GroupM economist: Ignore martech and adtech at your peril
- 19 September, 2019 07:20
Agency and industry players who haven’t yet grasped how important marketing and advertising software systems are in the industry’s long-term future risk falling into the same trap their predecessors did when they failed to recognise digital’s significance.
That’s the view of GroupM global president of business intelligence and economist in residence, Brian Wieser, who has been on Australian shores this week sharing his views on health and wellbeing of the marketing, media and advertising industry.
According to his findings, martech and adtech software currently represents about US$100 billion of the total $1.5-$2 trillion marketing and advertising industry globally, leaving significant room for growth. Bigger contributors include advertising (about $700 billion), services ($150 billion) and ‘other marketing’ such as data, partner support, events, activations and sponsorships ($700 billion).
“Not understanding marketing tech as a media CEO or client, is equivalent to not understanding digital 20 years ago. You’re fine that year, or a few years out… but by the time you’re 15 years out, you’re in trouble,” Wieser told attendees at a GroupM event this week. “If you take this as the software layer of the industry, and if you believe in the premise software is eating up all industries, or that everything that can have technology applied to it will… we’re only at $100bn. There’s a lot of room to grow.
“It’s a solid teens growth space and it’s going to keep growing a rapid pace for a long time. That’s because software is still so small and there’s so still much opportunity for marketing technology to be applied to our broader industry.”
For one, all the sources of data on customers and prospects and finding points of consumer contact where you can connect should be tying more and more into media, Wieser said.
Balancing this view at the AANA Reset event the day before, Wieser disagreed with Gartner figures that martech is now 29 per cent of a marketer’s total budget, suggesting it was more likely to be under 20 per cent. Yet at the same time, he argued holding companies and agencies haven’t invest enough as a sector in martech and as a result, lost some ground to consulting giants who have.
“A few consulting groups – Accenture, Deloitte – are being aggressive in their efforts to come into this space. I’d say WPP more than most agencies has invested here, but we are seeing agencies have some presence in IT services,” Wieser said. “It’s not a one-year game, it’s multi-year effort.”
To counterbalance this, Wieser agreed agency and industry maturity around martech and adtech can vary by region or geography. Yet he also saw a lack of integration of the two as well.
“I don’t get sense there’s urgency to bring martech and media together more tightly,” he added. “Which is OK – if you’re the client who decides to find ways to take advantage of it now, you win. Good for those who do.”
As for rising investments into data across marketing teams and agencies, Wieser described it ultimately as an important operational element helping the industry “make less bad choices”.
“Data helps you find the least bad alternative,” Wieser said. “Think about TV planning: 15 years ago, TV schedules were picked by buyers and we had MRI self-reported data. Now with set-top boxes, we can match data against other data sets and identify preferred programs to ask sellers to place ads against. You can automate more and more.
“It’s the least bad alternative concept. Data just helps us get there. For all data being used in advertising let alone the economy, it doesn’t cause change in overall trajectory of growth. It’s just an operational element - an important one - that helps us make less bad choices.”
Wieser also commented on wider business investments and in particular, short-term versus long-term investor community focus. He noted brands with a consistency of view are more likely to gain investors willing to support them for the long haul.
In his own in-depth research into Amazon’s financial reports, for example, Wieser said consistency of view and brand ambition had always been there.
“Amazon has stuck to this view, which most other companies do not do. There might be short-term consequences, but over time you build a constituency of shareholders who buy into the view,” Wieser said. “As long as you’re delivering against it over whatever timeframe you promised to, investors will be wilfully optimistic.”
This need for consistency also came through Wieser’s response to the question of whether marketing has become too overcomplicated.
“Sometimes things need to be complicated and there’s no way around it. The bigger point is companies are often inconsistent when they need to be consistent,” he said. “If you are consistent, you will crush the competition.
“Too many companies respond to the vagaries of the market or whatever they just heard, or where they think they need to be based on what people think they should be doing. They don’t stick to their true vision of where they need to go.”
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