The Enterprise Software Powering Digital Marketing

In 2012 Gartner released an oft-repeated prediction that CMO’s will spend more on IT than CIOs by 2017. It is a well-founded prediction, as growth in digital marketing has ramped up dramatically over the past few years. Over the next few years, double-digit CAGR in spending on marketing technology is predicted, supporting this assertion.

With all of the activity in digital marketing today, it is crazy to think that Omniture was the only marketing technology company valued over $1 billion just  a few years ago. While no marketing-specific “decacorns” have emerged, several companies have racked up serious valuations in private markets, acquisitions, and IPO’s, attesting to the growth in this area.

Marketing automation has led the way, with companies like ExactTarget and Pardot (B2C and B2B marketing automation companies, respectively) being acquired by Salesforce and Responsys and Eloqua being bought by Oracle. I have personal experience selling ExactTarget and Pardot through my role at Salesforce, and experience using Eloqua in my previous roles at Dell and Quest Software.

These technologies make connecting sales and marketing so easy that any company not using these tools (or something similar) is putting itself at a gross disadvantage. For example, using either Pardot or Eloqua, a company can automatically capture inquiries from its website, assign a lead score based on the user’s activity (and past history with the company), and route to the appropriate sales rep based on location, size, industry, etc. These tools can also handle things like automated drip email campaigns, freeing up marketing staff from manually managing tasks like this.

Outside of the ego-fueled battle for supremacy in the marketing and CRM technology market between Oracle and Salesforce, many other technologies of great potential are emerging. Newcomers are building businesses on predictive analytics, 1:1 marketing (personalization), and optimizing tracking/targeting.

There is huge potential to leverage these technologies to transform things like customer acquisition cost, customer satisfaction, loyalty, and other key marketing metrics. If I could give any piece of advice of to marketers today, it would be to spend a little less time reading AdWeek and a little more time reading TechCrunch. There’s a good chance that tomorrow’s headline about a marketing startup landing a Series A could have a tremendous impact on their job in the coming years.


Facebook can help you buy anything (except friends)

Facebook just announced that it is acquiring a personalized shopping search engine called TheFind, which has over 15 million current users.

TheFind touts its search engine as the only way to search everything available for sale on the internet, and can match even very vague terms like “white sweater” with a vast array of relevant options.

TheFind also has localization features, meaning that it can return relevant results within a specified geographic area in case the user prefers to buy in-person. Since TheFind aggregates prices across the universe of online and brick and mortar vendors, the user doesn’t need to traverse multiple websites (or physical locations) to find the best deal.

Facebook plans on shutting down the search engine capabilities, but rest assured that they have some clever plans for monetizing this technology. Most likely, this will involve better contextualization of posts and messages that Facebook users generate to make advertisements even more hyper-targeted than they already are.

Perhaps in anticipation of this acquisition, Facebook recently launched an ad sales team with the express purpose of promoting specific items that advertisers are trying to push. There’s no doubt that TheFind strengthens Facebook’s ability to pitch this service to advertisers, as well as charge a significant premium versus

Although Facebook ads may now potentially become even more creepy than they already are, this acquisition should be a win-win-win. It’s win for consumers, who should receive more relevant and better offers; win for advertisers, who can better match ads with the right consumers; and a HUGE win for Facebook, which should be able to further mark up its ad inventory.


Facebook Buys And Shuts Down Shopping Site TheFind To Boost Commerce In Ads

Implications of the Quantified Self

The emergence of mobile devices, constant connectivity, and big data has led to unprecedented visibility into our lives. We now constantly have applications tracking our searches, our likes, and every step we take (maybe even every breath we take?).

This parallel identity can be called the “quantified self”- the aggregation of all the actions we take online, collected into a measurable history from which a capable data scientist can construct an eerily accurate demographic and psychographic profile. This is fantastic news for marketers, and enables companies to more accurately target the right consumers with the right offers, at the right time (and increasingly, in the right place). We as consumers benefit from this as well- we receive less “spam” and irrelevant information, and receive better education and better deals on the things we actually care about. There’s no doubting that the evolution of the quantified self has been good for business- but what about the effect on our personal lives?

The aforementioned trends started to remind me a lot of George Orwell’s prescient novel 1984. As depicted in that novel, we now have “screens” that monitor us 24/7- our smartphones. While smartphones don’t actively record us or every conversation that we have, they do collect an amount of personal data that would have shocked Orwell. Think for a minute about all of the data that Facebook is collecting on you- while Big Brother isn’t watching you, Zuckerberg and his team certainly are.

The key distinction between 1984 and today is that an absolutist tyrannical government isn’t forcing this upon us- we are all willingly signing up for this data collection when we sign the Terms of Use for every “free” app and service (as an aside- and not for the easily offended- South Park hilariously lampooned Apple’s iTunes agreement in the “Human CentiPad” episode). Admit it- you never read those ridiculously long agreements- no one does. So who knows how your data is actually being used?

I believe that data today is (for the most part) being used purely for commercial, and not nefarious purposes. However, it will be an incredibly important issue for us to monitor as a society, as it appears that a small oligopoly of companies is collecting more and more data (think Facebook, Google, etc.). Also- behind the scenes, how are the NSA and other government agencies accessing our information? We don’t know the answers to these questions, but they are questions that should impact how we conduct business, how we vote, and how we interact with technology.

Bringing the analogy full circle- Apple made a big splash early on with its 1984-inspired Super Bowl commercial. There’s a certain element of irony that they now more closely resemble Big Brother than the hammer-throwing rebel that symbolized their brand in the commercial.


Children are the future (of advertising)

YouTube Kids launched this week to a decent amount of fanfare, representing a safer, family-friendly alternative for allowing kids to interact with media on the internet.

The service touts features including: a timer (to limit the amount of time kids can spend watching clips); elimination of the search bar, which limits the content available for viewing to a preset menu; and obvious filtering of any content that could be deemed offensive or inappropriate for children. After all, you don’t want your kid searching for “Power Rangers” and stumbling upon the awesomely violent unofficial Power Rangers reboot featuring James Van Der Beek.

Google is not the first to release a video service focused on children. Last year Todd Yellin, Netflix’s Vice President of Product Innovation, came to talk with Columbia’s Media Management Association. When asked about the biggest growth area for Netflix, Mr. Yellin spoke at length about the potential of Netflix Kids (which was already released to the public).

It is clear that the big digital media companies see children as a critical demographic for their business models. I chalk this up to three key themes. In order of increasing importance:

1. Stickiness- where the childrens’ eyeballs go, so will the parents’ (along with their subscription dollars)

2. Competitive advantage- these companies are chasing sustainable competitive advantage in the form of customer captivity- specifically, habit formation. Kids that grow up with YouTube or Netflix as their primary media vehicle will be much more likely to be heavy consumers as adults.

3. Advertising- this new, kids-only offering allows Google to provide advertisers (toymakers, cereal brands, etc.) highly targeted ad inventory that is guaranteed to be viewed by a captive audience of children. This should therefore command higher CPMs/CPCs with specific advertisers and represent a new revenue stream that Google hasn’t been focused on before.

On the downside, parents have a right to be concerned about the frequency and other possible ill affects of all this targeted advertising. “What could possibly happen?”, you may ask. Here’s an anecdote: I had a manager who shared an iPad with his kid. About a month into letting his son download a game on the iPad, he received a bill from Apple well into the hundreds of dollars for in-game purchases that his kid was making to level up in a game. His kid had no idea of the consequences of clicking the button- he just thought it was part of the game!

Increased advertising to unsophisticated audiences will inevitably cause an increase in similar types of incidents across the board. It’s ok to let your kid watch streaming content on kid-friendly providers… you just want to make sure that your credit card isn’t connected to that service!



Insights on the current Digital Boom

I had the good fortune of hearing Henry Blodget, CEO of Business Insider, speak at last Tuesday night’s Digital Investing class. Mr. Blodget shared stories about founding and building the company, explained the trends that Business Insider is capitalizing upon, and his thoughts on where the news media business is heading. A few weeks before that, he presented at the Digital Life Design Conference in Munich, and shared some insights that should be eye-opening for anyone whose business is affected by digitization (in other words, all of us). The slide deck is available here.

Because you probably don’t have time to read through the entire deck, I wanted to synthesize some of the key themes and highlight some of the most compelling points.

The first and most obvious point is the growth of all things digital, and especially mobile- growth in smartphone sales, connected devices, etc. There are some surprising datapoints here- for instance, tablets are growing at the slowest rate since introduction (perhaps due to cannibalization from “phablets”, the fastest-growing mobile category). Also, contrary to popular belief, the market dynamic is not just Apple vs Samsung- Chinese smartphone manufacturers now represent ~25% of worldwide sales.

Secondly, it is sometimes easy to mindlessly praise at the growth of technology, and overlook the “creative destruction” and decline of traditional media delivery vehicles. Print revenues for newspapers are significantly less than half of what they were at peak in 2005-2006, and the growth in the online businesses for newspapers has only made up a very small fraction of this difference. Uber and other digital businesses promise to provide the same level of disruption to other traditional industries.

Perhaps the most mind-blowing fact in this presentation is the absolute growth and domination of Google- it is now bringing in significantly more ad revenue itself than ALL newspapers and magazines in the US combined, and is roughly half the size of the ENTIRE global TV ad market. Wow. Additionally, Google is crushing it in terms of Chrome, Android, and YouTube market share in each respective market as well.

Similarly, according to Nielsen, Facebook reaches more people 18-24 than the four major TV networks. Netflix now has more subscribers in the US than HBO (though the release of the standalone HBO Go app may change that). It is inevitable that money will follow the eyeballs, and this represents a big threat to any traditional media companies who don’t get directly into the digital distribution game themselves. However, a growth opportunity exists with the lines blurring around “primetime” TV, as people time shift their viewing and watch more on mobile devices. This effectively creates an 18/7 split, meaning that media companies can potentially monetize ads 18 hours a day due to increased consumer engagement- representing an increase in the inventory that they can deliver for advertisers.

Despite all of the positive trends and optimism regarding digital revolution, Blodget points to historical booms/bubbles as well as the inevitable busts that followed. He articulates that, based on capital flows and fundraising, we are in a boom but not quite a bubble like the late ’90s (though I would argue we are pretty damn close- 2014 numbers weren’t fully reflected on his charts, and those valuations are creeping towards late ’90s levels).

Based on these charts, the average period from beginning of boom to bust appears to be around seven years. If you categorize the beginning of the current boom as beginning in 2009, that posits a bust occurring sometime in 2016.

Is the party over for these guys? I don’t think so, but they might want to exercise those stock options before the end of the year…


One Tweet Can Define Your Brand (Forever)

If anyone still doubts the power of social media, look no further than the case of Justine Sacco (story available here).

While en route between NYC and Cape Town she posted several insensitive tweets. By the time her flight had landed, her tweets had gone viral, becoming the number one trending topic on Twitter- and it wasn’t a positive response. Even though her Twitter account was deleted and the posts taken down, her name will now be inextricably linked with those posts forever.

Her comments were incredibly stupid, inappropriate, and indefensible. At the same time we have all dealt with the frustrations of travel and I’m sure can understand her mindset at the time of posting these tweets. Should she have lost her job (in PR, nonetheless)? Absolutely. However, should Justine Sacco be forever defined by one careless mistake? I’m not so sure…but permanence and virality are the rules of the social media landscape, and by playing the social media game you are tacitly agreeing to abide by its rules.

There is a lesson here not only for individuals, but brands as well. As brands dive headfirst into social media as new way to connect with customers, structure needs to be put in place. Social media can be a powerful tool for defining a brand, but is wrought with the same dangers that individuals face, and more.

There are numerous examples of successful social media campaigns reinvigorating brands (see some examples here), but there are also instances of rogue tweets/posts tarnishing brands, sometimes irreparably. Companies should have a clearly defined process, with checks and balances or editorial oversight, to ensure all social media posts are on message and don’t cause any (unintended) controversy.

On a personal note, I do feel concerned about how social media will impact future generations. Most of my youthful transgressions preceded the existence of Facebook, but our children may not have the same freedom to make mistakes and learn from them- instead of being defined by them.


How to win at Email Marketing

Tonight I saw a blurb on TechCrunch about a new email marketing company called Iterable raising a seed round, and it got me thinking: email marketing is a (relatively) old medium, so what is new about Iterable’s approach?

Based on a surface level review, I didn’t see anything material that would differentiate them from ExactTarget (disclaimer: I am currently an employee at, parent company of ExactTarget), ConstantContact, or others of that ilk. However, all of these companies seem to focus on optimizing effectiveness in certain areas, which can be construed as the key metrics for winning at email marketing.

Of course, the metrics to use for measuring a campaign should naturally vary depending on the goals of the campaign (Drive incremental sales? Increase awareness and visits to your site?). In other words, first define the goal of sending this email, and then focus on measuring and optimizing towards the metrics that are important for that goal.

Key metrics include:

1. Open Rate

Open rate can be easily tracked via an embedded pixel, letting you know just how many recipients are actually opening your email. In a B2B context, you can generally expect between a 10-15% open rate. Tracking open rates can be very useful for A/B testing purposes, trending, and other comparative analyses, but CTR is more valuable on a standalone basis.

2. Clickthrough Rate (CTR)

CTR is another metric that is frequently top of mind, and is the intermediate step in the funnel between “open” and “conversion”. This represents the percentage of recipients who not only open the email, but also click your link. In a B2B context, you can expect between 2-5% CTR (this will usually be lower in a B2C context).

3. Conversion Rate

Conversion rates essentially measure the effectiveness of your email- did it drive the intended behavior that you were targeting? This can be measured in terms of the percentage of recipients who subscribe, download, or buy from you, per the messaging in your email.

4. Bounce Rate

Bounce rates indicate the percentage of emails that go undelivered. There are two types: “soft bounces” and “hard bounces”. Soft bounces occur when an email is not delivered due to a temporary issue like a full inbox or server problem. Hard bounces are much more serious, since they indicate a faulty target- an inactive email address, nonexistent domain, etc. Hard bounces are bad not only because they represent a worthless contact, but also because ISPs see numerous hard bounces as a flag of spamming activity- so it is important to scrub your list and maintain data quality.

5. Email Forwarding Rate

Tracking email forwarding rates is similar to tracking likes or shares on social media- it can represent hidden value in your campaign and additional “free” exposure.

6. ROI

Ultimately, you are sending these emails because you want to promote your business and make money, right? It only makes sense to build an accurate process for tracking how many sales are actually driven by the email marketing campaign, and weigh this against the costs of running the campaign.

In the pursuit of defining the purpose of the campaign and measuring/optimizing towards that goal, you can implement a number of tactics to increase the effectiveness of each campaign and each individual email. There is a great infographic on these tactics that wouldn’t load properly on the blog, but you can view it here.


Email Marketing Startup Iterable Raises $1.2M

A picture is woth 1,000 words (or a Big Mac)

It is said that a picture is worth a thousand words, and we now know that a picture is apparently also worth a Bic Mac.

During the Super Bowl, McDonald’s will air a commercial about their new “Pay With Lovin'” campaign (see “source” for a clip of the commercial). McDonald’s employees will ask customers to take a selfie in McDonald’s, or do something nice like call their mom to wish her a nice day. Doing so will earn the customer a free meal, and McDonald’s hopefully some viral buzz and goodwill.

As seen in the commercial, this is a “feel-good” campaign about bringing people together, similar to the Coca-Cola Happiness Machine ( or Thai Life Insurance ( campaigns.

Campaigns like these are designed to develop goodwill towards a brand, reinvent their image, and develop emotional attachments with the brand. This is exactly what McDonald’s needs, given its image as an unhealthy, cheap, fast-food restaurant that hasn’t overhauled its brand ethos much since days of Grimace, Mayor McCheese, The Hamburglar, et al.

I believe that this campaign will be a success- at least based on the initial advertisement- injecting some fun and new life into a company that is struggling to compete against the new normal of healthier, higher quality, “fast casual” restaurants.

The fact that McDonald’s is integrating mobile technology (taking and uploading selfies) shows that they are in touch with how digital branding works today. The success of this campaign will rely on in-store execution (are minimum wage employees going to be pysched up and energetic about this campaign?);  virality of the selfies on social media; and minimal negative backlash (there are a lot of ways that this could backfire). Stay tuned, and make sure you have your cell phone on you next time you pop in to grab a McFlurry.


GoodGoogle? No, BadGoogle

To paraphrase Winston Churchill’s famous quote on democracy: Cost per Click (CPC) is the worst form of advertising, except for all of the others that have been tried.

CPC is a beautiful concept- instead of merely paying for impressions (as in the traditional CPM model), advertisers are paying for performance based on how many times people click on their ads. Advertisers can easily track campaign performance, optimize on the fly, and sleep soundly knowing that they won’t exceed their marketing budget.

However, anytime there is a great idea worth billions of dollars, unscrupulous types will try to game the system. In the CPC market, the leading form of misconduct is known as click fraud.

One recent example of click fraud involves GoodGoogle, a hacker (or group of hackers) based in Russia who trolls online forums offering to make competitors’ Google ads disappear. GoodGoogle achieves this by using a botnet (computers that have been hjacked to repeatedly perform simple actions, like clicking an ad), as well as advanced algorithms to enable the individual bots to fly under Google’s anti-fraud radar.
dr evil

GoodGoogle directs the bots at advertisements targeted by its client, repeatedly clicking on the ads. With Google AdWords, an advertiser specifies how much it will pay per click for a given keyword, as well as a total budget. Once that advertiser’s budget is met, Google will begin displaying ads from the second highest-bidder. Hence, by rapidly exhausting the #1 bidder’s AdWords budget, the #2 bidder can gain the top spot while paying a lower price.

Even after paying GoodGoogle its fee (in the form of BitCoin or other cryptocurrencies), a shady advertiser can lower their overall campaign cost with these tactics. It’s a fair assumption that a number of people have done this, since the service has been around since 2011.

At the time of writing,it is unclear whether GoodGoogle still exists (the reference article is from ~six months ago)- but if it does, I can’t imagine it will exist much longer. GoodGoogle has several Gmail addresses linked, and even advertised its services on YouTube, so Google should be able to identify and pursue the perpetrator(s). Further, the onus is on Google to preserve the integrity of the AdWords platform- if advertisers don’t trust that the clicks they are paying for are legitimate, the CPC model will collapse.


Sea change or a blip on the radar?

Did anyone notice an unfamiliar interface when searching for a site on Firefox recently?

For most of us, “Google” has become not only a verb in our collective vocabulary, but also synonymous with search- we don’t even consider going to an alternative when we need to quickly find something. This is partially due to the fact that Google had signed an agreement with Mozilla in 2011 to become the native search engine for Firefox, meaning that it was the default search engine for roughly 50% of browsing (the market share of Firefox and Google’s Chrome browser combined).

However, in November 2014 Yahoo signed a five year deal to supplant Google as Firefox’s native search engine. Users in the habit of typing a search term in their browser window are now automatically directed to search results on Yahoo. Google loyalists like myself (I swear that the relevancy of results is still superior to Bing and Yahoo) now have to make the extra step of consciously going to the Google homepage and entering the search term.

Due to this change in the typical user’s “workflow”, Yahoo is now able to claim one search conducted each time this happens. Google has seen an immediate dip in search market share in the US from 79.3% to 75.2%, while Yahoo’s share has grown from 7.4% to 10.4%. While those raw percentage deltas don’t seem high, that impact across the millions of users in the search market is significant.

It’s my personal opinion that Google will continue to be the dominant player in search, and gambits like this by Microsoft and Yahoo will fail to unseat them from the leader position. However, this is indicative of a trend of more and more anti-Google alliances forming- chiefly backed by Apple, Microsoft, and Yahoo, all of whom have tremendous amounts to gain with each point in market share that Google loses.