Desk (ATD)
ATD employs one or more Demand Side Platforms (DSPs) to promote programmatic ad buys for their clients, thereby giving them (their clients) access to multiple DSPs.
5.2. MARTECH-SPECIFIC Platforms
1. Marketing Analytics Platforms (Website Analytics)
Marketing analytics platforms offer marketing professionals various applications to streamline their marketing processes through social media management, email management, and marketing automation.
These tools also give marketers more insights into customer data that would ultimately help them generate leads and enhance sales.
2. Social Media Management Platform
These social tools allow marketers to manage multiple social accounts on various platforms and devices.
With social management platforms, you don’t only schedule your social media posts but also track the reach of such posts to your audience.
The tool is closely related to social media listening tools. For instance, while Hootsuite is an excellent example of social management tools, Hootsuite Insights is a great tool for social listening.
4. SEO And Content Optimization Tools
While SEM tools typically fall under AdTech, SEO and content optimization tools are mostly MarTech.
Customer Relationship Management is another related platform ideal for managing both existing customer base, new customers, and potential customers.
5. Personalization Platform
Personalization or customization when it comes to MarTech platforms is all about tailoring a product or service to the preference of a specific customer or a group of customers.
6. Marketing Automation Platforms
Most of the marketing technologies discussed above come under marketing automation platforms which streamline and simplify marketing efforts.
Click here for more insights into the top MarTech Platforms every marketing team should have in their stack.
MarTech vs. AdTech Comparison Table
The picture below presents a summarized comparison of AdTech and MarTech:
MadTech (Convergence of MarTech And AdTech)
Having established the key differences between AdTech and MarTech, the question is, what is the way forward?
In truth, creating a robust digital strategy that would take your business to the next level is about adopting a comprehensive approach. An approach that works as a combination of both marketing (MarTech) and advertising (AdTech) technologies.
That’s where the concept of MadTech comes in. And, of course, the importance of MadTech in the online marketplace can not be overemphasized because MadTech is arguably the most efficient way to drive audience engagement by conveying the MOST RELEVANT messages via the favorite channels of potential customers at the right moment — that moment when the said customers are active and interested in finding out what you’ve got to offer.
Understanding the differences between AdTech and MarTech is crucial because both concepts practically cut across everything you do to grow your online business. Having analyzed their differences in terms of roles, targets, billings, and platforms, it’s now easier to determine the direction of your advertising or marketing campaign.