“We’re at the crest of when digital has led to a place where advertising as we know it is dying,” Sanjay Dholakia Marketo global CMO, told AdNews ahead of the inaugural Lions Innovation Festival which launched today (25 June) - as a statement about the merging worlds of technology and creativity.
“Everybody here [in Cannes] knows it. In private one-on-one conversations nearly every agency that I talk to will admit that they’re worried their business model won’t exist in five years,” he said.
Dholakia believes that by grasping customer engagement technology and bringing it together with ad tech to bridge first and third party data, agencies can drive more loyal relationships from clients - that will result in fewer accounts going up for pitch so often - because the agency is embedded at a deeper level to the business relationships with customers.
In the old world of advertising, brands used to “rent attention” and didn’t own that customer relationship themselves, he reckons, and agencies didn’t know how to help so just facilitated renting more attention through advertising.
“Marrying the ad tech [that offers third party data] and marketing tech [that provides first party relationships] gives [agencies] the opportunity for a fundamentally different business model – a higher value business model and a more sticky relationship with brands,” he said.
“If the agencies are the ones teaching, driving and owning these marketing and ad tech platforms for their clients, that makes them very sticky. They won’t get put out to bid ever if they are running the brand’s engagement marketing because they are getting to know their customers so intimately. Agencies are realising that they have to become more valuable than just the latest, most clever idea,” he said.
However Marketo doesn’t believe that the ad tech side of the business will replace advertising – rather co-exist.
“What we’re hearing is that marketers are spending a lot of money [on advertising] and I’m not sure what I’m getting and that’s why I’m starting to invest here [in marketing technology]. We saw a strategic opportunity. It doesn’t do anyone any good to make this an ‘and’ ‘or’ conversation. It’s the genius of ‘and’ versus the tyranny of ‘or’.”
He believes that the industry is at the start of a five year adoption curve, and within two years all sophisticated brands and marketers will be on board.
“The thing is, it’s not just about advertising. It's core business objectives at stake,” said Dholakia, citing a case study where a brand that layered third and first party data through its platform reduced its acquisition costs by 80%, freeing up budget to invest elsewhere.
Rosie Baker travelled to Cannes courtesy of Marketo.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at rosiebaker@yaffa.com.au
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