In the Age of the Customer, Data Is King

Successful companies have always been customer obsessed. How to get them, how to keep them, how to make them advocates are all questions that have kept CEOs awake at night since commerce began. Today’s sophisticated data management platforms offer marketers the digital tools to aggregate and mine their data to answer those questions.

The core capability that every DMP offers is the identification of the characteristics of a company’s customers and prospects, addressing the “how to get them” question. Armed with that information, marketers allocate advertising resources and buy media based on those audience characteristics. It’s the very essence of programmatic buying.

But there’s more to marketing than media buying. The most effective marketing operations exercise control over every customer interaction, including email, website, social, call centers… every customer touchpoint, making sure they are relevant and delivering value because that’s how you keep customers. DMP leaders know that and are building, buying, and integrating to collect data from and deliver insights to every digital channel the CMO cares to include.

Evolving a customer into an advocate requires that a product engender a commitment, and even the most sophisticated marketing can only go so far. Creating great products and continuously improving them in step with consumer expectations requires that marketers share their DMP-derived knowledge with their product teams. While that kind of corporate cooperation remains rare, it is the way of the future. And it all starts with data.

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Marketers Aren't Getting What They're Paying For

Marketers have always carefully calibrated their messages and the audiences they wanted to reach, and, for most of advertising’s history, the process was pretty straightforward. Marketers used content as a proxy for audience, and worked with known and trusted entities to carry out their plans. They bought space, delivered materials to publishers, and ads appeared. That was the process for the first banner ad, too, for AT&T on Wired Magazine’s website on October 27, 1994.

While the intent of marketers has remained consistent as they have embraced digital channels, the process of executing advertising is a lot more complicated. In the intervening 23 years since that first banner ad, hundreds of companies have arisen intermediating tried and true relationships between marketers and media. These companies claim to improve the process for marketers by identifying and reaching audiences without the context of content, using modeling practices honed in financial markets.  

But, there are some fundamental differences in the two markets. Financial market regulators would not tolerate, for example, the sort of haphazard standards that are applied to digital media. Any financial institution caught selling fake stock, for example, would suffer severe consequences.

The same doesn’t appear to be true in digital advertising. The result is that the ecosystem is rife with fraud and unviable inventory that essentially robs marketers of their ability to know what they are buying, who they are really reaching, and how to measure their progress. Without that knowledge, they cannot build a sustainable digital advertising practice that performs for them, and that more broadly drives the economy.

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Fake News Challenges Brands' Equity

Brand equity is a precious thing. It takes years to build and can be damaged in a heartbeat by unforeseen events, like product breakdown, and ill-considered marketing strategy. Smart marketers exercise control over how, where, and when their product or service is seen in order to safeguard their brand investment.

The tools and partnerships that marketers must rely on to buy media and execute programmatically preclude the kind of control that marketers expect and exercise in other channels. The result is that they cannot get a comprehensive list of sites where their ads appear. While they can require white- and black lists, without the final recap they have no way to determine whether or not their requirements were met.  

What’s more, marketers can no longer assume that their ad placements within walled gardens won’t be compromised. The challenge of determining what is and isn’t valid content continues.

In the past few months, several major brands have conceded that, unbeknownst to them, their ads have appeared on inappropriate sites. They learned of these placements not from their programmatic partners, but from discontented customers, which is a marketer’s worst nightmare.

This is not a situation that can be changed overnight. It’s a challenge that marketers must lay down to themselves and their programmatic partners in order to protect the brand equity they have so thoughtfully built over time.

Read this report (client access only) to learn more about how to protect your brands from the wrong context, and let us know what you think. Fake News: More Proof That Advertisers Must Choose Quality Over Quantity

Marketers Take Note: Working With Publishers Produced Better Results

Jeff Bezos is a legendary innovator whose company, Amazon, is driving business transformation across industries. Clearly he’s not shy about challenging the status quo. In 2013 he invested a portion of his personal fortune in The Washington Post, a publisher of repute since 1877.

Though many feared he would interfere with the content, he hasn’t out of respect for the trained and talented Post editors and writers, as he explained recently, “This is a highly professionalized activity… We have people who have decades of experience doing it.”

One of the great innovators of our era respects experience and the quality content that experience produces. Why don’t marketers, who are professionals in their own right, extend the same respect to publishers? They used to. Back in the day, marketers and publishers worked together, and business for both was good.

The same can’t be said today. Now, marketers have become convinced that they must ignore their own history, experience, and skills, and, instead, pursue automation, scramble for scale, and buy inventory blindly on random sites without regard for context or quality. 

That strategy is not working out very well, according to Bob Liodice, president and chief executive officer of the Association of National Advertisers.  On October 19th he opened the association’s Masters of Marketing Conference by observing that marketers have lost control of their industry, which he characterized as “unproductive, unsustainable, and undesirable.”

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Salesforce Closes their Marketing Cloud Gap with Krux

Posted in collaboration with Richard Joyce and Joe Stanhope, with Melissa Parrish.

 

With 150,000 customers, Salesforce, one of the world’s largest providers of customer relationship management (CRM) technology, is a trusted steward of its clients’ first-party customer and sales data. In acquiring Krux, a data management platform that ranked as a Leader in Forrester’s November 2015 Data Management Platform Wave, Salesforce supplements its capabilities with more substantial analytics, artificial intelligence tools, marketing data, and digital audience capabilities and positions itself as a significant competitor to other marketing cloud vendors like Oracle and Adobe. This is a smart acquisition for Salesforce, as Krux is a well regarded vendor in the DMP space, and it fills in a increasingly obvious hole in their Marketing Cloud offering.

The Krux buy, came in at a reported cost of $700 million, according to the Wall Street Journal.just about double the cost to Oracle of BlueKai 18 months ago. The DMP aggregates, normalizes, segments, and syndicates data for approximately 200 marketers and publishers, making 1st, 2nd, and 3rd party data available for marketing and advertising .

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What Does Acxiom's $310M LiveRamp Bid Mean For Marketers

On May 14, Acxiom announced its intention to acquire LiveRamp, a "data onboarding service," to the tune of $310 million in cash. Several Forrester analysts (Fatemeh Khatibloo, Tina Moffett, Sri Sridharan, and I) cover these two firms, and what follows is our collective thinking on the impending acquisition after having been briefed by Acxiom's leadership on the matter.

  • The acquisition sets Acxiom up to displace traditional MSPs. LiveRamp has built integration relationships with four of the biggest managed service providers (MSPs): Epsilon, Equifax, Experian, and Merkle. Acxiom is claiming agnosticism, and it has told us that it is "open to many ways of proving neutrality, including contractual commitments, [and] third-party audits." The firm considers the acquisition "an evolution of Acxiom’s Audience Operating System (AOS), which was launched to connect the ecosystem of marketers, technology, and media more tightly together and make every part of that ecosystem work better." But when we project out a few years, we have a hard time seeing how marketers will justify a standalone customer relationship management (CRM) database when they could, for example, port their POS and order management system (OMS) data directly into AOS and use that as their "customer marketing platform-as-a-service."
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Oracle Buys BlueKai To Add Data Capabilities To Its Stack

On February 24, Oracle announced it was buying data management platform BlueKai for an estimated $350 million, to add to its enterprise marketing suite.

This acquisition is the latest in a string of big-ticket purchases that Oracle has made recently to further flesh out its marketing offerings. In 2012, it acquired Eloqua, a marketing automation firm, and in 2013, Oracle bought cross-channel marketer Responsys. There have been smaller acquisitions along the way, too. The combination is meant to position Oracle as a serious competitor to established enterprise-level marketers, specifically, salesforce.com and Adobe.

I think that marketers should take notice of this latest move by Oracle and ask themselves a few questions about it. More specifically:

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The Viewability Standard Will Shake Up The Display Ads Industry, But Ultimately Benefit Publishers

Since the day the very first banner ad appeared nineteen years ago, advertisers and publishers have defined a served impression in a multiplicity of ways.  Today, advertisers have little confidence that what they are buying is what they are getting, a factor that is contributing to the downward pressure on CPMs for display ads.

The Viewability initiative, slated to take effect formally in 2014, is the industry’s first step toward remedying the uncertainty about actual served impressions.  It establishes a base line definition of what a viewable impression is and basic rules of engagement for the display ad industry, both of which I think are critical to its long-term viability. 

It seems to me that agreement and implementation of a viewability standard starts the industry down the path of greater appreciation for content, context and the important work that publishers do. This is why I chose it as the topic for my first report:  “Viewability Brings Transparency To The Display Ads Market.” In it, I examine the current state of affairs in the digital display market, review what publishers and marketers have to gain, and examine the costs involved in preparing for and executing on viewability.

A few findings from the report are particularly relevant for publishers:

  • Viewability will be table stakes by 2014. The host of technical obstacles will be overcome and a sufficient selection of measurement vendors will be accredited to allow for choice of partners
  • Accommodating the new standard offers publishers the opportunity to re-think site structures in order to optimize performance for both their constituencies – advertisers and consumers
  • New packaging and pricing options will emerge
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Off To A New Start . . .

After 20-plus years of working in publishing for brands as diverse as Inc., Fortune Small Business, Money, Martha Stewart Living, and the mother of them all, People, I recently joined Forrester as a senior analyst serving Marketing Leadership Professionals, covering monetization strategies and technologies for publishers.

Understanding publishers and how they thrive as organizations and businesses is my passion. I believe in the value of the content they create and the audiences they amass around that content. I also believe that without publishers and the content that is posted, discussed, and shared, social would be a pretty boring experience. There wouldn't be much to search if not for publishers and their content. And, if user-generated content was the only environment for digital advertising, there wouldn't be many ads bought.

But today, despite their crucial role in the communication and marketing ecosystem, publishers are struggling to stabilize their business model. Since the advent of ad tech, they’ve been struggling to keep a grasp on their businesses, searching for ways to stem the precipitous fall in CPMs, and sifting through literally hundreds of vendors that are eager to offer their services as a partner.

In the coming months, I will focus my research efforts on initiatives that can change the game for publishers. My first three areas of concentration are:

  • Viewability, the upcoming implementation of an industrywide standard against which ads will be paid for based on a real opportunity for ads to be seen by users. This is the basis of my first report, which I expect to publish in the second half of May. I will share the key findings with you in my next post.
  • Audience extension, or how publishers find look-alike audiences to extend reach for their best advertisers. This report will follow.
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