The Impact of Data Regulations on Martech and Adtech

We have spent some time on this blog discussing data privacy, security, and the regulations around how business can use personal information. While we have focused mostly on the highly-regulated industries of healthcare and finance, we thought it was important to spend some time discussing two industries that are growing in scale and importance—marketing and advertising tech.

Marketing and advertising technologies (martech and adtech for short) are two closely related industries that rely heavily on personal data collection and processing to provide value to their customers. This is the first of a two-part series where will discuss both, starting with martech. 

Martech vs. Adtech, Briefly

Martech and adtech intersect in many areas, and some marketing industry professionals consider adtech to be a subset of martech. Because of the high amount of overlap, we thought it would be useful to point out some differences before diving too deeply into martech. 

Similar to the non-tech versions of these disciplines, martech focuses on nurturing one-to-one relationships with known individuals using first-party data, while adtech takes a one-to-many model with mostly unknown individuals, using second- and third-party data. Martech companies usually operate under a SaaS model, while adtech companies charge a commission on top of a cost per impression (CPM). 

It’s important to note that the lines between martech and adtech are blurring. Digital ads are often components of marketing campaigns, so it’s not as if these technologies are used in a vacuum. In addition, as users become less anonymous and easier to identify, the one-to-many advertising model may change. 

So, What is Marketing Technology?

Marketing technology is the software and tools that allow businesses to achieve marketing goals. This includes conducting campaigns, collecting information about prospects, and tracking results. The Chief Marketing Technologist blog lists more than 7,000 products as being part of the marketing technology landscape. The industry typically divides these tools into the following six categories: 

Advertising

As mentioned earlier, we’ll be devoting an entire article to advertising technology, but here’s a brief overview of the landscape. Adtech tools help advertisers place, deploy, and measure the effectiveness of ads across web and mobile platforms.  

Major players: AppNexus, Google AdWords, Outbrain, MediaMath 

Content marketing and experience

Content marketing technology is a large category that is comprised of most of the tools that we attribute to digital marketing. This includes content creation, SEO, CMS, marketing automation systems, email, and digital asset managers. 

Major players: Hubspot, Marketo, Yoast, Salesforce Marketing Cloud

Social media

Social media tools help marketers indirectly collect information about their audiences. They also manage and automate tasks like updating posts and uploading new content. A growing subset of social media martech includes influencer tools that help marketers connect industry thought leaders with the right audience.

Major payers: Hootsuite, Sprout Social, Digimind, Social Circle

Commerce and sales enablement

Sales automation and customer support tools allow sales and marketing professionals to manage ongoing relationships, upsell, and more easily communicate with customers. A major subcategory is customer relationship manager (CRM) tools.

Major players: Salesforce, Hubspot, Zendesk, Zoho

Data and analytics

One component of marketing is analyzing data to create a more personalized experience. Data management platforms (DMP) are mostly used to collect third party data for advertising purposes. Customer data platforms (CDP) collect first-party data. Analysis tools collect information about website and app visitor data and behavior.

Major players: Adobe Audience Manager, Google Analytics, Blueshift

Administration and Productivity

These are tools that are not uniquely made for marketing, but are essential for marketing operations teams as they become more technical and precise with their work.

Major players: Basecamp, Asana, Atlassian

Drilling Down on Martech and Data

Marketing has always been a data-driven discipline, but the proliferation of digital tools has given marketing professionals even more information to work with. With gated landing pages, email newsletter lists, and interactive forms, marketers have the ability to gather almost infinite amounts of first party information and create a 360-degree profile of a customer.

Customer Data Platforms (CDP)

We’re going to take a deeper dive into the customer data platforms (CDPs) that we mentioned earlier. CDPs are marketing-specific tools (as opposed to CRMs which also have sales and customer service functions) that serve as a central repository of marketing-related data. The CDP Institute, a group of martech vendors led by technology analyst David Raab, define CDPs as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” 

The data collected comes from internal and external sources. According to the CDP Institute, CDPs should be constantly building and refining a customer profile based on the information that it is being fed. CDPs should not be pulling data to create on-the-fly profiles because such a request leaves open the possibility that a data source could be omitted. 

Gartner’s standard for a CDP is a marketer-friendly, web-based interface that enables data collection, profile unification, segmentation and activations.

Identity Resolution

CDPs are one tool that marketers use for identity resolution, the process of reconciling data points about an individual across platforms and devices.

With all of the “identifiers” collected across martech platforms, identity resolution is crucial to creating a true customer identity. Users give consent to companies to collect identifying information like email addresses and device IDs. Companies then use this information to connect these individuals to other data points using matching algorithms. The benefit for customers is that they can receive more personalized experiences from brands. 

Martech and data regulations 

So how can CDPs and identity resolution continue to produce results in an age of strict data privacy regulations? We have discussed at varying levels of detail both the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). We believe it’s worth some time to frame these laws in the context of martech because they both regulate the business use of personal identifying information (PII).  

GDPR

GDPR went into effect in May of 2018. It places limitations on the types of data that companies can collect, process and store. In addition, companies must receive explicit consent from a consumer in order to process data for reasons beyond which it was originally collected. One of the most notable provisions on GDPR is the so-called “right to be forgotten” in which a consumer can request the deletion of all of their personal information.

CCPA

CCPA goes into effect in January 2020 and is widely thought to be the model on which other US states will base their privacy laws. One of its main points of difference with GDPR is that consumers have the explicit right to opt out of the selling of their personal information. 

These rules seem like they would put a damper on all things martech, but fortunately, they don’t have to. Here’s how to keep your martech system going:

  • Stick with vendors who are compliant with regulations and have the audits to back it up.
  • Perform an audit of your martech stack; you need to know the kind of data you’re collecting, why, and if it’s being transferred to other parties. 
  • Prioritize quality over quantity of customer data and be upfront about the value that data collection provides.

If you can control your data successfully, your biggest problem will be which of the 7,000 (and counting) martech tools you need to adopt to market effectively and propel your brand.

Not to mention, you’ll also be ready to successfully leverage adtech