Brain Chatter: VCs Aren’t Funding What Marketers Really Want

January 12, 2018 Shane Schick

“Boy, I wish we could get some more technology to deal with some of this stuff,” said no marketing leader anytime ever.

That doesn’t stop the industry from continuing to try.

While technology enthusiasts flocked to Las Vegas this week to drool over the latest gadgets at CES 2018, a New York-based programmatic software firm called MediaMath announced the formation of a venture capital fund that would be specifically aimed at nurturing and growing more marketing-related startups.

MathCapital will be particularly focused on areas such as artificial intelligence (AI), measurement or analytics tools, technology to facilitate opt-ins or consent, and other forms of digital connection like virtual reality.

“Those that can harness the power of digital distribution to generate real business outcomes for marketers are poised to reinvent the practice of marketing,” the firm said in a release.

If you actually talk to marketers, though, they’re not necessarily that interested in reinventing the process of marketing. I’ve sat down with many CMOs who believe any such reinvention should really be more focused on how their CEO or board supports them and gives them the appropriate budget for the work they want to do. Technology? They’re stick of buying things that don’t really work.

I hosted a CMO roundtable with research firm IDC a few months ago, for instance, where several marketers said very bluntly that they’re struggling to find the right tools. They aren’t necessarily looking for more startups. They want something more customized to their unique business requirements. They don’t want a better marketing “stack” -- they want building blocks they can assemble as they need them.

There’s also a question of how “adtech” -- the tools that help manage and distribute ads across online inventory -- will mesh with “martech” -- the tools that tend to be used on the brand side and power a range of experiences beyond advertising. When I was editing Marketing Magazine, we hosted an adtech conference where a senior executive from AOL (now Oath) pretty much guaranteed these two worlds will eventually come closer together, but whether they come together smoothly is another matter.

Investors, like marketers, may be biding their time to see how this all plays out. Pitchbook, which follows such things, has noted a decline in adtech VC deals, which it partly attributed to market saturation.

If I were a VC -- and thank goodness I’m not -- I’d give my money to marketing startups who:

  • Could combine or eliminate the need for some of the marketing tools brands need to work with today
  • Focus less on sexy areas like AI and VR and instead make it easier to take old data in marketing systems and clean it up or organize it so it can be used by the fancier tools
  • Takes a product category that already exists but remakes it in ways that address specific niches like non-profits, health-care, micro-businesses of less than 10 people and so on.
  • Find a more sustainable work-around for ad-blocking
  • Offer better alerts for brand safety issues involving online ads and other content that lives on YouTube and elsewhere

Maybe I’m selfish, but I think I’d also be interested in startups that can offer anything that helps media organizations engage audiences more deeply or improve their ability to make money. After all, there’s no point in all this adtech and martech if the inventory of media properties continues to dwindle.

You can get a lot more perspective on this from the many experts who sent in their 2018 technology predictions to Australia’s Ad News, but I liked this one from a Forrester analyst the best:

Marketers will continue to increase investment in ad tech (and martech) to be more result-driven and customer-centric. 

That doesn’t mean they’ll increase the number of vendors they work with.

It doesn’t mean they’re looking for the next big thing.

Because when all this stuff really works, and you get closer to real customers, technology is the last thing you should notice. 


Shane Schick is the former Editor-in-Chief of Marketing magazine. He tells stories about technology, marketing, innovation, fashion and more at ShaneSchick.com


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