Today’s marketing industry is a long way from achieving its end-game of a system that delivers the perfect creative through the best medium at the optimal moment to each individual audience member.
To move toward that vision, the industry is evolving from an impression-centric paradigm (what does this piece of media cost, how many impressions will it generate and what does the audience look like?) to a user-centric paradigm (what are the characteristics of this particular user at the point at which they encounter my brand?).
Two fundamental dynamics underpin this shift: a focus on omnichannel data and multi-touch attribution.
Omnichannel describes the efforts to link data from multiple channels to a single user identity. In fact, there’s an even more profound goal, which is to unify data not only from marketing channels but across all the company’s customer touch points, including customer service, logistics/delivery and repair/maintenance.
This requires commingling companies’ own data (first-party data) with data generated by their marketing partners (third-party data). As these disparate data sets are aggregated and cleansed, it becomes possible to generate rich profiles on each individual user.
Platforms that can deliver personalized creative at scale will become vital components of tomorrow’s marketing systems.
This is a revolution in marketing. It is shifting marketers from thinking in terms of media, channels and audiences to thinking about personalized messaging to individuals, each with their own preferences, personal history with the brand and unique value to the brand.
Multi-touch attribution (MTA) depends on omnichannel data. It attempts to more accurately credit each touch point between the brand and the user for its contribution to sales. For example, if a user saw a TV ad 50 times, then clicked to purchase off the first display ad they saw, MTA would give significant credit to the TV channel for influencing that purchase.
Armed with these capabilities, marketers can start to focus on sophisticated consumer marketing questions, such as:
- How do I communicate with each customer in a consistent manner across all my brand’s customer touch points? For example, if there was a problem with a product shipment, how do I make sure that my next communication isn’t a request to recommend my service to others?
- How do I evolve my communications with each customer over time to maximize their value to my brand? For example, how do I make sure I appropriately move from “consideration” messaging to “purchase” messaging for a particular user?
What Are The Consequences Of This Omnichannel, Multi-Touch Attribution Revolution?
Marketers will start to think much more broadly about their brands’ touch points with customers. Far beyond paid media, marketers will start to take responsibility for customer support, aspects of sales and even product presentation on web and mobile platforms. Ultimately, the role of chief marketing officer (CMO) will be redefined more broadly.
Solutions that accurately tie together data across channels are becoming critical pieces of architecture. Drawbrid.ge, for example, tries to tie devices together into a single user profile;LiveIntent seeks to marry email profiles with web behavior.
CMOs will increasingly instrument their own companies’ systems to produce useful first-party data from customer service interactions, returns, in-store consultations and more. Companies, such as StellaService for customer service and RetailNext for in-store tracking, are developing solutions here.
A next generation of customer data platforms will emerge with the following characteristics:
- Expertly aggregates and joins disparate customer data sets
- Structures and organizes data around user profiles
- Auto-discovers natural audience segments of users who group together
- Manages data and audiences in real time
- Supports triggered events
- Makes all user data and audience segments available via APIs
- Supports marketers directly, rather than via the IT department
Companies, such as Lytics and Segment.io, are innovating on this vision.
Marketing decisioning will relocate from within channels to across channels. The logical place to locate the marketing decisioning engine (which determines which creative should be served to whom, when and how) is adjacent to the aggregated data, which it uses for its decision. Omnichannel data, by definition, sits above the individual channels.
The corollary is that sophisticated, single-channel decisioning systems, such as Responsys for email, will become less relevant and will lose share to cheaper, execution-focused alternatives, such as SendGrid.
Platforms that can deliver personalized creative at scale will become vital components of tomorrow’s marketing systems. This is one of the dynamics that is least appreciated by investors — perhaps because it is hard to do well, and investors have been burned here before.
Marketing messages perform best when they are tailored to the characteristics of the user and the particular touch point with the brand: Is the user a newcomer to the brand? Did the user recently complain to customer service? Are they awaiting a delivery? Are they a high-potential prospect? Companies, such as SundaySky for video and Persado for copyrighting, are focused on this area.
What Are The Implications For The Major Players In The Industry?
Google and Facebook have a good grip on market dynamics, with Facebook particularly well-positioned because the entire company has been built upon the concept of a user profile as the basic marketing unit.
Both companies understand that there will be a battle over who owns the marketing decisioning engine. Google and Facebook, which control the largest pools of third-party data, want companies to upload first-party data so Google and Facebook can aggregate it with the vast pools of third-party data they already control.
Both companies have recently launched “custom audiences” products that facilitate first-party data upload. This gives de facto control of the marketing decision to Google and Facebook, and takes it out of the hands of the marketing companies; greater control will enable Google and Facebook to generate higher margins.
The industry is evolving from an impression-centric paradigm to a user-centric paradigm.
Smaller companies may be happy to have Google and Facebook become theirde facto multi-channel marketing stack, but larger companies with higher volumes of their own valuable data will attempt to manage their own marketing decisions.
These larger marketing companies represent the target market for Oracle, Adobe, Salesforceand others with ambitions to build the next-gen enterprise marketing tech stack.
Of these, Oracle has arguably accumulated the most valuable set of assets with the acquisitions of Eloqua, BlueKai, Compendium and Responsys. But, the company’s focus on heavy implementations and its orientation toward serving IT, as well as marketing, may hinder its growth.
In and among these elephants, there is of course still room for startups to thrive. It is likely that the larger companies will continue to acquire to build out their capability set.
What Are The Some Of The Implications For Users?
Users will find that companies become smarter about communicating with them — both to sell them stuff and to provide support and services. Users will be prompted to restock their favorite coffee brand; reminded to buy insurance for their upcoming vacation; offered test drives of exactly the model of car they were considering; and automatically answered by a mortgage consultant when they call their bank with a mortgage inquiry.
Many will find this creepy, and there will be much ink spilt on the subject of privacy. But the great majority of users will not care — reasoning that the improvement in service and advertising relevance is worth the cost of a machine knowing their habits.
In some ways, this is similar to retail a century ago when the local storekeeper knew your preferred brands, your shopping habits, when you had guests in town, your medical conditions or other personal details, and tailored their service appropriately. Some people appreciate the personal service; some would prefer the storekeeper not to know their business.
The difference is that this time around, Internet companies are reselling what they know about you to others. That is uncharted territory — and a subject for other discussions.
Disclaimer: I have invested in a number of companies that are relevant to these themes, and a subset are mentioned in this article. They include SundaySky, Windsor Circle and Lytics. Comcast Ventures is also an investor in StellaService. I invested in these companies because I hold this view of the future; I don’t hold this view of the future because I invested in these companies.