When Our Powers Combine: The Impending Convergence of Advertising and Marketing

WhenOurPowersCombine:
TheImpendingConvergenceofAdvertisingandMarketing
andWhattoDoaboutIt

The seamlessly integrated marketing organization has been a
promise of talking heads and wish of marketing executives for
years. And it is ultimately armed with an integrated marketing
hub - a suite supplying data management, analytics,
decisioning and content delivery across all channels. While
the individual complexity of businesses and rapid innovation
of communication technology make the full vision an ever-
evolving process, advancements have already been made
with software providers consolidating marketing operations,
campaign management and digital messaging applications
into integrated portfolios. This has benefited marketing
campaign managers, planners and analysts, but a handful of
digital marketing functions still use separate, non-integrated
systems to accomplish their work. The digital advertising
department is one of these functions, but not for long.
Today’s customer-focused strategies result in an impending
convergence of marketing and advertising. AdExchanger’s
Joanna O’Connell put it this way: “When every CMO talks
about delivering ‘relevant, 1:1 experiences,’ she’s implicitly
expecting that the technology will show up to help her
do that.” 1
In other words, in order to consistently deliver
compelling content and offers to customers across their
experience with the brand, marketers and advertisers must
start to understand each other’s worlds — what they do, how
they do it and how data drives their decisions — because, in
O’Connell’s words, “this march toward integrated marketing
technology is inexorable.”
Why Advertising Matters to Data-
Driven Marketers
In 2002, Kenneth Cooper authored a book titled “The
Relational Enterprise: Moving Beyond CRM to Maximize All
Your Business Relationships.” In it, Cooper premised that the
360-degree view of the customer was at that time “one of the
most overhyped and least understood concepts in business.”
Fast forward a decade plus and we’re still talking about how
to best deliver an integrated customer experience across all
channels of interaction. The reality is that companies have
come a long way in integrating and using data in marketing.
Many enterprises have brought together parts of their point-
of-sale, customer contact, e-commerce and service data by
way of an enterprise data warehouse, customer database or
marketing service provider. But even as firms undertook these
projects, emergent customer technologies began to open up
new data sets and enable marketing interactions which look
much different than those that came before them. Suddenly,
web logs, tags, third-party cookie data and real-time geo-
location became important to marketers — and foreign to
data managers. At the same time, digital advertising started a
transformation of its own, eschewing the “newspaper model”
of selling static ad space and replacing it with audience buying,
real-time transactions and analytically-driven automation.
In other words, digital advertisers became data-driven. They
learned that segmentation and measurement could improve
results, and recast focus around customers and metrics.
Advertising vs. Marketing
— What’s the Difference?
Though similar in nature, for the purposes of
this paper “advertising” refers to paid content
placement — for instance, a radio commercial,
banner ad or pre-roll video ad. “Marketing”
refers to customer interactions in owned
channels — email, website content or direct mail
— as well as the broader function of managing
the overall promotional strategy. In some
organizations, these roles are alternately aligned
as “acquisition” versus “retention” or “CRM.”
2

Ten years after Cooper’s pronouncement, advertisers started
to look much like the direct marketers that preceded them,
and data-driven marketers were handed a new challenge to
expand their view into online and mobile experiences with
paid content delivery.
This advancement has the potential to increase the value of
customer data, improve marketing performance and optimize
marketing and advertising processes. The new imperative for
data-driven marketers is to manage insights and interactions
across all touchpoints — whether online or offline, owned or paid.
The Real-Time Revolution
What has changed to enable a customer-oriented,
data-driven approach to advertising? While many new
technologies have emerged in the space, the most
transformative is the advent and adoption of programmatic
buying and selling of ad space, also known as real-time
bidding. Instead of buying blocks of ad space as in traditional
media, advertisers can now make impression-by-impression
decisions on content placement at an individual customer
level. Growing from near zero in 2009, this type of media
transaction now represents roughly one-quarter of non-
search online spend 3
, and will continue to grow and find new
application. For instance, internet-connected television is a
ripe medium for the application of programmatic buying.
This has changed the game for data-driven marketers in that
the practice:
~~ Enables individual-level customer targeting of paid
content placement
~~ Generates volumes of behavioral data — browsing, ad
impressions, clicks, etc.
~~ Drives better results through big data and analytics
~~ Automates the advertising process — moving spend
from manual agency media buying to software and
associated services
Four Reasons to Integrate
Marketing and Advertising
While different organizations will surely find various and
innovative ways to bridge the divide between marketing
and advertising, four categories of use are most
prevalent in the market today:
1. Message Control – Inconsistent messaging to a
customer can cause uncertainty, confusion and loss
of future sales. By integrating outbound and inbound
campaigns with digital ad campaigns, marketers can
ensure they are delivering a consistently relevant
experience to the customer, regardless of the channel.
One example of this in action involves an electronics
—
What is digital advertising?
Digital advertising refers to any promotional
message delivered on an internet-connected
device. This includes well-known ad mediums
such as text search ads and desktop browser
display ads, as well as newer typeslike in-app mobile
ads and geo-pinned ads in augmented reality programs.
Global digital ad spend grew 13% to $117.6 billion in 2013,
representing 22.7% of all ad spending.2
3
A Comprehensive Approach to Interaction Management

retailer seeking to upsell major purchases with
accessories and add-ons. Through its loyalty program,
this retailer can already reach its customers with direct
mail and email. By incorporating online advertising into
its decisioning process, someone who just purchased a
TV receives an offer for speakers, not for another TV. 4
The key is using actual purchase data to reach individual
customers online, whether the purchase was made in-
store, on the web or on a mobile device, and extend the
concept to other data sources as well.
2. Accelerated Relevancy – For most brands, the
majority of website traffic at any point in time isn’t
known customers (logged-in) but rather anonymous
browsers. This is an issue for web personalization
initiatives that intend to create better experiences
for customers by dynamically changing web content
for each individual. Without a login, the brand can’t
connect the web visitor with content relating to
their historical relationship with the brand — for
instance, past purchases or declared preferences.
While that kind of relationship-driven data will
ultimately enable the most relevant customer
experience, brands can now fall back on anonymized
third-party and advertising-related data to tailor
the on-site experience prior to a login event. For
instance, an insurance company can decide whether
to surface auto or home insurance offers based on
an anonymous visitor’s browsing behavior on auto
review sites or real estate research sites. This is data
sourced from a third-party broker (i.e. Exelate) or by
analyzing where the brand serves its own ads to that
individual. This ultimately accelerates the process
of providing content relevancy, resulting in better
customer experiences, increased engagement and
improved brand loyalty, leading to higher revenues .
3. Discovery and Advanced Insights – An increasingly
important type of behavioral analysis involves
evaluating customer journeys across various
touchpoints leading to a target event such as a
purchase, account cancellation or enrollment. These
paths are analyzed for early indicators of attrition or
opportunities to improve conversion rates. What many
of these analyses omit, however, are ad impressions
that occur before the “first-click” — that is, before
the visitor actually arrives at the website. When
advertising, marketing and technical professionals
partner on these analytics, all parties can improve their
modeling and understanding of customer paths by
including both pre-click ad impressions across the web
and direct interactions with the brand.
4. Attribution and Spend Management – Many firms
are now investing in attribution to better understand
the performance of their marketing campaigns.
But too often, these implementations are limited to
digital or confined to evaluating a direct response.
Without evaluating the long-term effect of advertising
impressions, how can a marketer understand the
result of brand advertising? And without calculating
attribution metrics across all online and offline
channels, how can an executive accurately account
for their marketing spend and revenue generation?
By integrating all marketing and sales data and
connecting results back into advertising systems,
marketers can fully close the loop and optimize spend.
A telecommunications company saw
a tenfold lift in ad click-through rates
when targeting individual customers
following a direct mail campaign versus
a random segment.5
4

The Advertising Value Chain
Advertisers Move Digital Forward
Brands continue to shift advertising spend into digital
from print, radio and other mass marketing channels. In
total, digital advertising increased 17.8% in 2012, more than
three times the overall increase in media spend of 5.4%.6
As digital represents a larger line item in the marketing
budget, it warrants more scrutiny from C-level executives
and investment in optimization processes. It also provides
the scale needed for innovation and integration initiatives.
The Changing Role of Agencies
The traditional role of agencies as generalized media
buyers is on the cusp of change. Before programmatic
buying, the media agency of record held substantial
bargaining power on behalf of the various firms it
represented. In addition, agency relationships across
media publishers were difficult for a single firm to
replicate. However, today’s auction marketplaces for
digital media level the playing field for media buyers and
make agency expertise in data-driven, result-oriented
practices more important.
Brands are choosing agencies today for expert services
in strategic areas such as lead generation or interactive
development, as well as digital consulting and access
to exclusive ad inventory. While the agency is and will
continue to be the primary media buyer for brands, select
marketers have started in-sourcing some programmatic
media buying functions such as retargeting or general
brand awareness campaigns. The agency still plays a
key role in developing creative strategies, but the digital
revolution has put the brand firmly in control.
“As a business owner, we want to be in direct control of the marketing levers,
to adapt as quickly as possible to changing business requirements.”
Lee Engel, StubHub—
5
The new advertising value chain

THE 3 TECHNOLOGIES THAT MATTER
Three core technologies will be critical to marketers
moving forward:
1. Demand Side Platforms (DSP) - Digiday’s Jack
Marshall describes a Demand Side Platform as “a
piece of software used to purchase advertising in
an automated fashion. DSPs are most often used by
advertisers and agencies to help them buy display,
video, mobile and search ads.” 8
As it evolves, the
DSP will become the primary platform for advertising
placement decisions across all digital channels
including IPTV (digitally-served television) for real-
time bidded inventory as well as guaranteed (bulk)
media purchases with real-time fulfillment.
2. Data Management Platforms (DMP) - These
solutions play a similar role to that of marketing
data warehouses, but for anonymous, digital data
sourced from web tags, ad systems and third-party
data brokers. Increasingly, non-digital customer data
can be brought into a DMP as well, with limitations
including one-way anonymization and single
dimensionality (most DMP’s only support import
of attributes about a customer, not transactional
events). Digital marketers have gravitated to DMP’s
due to their relative ease of implementation, SaaS
delivery model and integrated toolsets. Technical
requirements such as browser-side ID linking are
also met by DMP’s. However, enterprises will soon
begin to grapple with the DMP’s lack of offline
integration and consider a single customer data
hub encompassing known and anonymous, online
and offline data rather than a separate customer
data warehouse and data management platform.
Under that scenario, today’s DMP’s do not cease to
exist, but rather become middleware for digital data
collection and consolidation, feeding that data into
the comprehensive customer data hub.
3. Marketing Performance Management (MPM) –
Marketing Performance Management (MPM) solutions
increasingly bring together elements of attribution,
marketing mix modeling, spend management and
predictive analytics to drive budget allocation
decisions across paid and owned channels. The
visibility into impressions of and interactions
with digital ad content makes digital advertising
particularly attractive to ROI-focused marketers, but
it is critical for brands to avoid the trap of measuring
digital ad effectiveness in yet another functional silo.
Rather, an independent measurement, forecasting,
and optimizing function (with expertise, process and
technology to support) drives marketing decisions
most effectively across the enterprise.
Avoiding the Exchange Conflict of Interest
Increasingly, publishers and exchanges such as Google
and Yahoo are providing not just access to ad inventory
itself, but also a set of software tools to execute media
buys. For example, Google’s Doubleclick Bid Manager is
a popular application for managing search and display
advertising campaigns including those on Doubleclick’s
auction-based exchange. However, many large enterprises
are recognizing the inherent conflict of interest in a single
entity — in this case, Google — representing both the
buying and selling parties, especially where its primary
revenue stream is derived from publisher partners. In other
words, marketers have become skeptical as to whether
a company in the business of selling more advertising
at higher prices can truly deliver efficiency gains for
advertisers with opposing objectives. This has caused
marketers to look elsewhere for their ad buying systems,
specifically to best-in-class independent vendors who
specialize in agnostic performance across all inventory
systems and all digital channels.
“Marketers will have to bring all of their marketing stack
technologies in-house and tie all their systems together
so they are speaking the same language. This means
that data on customers and prospects must be shared
seamlessly across marketing automation systems, CRM
systems, content-management systems, data-management
platforms and analytics tools.”
Russell Glass, CEO at Bizo—
6

Changing Times for Publishers
While some online publishers continue to resist customer-
driven, programmatic advertising sales10
, many others
are embracing the technology’s potential to improve
the customer experience, reduce the cost of sales and
optimize revenue yield. Publishers still struggle with the
balance between directly sold and programmatic ad
space since direct sales often carry higher prices. It will
take maturity of process and technology — including
sell-side platforms to manage minimum prices, inventory
quality and fraud prevention — to continue growth.
“Programmatic direct,” where the financial transaction is
made directly with the advertiser but ad space is fulfilled
programmatically, will contribute in this mix as well.
Despite the challenges, publishers continue to make more
inventory volume and types available programmatically
at a growth rate of 66% in 2013, reaching a level of $20
billion in total by 2017. 11
As they do so, marketers will
increasingly be able to integrate and automate their paid
content into their overall customer-centric strategies.
The Customer in Control
Customers continue to exercise their new-found influence
from access to information, availability to competition
and social voice. Higher expectations of brands result
in customer preference for relevancy in advertising,
contextualized to their interests. 12
The end-result is
more stress for marketers, 78% of whom feel pressure to
become more data-driven in response. 13
Achieving the Integration
Both technical and organizational challenges must be
met in order to successfully bridge the divide between
marketing and advertising. Organizationally, translation
of terminology and co-ordination of objectives is needed
among technologists, marketers, media managers and
their outside partners. Technologically, the “known” world
of the marketer (who deals with customers identified
by their name, phone, email or account number) and
the “anonymous” world of the digital advertiser (who
conversely deals with non-personal identifiers such
as a cookie ID or device ID) must communicate in a
privacy-compliant way. This anonymous-to-known
translation (and vice versa) is critical to implementing a
comprehensive customer engagement strategy.
When it comes to co-ordinating or measuring campaigns,
often the quickest way to bridge this gap is by partnering
with an onboarding service (such as LiveRamp or
Datalogix) that specializes in translating email or physical
addresses into anonymous identifiers and delivering them
to an advertising execution system. 14
While this is often
the most efficient first step, a more complete strategy
includes both third-party onboarding services as well as a
proprietary linkage among IDs (most commonly, cookies)
to sync between the brand’s identifiers and those of other
digital systems. 15
Once the link is established, data can
easily be passed back and forth, and both marketing and
advertising systems can benefit from the additional insight.
“When we in the digital advertising technology
ecosystem talk about [data management], what
we’re really talking about is collecting, normalizing,
segmenting and activating anonymous digital data —
think cookie data, ad server data — initially, and still
primarily, for the purposes of paid acquisition efforts
in display advertising.”
Joanna O’Connell—
7

“Brands recognize the importance
of their site- and user-level data.
They want to make sure the data is
used for their campaigns and never
for competitors or their agency’s
independent gain.”
Marc Grabowski, COO at Nanigans
Getting Started with Digital
Advertising Alignment
1. Start with the Tactics – Get Onboarded
Marketers can achieve an early win when they partner
with an onboarding provider (such as LiveRamp) to
extend their current campaigns into digital media.
While a more comprehensive approach to data-driven
marketing is ultimately needed, one that includes
both partner onboarding as well as a company’s own
linkage between anonymous and known customer
identities, initially leveraging existing campaign
management and segmentation investments along
with an onboarding service can quickly prove
effectiveness of integrated communications and
generate incremental return on marketing activity.
2. Own the Technology. Own the Data.
Enterprises are beginning to see their customer data
and supporting technology stack — including that
around digital advertising — as a competitive asset. As
such, they should recapture control of their advertising
data and the proprietary insights it generates back
from agencies. While agencies will continue to provide
strategic services, brands themselves should be
involved enough in the technology-buying process to
ensure that at the end of the day they own the data and
the insights it generates. This portability should apply to
both bringing those insights in-house as well as sharing
with other agencies working with the brand. A recent
CMO Club poll foreshadows this realization — while only
15% own their media buying technology today, 46%
plan to evaluate a direct relationship with technology
vendors in the future.16
Companies such as StubHub and
Kellogg have already made the jump.7
3. Do Attribution Once. Make it Independent.
Make it Actionable.
If the customer only makes one purchase, why do
companies attribute its revenue multiple times?
Attribution shouldn’t reside in a web analytics tool,
with a media agency, or with a direct mail house.
Instead, attribution should be an enterprise function
designed to produce a “single version of the truth”
as it relates to marketing performance across all
channels and campaigns. This elevates attribution
from a tactical activity to a strategic process that can
be used to optimize marketing budgets and forecast
against revenue goals.
4. Design Campaigns with All Channels in Mind
Customers don’t distinguish between channels, so
why should marketers? Pull together a cross-channel
group that designs campaigns holistically with the
customer and desired end-state in mind. Then,
disseminate that design across all teams. Better yet,
leverage a centralized customer interaction hub to
automate and orchestrate content delivery across
each outbound and real-time channel.
—
8
OMNI-CHANNEL CUSTOMER EXPERIENCE DESIGN

Glossary
~~ Ad Exchange: Provider of real-time auction marketplace
for digital ads. Examples include: Google DoubleClick,
Facebook Exchange (FBX) and Yahoo Exchange.
~~ Consumer: Someone who purchases goods or services.
In a marketing sense, the term “consumer” represents
both current customers as well as prospects and the
public at large.
~~ Data Management Platform: In digital marketing, a
database of advertising data, website data, and third-
party digital data. Usually includes reporting and
segmentation tools.
~~ Demand Side Platform: Software an advertiser or
agency uses to purchase digital advertising from an ad
exchange.
~~ Digital Advertising: Paid promotional messages on
Publisher properties; categories include display, video,
mobile, social and search.
~~ Marketing Performance Management: Software-
enabled process for evaluating and using marketing
results; typical components include attribution reports,
forecasting tools and marketing mix analysis.
~~ Omni-channel: Departing from its retail industry roots,
“Omni-channel Marketing” now refers to a holistic
approach to customer dialogue across paid and owned
channels. 18
~~ Publisher: Digital content owner; usually generates
revenue by selling ad space. Examples include CNN,
ESPN, Huffington Post and Yahoo.
~~ Real-Time Bidding: Process by which digital ad
impressions are purchased in an auction marketplace.
9

References
1. O’Connell, Joanna. Merge Ahead: Prepare for the
Convergence of Marketing and Ad Tech. AdExchanger.
[Online] December 2013, 2013. http://www.adexchanger.
com/marketers-note/merge-ahead-prepare-for-the-
convergence-of-marketing-and-ad-tech/.
2. eMarketer. Worldwide Ad Growth Buoyed by Digital,
Mobile Adoption. eMarketer. [Online] September 25,
2013. http://www.emarketer.com/Article/Worldwide-Ad-
Growth-Buoyed-by-Digital-Mobile-Adoption/1010244.
3. Marshall, Jack. How Big is Real-Time Bidding Really?
Digiday. [Online] November 27, 2013. http://digiday.com/
platforms/big-real-time-bidding-really/.
4. LiveRamp. Case Study - Retail. LiveRamp. [Online]
http://liveramp.com/case-study-retail/.
5. LiveRamp. Case Study: Telco. LiveRamp. [Online]
[Cited: Februrary 21, 2014.] http://liveramp.com/
case-study-telco/.
6. McCarthy, Alison. Worldwide Ad Spending Forecast. s.l. :
eMarketer, 2013.
7. Marshall, Jack. Why StubHub took programmatic
in-house. Digiday. [Online] January 13, 2014. http://
digiday.com/platforms/stubhubs-in-house-approach-to-
programmatic-ads/.
8. Marshall, Jack. WTF is a Demand-Side Platform?
Digiday. [Online] January 8, 2014. http://digiday.com/
platforms/wtf-demand-side-platform/.
9. Glass, Russell. The Real Promise Of Programmatic:
Always On, Multichannel Marketing. AdExchanger.
[Online] January 9, 2014. http://www.adexchanger.com/
data-driven-thinking/the-real-promise-of-programmatic-
always-on-multichannel-marketing/#!.
10. Joe, Ryan. NY Times Discontinues Programmatic
Advertising Role. AdExchanger. [Online] February
19, 2014. http://www.adexchanger.com/publishers/
ny-times-discontinues-programmatic-advertising-role/.
11. IDC Information and Data. Real-Time Bidding in the
U.S. and Worldwide, 2010-2017. 2013.
12. Zogby Analytics. Digital Advertising Public Opinion
Poll. 2013.
13. Teradata. 2013 Teradata Data-Driven Marketing
Survey, Globel. 2013.
14. Ad Ops Insider. Data Management Part IV: Syncing
Offline Data to Your DMP. Ad Ops Insider. [Online]
July 22, 2011. http://www.adopsinsider.com/online-ad-
measurement-tracking/data-management-platforms/data-
management-part-iv-syncing-offline-data-to-your-dmp/.
15. Ad Ops Insider. Data Management Part III: Syncing
Online Data to a Data Management Platform. [Online]
July 21, 2011. http://www.adopsinsider.com/online-ad-
measurement-tracking/data-management-platforms/
syncing-online-data-to-a-data-management-platform/.
16. Kantrowitz, Alex. Poll: Majority of CMOs Look to
Buy Programmatic Ads Directly, Bypassing Agencies.
AdAge. [Online] November 20, 2013. http://adage.
com/article/digital/brands-buy-programmatic-ads-
agencies/245335/#!.
17. Grabowski, Marc. Charting a Path to In-House
Programmatic. AdExchanger. [Online] December 12, 2013.
http://www.adexchanger.com/data-driven-thinking/
charting-a-path-to-in-house-programmatic/.
18. Winterberry Group. Taking Cues from the Customer:
“Omnichannel” and the Drive for Audience Engagement.
2013.
10

“It is much more cost-effective to send emails
to specific segments rather than a blanket
‘broadcast-to-everyone’ approach. It is also
best practice because the email is more likely
to be relevant.”
Source: Econsultancy Email Marketing
Roundtable briefing, November 2008
10000 Innovation Drive, Dayton, OH 45342
U.S. and Canada 1-866-548-8348, For International Callers: (937) 242-4030
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When Our Powers Combine: The Impending Convergence of Advertising and Marketing

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When Our Powers Combine: The Impending Convergence of Advertising and Marketing