Often in desperate need to find innovative new ways to actively engage with their target audiences.
Many brands and businesses rely heavily on marketing, seeing it as pivotal to their success. However, the old methods simply don’t cut it. They need to be able to stand out from the crowd, cut through all of the noise and genuinely connect with their target audience and all in a matter of seconds.
Step up MADTech.
What is MADTech?
MADTech is the coming together of marketing, advertising and technology. It is a major growth area for tech where fresh marketing perspective and innovation combine.
A whole host of start-ups, agencies, app and software developers in-house and out are looking to find innovative ways to use technology, in particular emerging tech, to engage with consumers in ways that can add value and ultimately be meaningful.
As Rod Banner neatly summarises on 3la: MADTech is about “selling to an increasingly savvy and intolerant audience, using new tools and new strategies.”
As such, any emerging technology with the potential to engage customers differently will have the ability to disrupt the marketing landscape. With this rush to utilise emerging tech, using data and analytics, developing bespoke software, there is a lot of activity that can potentially be classed as qualifying R&D activity, which could generate a benefit from HMRC. Many agencies, brands and start-ups operating in the MADTech space can claim R&D tax credits, enabling them to recoup up to one third of the development costs incurred.
Why MADTech is Necessary
With traditional marketing efforts increasingly struggling to find traction, a new breed of digital marketers began to reassess digital marketing and social media, and how traditional approaches could be adapted to utilise the range of new tools at their disposal.
Brands quickly moved their marketing efforts into the online space and social media in particular. However, the success was mixed and notable early successes were relatively short-lived in most cases.
Millenials were quick to mistrust brands on social media, especially when there was a clear disconnect between what brands were saying and reality. With digital advertising, a point was soon reached where consumers were no longer engaging. They were being bombarded with ads and over-messaged every time they went online. These ads did not speak to them directly. Again, we reached a point where something had to change.
The next stage of transformation placed the consumer at the forefront of everything. A unique and highly-personalised experience for individual consumers was now the key to effective marketing. This required a new way of thinking and a whole set of new tools to help connect and engage with audiences – MADTech was born.
MADTech and Data
MADTech tends to focus on collecting and utilising data to identify audiences and to better understand what they want to see and when. Many of the emerging technologies in the MADTech space are powered by data. Big data feeds help marketers understand their audience and find that marketing sweet spot of right message in the right place at the right time.
By being able to better predict customer behaviour, marketers can ensure they tailor and improve their experience. The development of predictive algorithms, based on data, means that marketers can increase engagement. There are several start-ups and businesses that look to predict consumer behaviour.
Unruly, a social video advertising platform, aims to improve the shareability of video ads by utilising a predictive algorithm. Based on an impressive data set, the algorithm evaluates the content and then programmatically serves it to custom audiences. Some of the most iconic viral marketing campaigns of recent times have been powered by Unruly, helping them dominate the earned media space.
London-based Yieldify also use technology to predict a customer’s onsite behaviour and their intent. Specifically, the technology here anticipates when a user is about to leave a website without converting and delivers a compelling and tailored message just before they leave. By reacting and customising the experience in this way, they reduce site abandonment and increase conversions for their clients.
Another angle that is being explored is optimised marketing campaigns based on time of day. Mobile advertising app Adludio uses data science in many of its campaigns, including a successful one for KitKat that gave mobile users the chance to virtually open a KitKat bar during their morning break times.
Marketing is no longer about mass communication. Large-scale fit-all campaigns with generic messaging are simply not effective in today’s media landscape. Customer experience needs to come first and that means highly personalised marketing. You can no longer blindly push and force your messages onto people en masse – a consumer’s experience and their interaction with your brand should be theirs to own. This means that you need to get them to come to you at the right time and deliver increased levels of personalisation.
How is this achieved?
Marketers can focus on data and the insights it provides as well as new technologies to engage more personally. Experience management company Qubit allow brands to deliver personalisation at scale. In order to do this, they provide access to data gathered from their user testing platform. This allows businesses to provide a more personal experience in close to real-time.
London-based Sliide provides brands with the opportunity to deliver media content to users before they unlock their phones. It personalises this experience, by allowing marketers to target based on age, gender, time, location and interests. This helps ensure that the users’ interests are matched and they are in a position to engage with the brand.
One form of personalisation can be location-specific, delivering ads, discounts and other content by location and their contextual environments. Geo-targeting in MADTech is often based around Beacon technology and chips embedded in smartphones such as BLE (Bluetooth low energy), NFC (Near Field Communication) and RFID (Radio-Frequency Identification) that can accurately track smartphone users.
Personalising by location allows marketers to provide more relevant messaging or information to help consumers. This could be anything from the delivery time to their address to discount codes and special offers.
It’s not just smartphones that are the focus of geo-targeting. Other forms of wearable technology and embedded chips can be used to trigger location-specific advertising. OgilvyOne UK for a Battersea Dog’s Home campaign used it to great effect in their Looking For You campaign that used RFID chips embedded in leaflets to trigger several ads as people made their way around a shopping centre. The results were impressive:
Video Advertising & Marketing
Video marketing again is hard to leverage effectively. Brands must create amazing video for different audiences across multiple platforms on a daily basis in order to compete. The challenges are numerous but this presents an opportunity for technology to assist in delivering solutions.
Social media platforms like Facebook, Twitter and Snapchat are all experimenting with technology so that compelling video can be integrated into their ad delivery systems.
User Generated Content (UGC)
In video marketing, one way in which marketers are working with brands is by leveraging user generated content (UGC) to create ‘authenticity’. These videos, that can remain unbranded, provide compelling messages and spark conversations without ever appearing like marketing.
One such company is Seenit, an app that allows brands to co-create quality video content using footage from their customers. The app allows marketers to collect video content and footage from smartphones and customise it, much like this Vodafone campaign which is made from footage secured by a 115 individual cyclists:
Another company looking to do new and interesting things with short form video is Vidsy who look to ‘redefine video for a mobile and social generation’ and connect brands to millennial audiences. They aim to do this by getting millenials to actually create videos and then carefully selecting and curating the visual video content for the brand’s needs. UGC feels more authentic and genuine than other forms of brand videos.
Social media is a huge area for MADTech. One of the strategic aims of MADTech is to spark and encourage relevant conversations that feature a particular brand. Once people engage with your brand, you increase your influence, gain referrals and recommendations and ultimately generate sales. It is therefore vitally important that brands and marketers earn this engagement. As a minimum, they need to be able to see and handle all active channels in real-time, responding to conversations when they happen. This is a challenge and a focus for MADTech.
Another big MADTech area is programmatic advertising on social media. Programmatic ads rely on programmatic algorithms to purchase online advertising rather than traditional media buying agencies purchasing ad inventory. In doing so, it makes the whole process far more efficient and thus cheaper, and allows marketers to focus their attentions elsewhere. One such company operating in this space is eContext who have developed technology that processes Twitter in real-time in order to serve relevant ads either based on topics or specific target audiences.
Dealing with the AdBlockers
AdBlockers present a problem for both marketers and publishers alike. They are becoming increasing popular with 18% of British adults using them according to the Internet Advertising Bureau UK’s Ad Blocking Report published in November 2015. They are particularly popular among millenials, who see them as ‘interruptive’ to their online experience. One of the outcomes is that publishers are looking to unlock new revenue streams to replace those lost from advertising, they are most likely achieving this by turning to technology.
Although some technology is inevitably focusing on encryption and overpowering the Ad-block technology by encrypting ads, there is a whole wave of technology that looks at the main issue behind the trend: that consumers don’t actually want ads, they want something of value. Start-ups are trialling and investigating new ways to serve content to users that does not ‘interrupt’ their online experience.
Here is a NSFW clip from South Park exploring some of the issues that many people experience with:
London and New York based Yavli have developed a digital advertising platform that directly addresses the core issues that gave rise to ad-block technology. It provides sponsored content in a non-intrusive way that is designed to enhance the user experience rather than be detrimental to it. It uses a patent-pending technology to reach and engage ad-blocker users with optimised content.
The Future of MADTech
MADTech is a rapidly evolving area, with technology quickly being picked up and blended with marketing in exciting new ways. The future promises even madder tech and huge potential for innovation. As users become more resistant to forms of marketing, it must evolve to find new ways of delivering genuine engagement. Some key areas to look out for include:
As virtual reality technology continues to improve and develop, it opens up a whole world of marketing opportunities. With Facebook recently creating a team to help users ‘connect and share’ in virtual reality, there are clearly opportunities to bring conversations about brands into this space in original and engaging ways. With Oculus releasing their Rift headset and Samsung improving their headsets, we are moving towards fully-realised virtual worlds with huge potential for new engagement models.
Machine Learning and AI
Machine learning and artificial intelligence are already a key part of MADTech but have the potential to develop yet further. Machine Learning is all about identifying patterns to segment audiences and predict their behaviour by using various complex algorithms. There are different levels of sophistication but even simple programmes can help identify niche customer groups and allow marketers to target them. It unlocks opportunities to combine with AI where more of the marketing process will become automated. With machines identifying and understanding user behaviours and then AI bots employing human language and even emotions to chat with potential customers in real time.
Are you innovating in MADTech or AdTech?
MADTech is an area where risk-taking and problem-solving is widespread. With each technological advance comes a wave of innovative people finding ways to adapt it to enable more effective marketing and provide solutions to common issues. MADTech and R&D therefore go hand in hand.
HMRC’s test for genuine R&D is whether an ‘appreciable improvement’ has been found, having addressed a ‘scientific or technological uncertainty’. This is hugely relevant to MADTech because it gave its clients a competitive advantage, and indeed itself one in being able to market these new capabilities to other potential clients.
There is huge potential for MADTech and AdTech businesses to secure R&D tax relief.
If you have created something for a client that required you to venture into the unknown then chances are you can claim back R&D tax credits worth around a third of the associated development costs. If you brought together creative ideas with an intelligent problem-solving approach, and delivered solutions unique to the problems presented, then you should explore whether these costs can qualify for R&D tax credits.
Larger marketing agencies and brands are also carrying out qualifying R&D activities as they develop their own custom tools in-house instead of paying for pre-developed tools to track and improve their marketing process. This way they get the functionality and customisation they require and can claim back some of the costs.
London is already a hotbed for marketing advertising technology start-ups.
The UK is in a great position to lead the way when it comes to experimenting with new ideas in marketing and seeing how technology can be used for new and exciting ends. With a spirit of adventure and collaboration, the future is certainly bright.
By claiming back R&D tax credits for the risk-taking and problem solving aspects of a project, you can invest in further research and innovation to help ensure that the UK continues to lead the way in this area. ForrestBrown are here to help you identify the areas of your work that qualifies as research and development under the HMRC tax credit scheme.
If you are developing products or services in any AdTech of MADTech areas get in touch with ForrestBrown. We specialise in identifying and maximising digital research and development to help our clients claim back tens, or even hundreds of thousands of pounds each year.