Is it the best of times? Or the worst of times? Are ad tech and performance marketing companies crushing it? Or are the on the edge of a precipice? There are people arguing all sides of the question and an ocean of data to support any viewpoint.
Last week, I had the chance to lead a discussion on the state of performance marketing at the Luma Partners Digital Marketing Summit in Menlo Park. This conversation was doubly interesting (at least to me) because I had had the opportunity to lead similar discussions at other Luma events. As a result, there is a bit of trending to the conversations.
Terry Kawaja and the Luma team resist even using the word panel. Their premise, with which I fully concur, is that at an event with a small room full of CEOs and investors, the distinction between the guys on the stools up front and in the chairs around the room is artificial at best. Everyone in the room (pretty much) has something to contribute. As a result, the conversations tend to be more free flowing.
The people in the chairs were CEOs on technology companies including Sojern, HookLogic, AdRoll, and LiftOff. All very smart guys with great insights. I also asked my friend, Gabe Dalporto, CFO of Lending Tree to join the conversation. Prior to becoming the CFO of TREE (where I am on the board), he was our CMO and is one the best performance marketing guys I know. I thought that the balance of seller and buyer perspective would be productive, and it was. In retrospect, I wish that I also had someone from one of the big SaaS platforms along for the ride.
Here are some of the core themes that we explored:
Platforms aren’t taking over the world yet.
When we first talked about the rise of the marketing clouds two years ago, there was an expectation that by now they would be taking over the world. The value proposition seemed compelling, a comprehensive view of the customer and tight linkage between corporate strategy and result and the marketing tactics that achieve them. The sense of the group though was that we aren’t there yet, and aren’t close. In spite of the fact that the big SaaS players (Oracle, SalesForce, Adobe) have spent billions of dollars acquiring very good companies, the belief was that a collection of best of breed point solutions still outperforms the all-in-one offerings of the big platforms. It was no surprise that the CEOs of point solution companies had this perspective but it was compelling that Gabe also felt this way. He said clearly that it was worth the extra effort to integrate 16 best of breed point solutions. Although his life would be easier if the marketing clouds performed as well, he said that right now he’d be sacrificing performance that we need.
Last click attribution is still the norm
We all cringe. We all admit its flaws. We all hope for something better. But, at the end of the day, we still live in a world of last click attribution.
By “last click attribution”, I mean that whatever ad or link the consumer clicks on to purchase something gets all of the credit for the sale. If, for instance, the consumer researches a new Camry on Edmunds, MotorTrend, KBB and the Toyota site, but then clicks on a retargeted ad in their Yahoo mail, the retargeter gets all of credit and the other sites none.
Everyone knows that this oversimplifies the process and underweights the contribution of all of the other sources. But, in the absence of a better solution, last click attribution is still the norm. As a result, we will continue to overinvest in search and retargeting and underinvest in brand.
Although it isn’t fully measurable, Gabe Dalporto talked about the uplift on digital marketing in tests where online ads are supported by television.
Every company is a “big data” company
It’s almost getting boring to hear, but the refrain that “we’re a data company” is going strong. One of the most compelling cases that we discussed was Sojern. Mark Rabe, the CEO of Sojern, talked about their transformation from just selling ads on boarding passes to collecting valuable and predictive data about the purchase intentions of travelers. Because people print boarding passes (when people printed boarding passes) at the last minute, the ad inventory was of limited value. Because they now have quality data, their information is much more valuable.
Discussion of the Sojern transformation led to an interesting conversation about what signal versus noise. Increasingly, companies are inundated with data. The art form is figuring out how to make sense of that data. There was another discussion about how artificial intelligence would impact marketing that was fascinating.
Core takeaway: as we sort through more and more data, the winning competitors will be the ones that apply Ai to the process first and best.
We are closer to linking online and offline marketing
Jonathan Opdyke of HookLogic was taking a bit of a victory lap. As he sat on our panel, news was breaking that his company had been acquired by Criteo, the retargeting leader.
When I asked what catalyzed the deal, he spoke of HookLogic’s ability to promote to shoppers at the point of retail and to align the interests of retailers and brands. Although there are obviously points of contention, the looming threat of Amazon was bringing together previously strange bedfellows.
I believe that there’s a broader lesson in HookLogic’s success. While much of digital marketing, even performance marketing, is ephemeral and intellectual, the more marketers hear cash registers ringing, the easier it is for them to invest aggressively.
And we’ll be back…
This conversation is a work in progress. To me, it’s fascinating but unresolved. Whether in the context of another Luma Partners event or over a beer in the evening, this is one of the most interesting conversations in marketing right now.