MAdtech Point: Break down and rebuild the legacy digital advertising system

Existing digital ad and marketing systems cannot afford to find money to rewire themselves. It will be an outside job. But whose job?

Published: Sep 4, 2023 04:52:59 PM IST
Updated: Sep 4, 2023 05:00:55 PM IST

MAdtech Point: Break down and rebuild the legacy digital advertising systemThe emergence of digital public goods infrastructure is going to give the Fintech (E-commerce) companies a huge runway to grab the share of the advertising budget. Image: Shutterstock

There are three types of people in this world: those who make things happen, those who watch things happen and those who wonder what happened. Advertising industry is somewhere between the latter two types. Tectonic shifts are happening to the advertising and marketing industry. Some of these are global in nature, while a few are specific to our country.

In my view, three trains have already left the station, leaving the industry with very few options but to make fundamental changes to their operations, else reconcile to play in a smaller and smaller addressable market (read Linear TV like Print)

Train 1: Responsible use of consumer data. For more than a decade, we have been talking about General Data Protection Regulations from the EU. While the US and UK are still forming their regulations; India has joined the EU with its own digital personal data protection act. With its own unique consent management mechanism, under the aegis of a data protection board and a clear articulation of who is a data fiduciary and their obligations, there is a need for the Adtech and Martech systems in India to customise its technologies for India. It will simply not be possible to deploy global customer data and relationship systems in India, just like that.

Train 2: There is more data outside an enterprise today than their own. Brands and publishers have long remained very comfortable with bigtech companies exchanging consumer data for search, social and commerce solutions in return. On last count, more than 50+ technology companies across search, social, e-commerce, entertainment and news have built their own walled gardens, rendering the 50,000 Cr digital advertising industry to become a concrete jungle with nearly no infrastructure for collaboration. This has resulted in near total absence of consistent measurement metrics for the industry. Above all, it has resulted in an unfair competitive advantage for a select few companies that hoard and control consumer data. Nett nett, there is no ONE report on the actual size of the advertising industry today.

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Train 3: Rising digital public goods infrastructure. India leads the world with this infrastructure today. Rapid adoption of new and enhanced service delivery of identity systems, banking and payments has fundamentally changed the way consumers shop, entertain and now even travel. This infrastructure has enabled a level playing field for all the players and offers secure collaboration of data with highest levels of security and compliance measures. Some of these features like account aggregators framework, consent management through DigiLocker, unified payment interface and open network digital commerce are totally relevant and applicable for the AdTech and Martech ecosystem. These companies are far more equipped and compliant to operate in the digital advertising ecosystem.

There is a need to totally re-imagine the existing digital advertising and marketing systems. Forrester talked about the convergence of AdTech and MarTech systems many years back. Industry experts even coined a new term, MAdtech, but so far, very little is being done in this field. We continue to have multiple systems across CDP, CRM, DSP, SSP, DMP, adserver, verification and few more such systems, connected to each other like a frankenstein stack, protecting legacy businesses and preventing real growth from being unlocked.

However, the emergence of digital public goods infrastructure is going to give the Fintech (E-commerce) companies a huge runway to grab the share of the advertising budget. They do not have to invest separately in identity systems, consent management and verification systems, and instead focus on building and delivering their core services. They have learnt to collaborate far more efficiently with far more sensitive sets of consumer data like finance and banking. Advertising industry must learn from this and rewire their existing business models.

Some thought starters:


What if we leverage the existing digital public goods infrastructure for consent management and identity resolution instead of re-inventing the wheel separately?

What if we come together to create an open network advertising system that unlocks and brings in more advertisers? We will really know the actual size of the market!

What if we are able to bring analog and digital advertising systems on to the same platform? We will be able to measure the true ROI of advertising better!

Existing digital advertising and marketing systems simply cannot afford to find monies to rewire themselves. It will be an outside job. FinTech systems are already equipped with all the necessary tools that are required for digital advertising.

This is going to be the best time ever for digital advertising. To Break down and ReBuild.

Authored by Gowthaman Ragothaman

Ragothaman is a 30-year media, advertising and marketing professional and CEO of Aqilliz, a blockchain solutions company for the marketing industry.

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