What are the biggest opportunities & challenges in marketing tech for the next 12-24 months?
It’s an exciting, yet hyper-competitive time to be in the marketing tech space. Innovation is at its peak and M&A activity is setting records. In just the past few months, we’ve witnessed some major enterprise deals, including Marketo’s acquisition by Vista Equity, Verizon taking out Yahoo and Microsoft grabbing LinkedIn. These players are working swiftly to build portfolios of marketing technology products—their marketing tech stack—that will ultimately become comprehensive end-to-end solutions for brands. We can expect the frequency of these types deals to increase over the next year, with an increased specific focus on the local marketing space, which is a $70 billion market that few large providers even understand well.
In the first half of the 2016, we did see acquisitions of several local digital marketing solutions by Web.com and Gannett Publishing. These deals suggest that enterprises have begun to set their sights on marketing’s last mile by acquiring technologies that can help them address and optimize the massive local marketing opportunity.
Many marketers have been operating on the assumption that software can solve it all, resulting in a meteoric rise in programmatic ad buying this year. But marketers should beware; AI hasn’t yet evolved to where it can fully replace all the human judgment in marketing. While brands do need smart software to help execute digital marketing, technology must leverage smart strategy, execution and optimization led by marketing and technology professionals who understand the rapidly evolving marketing tech landscape. This is the only way to get the most “bang for your buck” in today’s dynamic environment.
What keeps your clients up at night?
The challenges and complications that come with executing cooperative marketing programs (co-op and MDF) are major pain points for our brand clients – and the complexity has actually grown with the advent of so many dynamic and different digital marketing channels. Considering that U.S. brands earmark $36 billion each year to co-op marketing programs, but then see $14 billion of it go to waste, is bewildering and frustrating. One of the contributing sources to this systemic problem is communication. Having different values and goals can cause friction between brands and their local partner networks, ultimately preventing them from working together effectively. Many brands have yet to evolve their co-op programs for the digital age, yet their retail partners are pushing hard into new digital channels.
Co-op programs are often complex and littered with red tape, especially when it comes to approval and reimbursement. This creates significant barriers to adoption and execution at the local level. That’s why brands need a technology partner to help them successfully implement localized digital marketing capabilities at scale, provide turnkey brand compliance all the way through thousands of varied local campaigns and ultimately drive retail partner adoption.
What’s the hardest thing to educate clients about?
Many clients are still having a hard time fully understanding the problem with the convergence of the online path to purchase and associated offline transactions. With over 90% of retail spending still occurring in local, offline settings, and nine out of 10 consumers saying their purchase is influenced by online activities, this “click-to-brick” customer journey is something that brands need to be in the middle of in order to stay ahead of the local competition. Powered by an array of tools and solutions, brands today have the opportunity to transform their local partner network into a powerful sales channel. In doing so, brands need to let go of the traditional local marketing mix they have been using for decades and begin implementing, for example, digital video and mobile consumer strategies.
In part, the reluctance to dive into digital stems from complacency and internal challenges. Time and resources are the leading factors in digital falling behind content and traditional marketing. It can also be difficult to convince decision makers within the company that investing in things like social media advertising or stronger tech-driven approval workflows will drive stronger ROI. The marketing environment is quickly changing and many brand marketers today lack the knowledge and access to the appropriate tools to ensure their strategy is ahead of the curve.
What are some of the unmet needs in the marketing technology landscape?
From a broad industry perspective, with more than 4,000 marketing tech companies competing for brands’ attention and dollars, we’re seeing too many providers offering a feature, but not necessarily the whole, end-to-end solution. Imagine having a set of meaningful puzzle pieces, but not knowing how to fit those pieces fit together and trying to get six different providers to cooperate with you to assemble it. As brands are increasingly strapped for time, resources and tools, the need to solve the whole puzzle efficiently has never been greater. So, rather than “unmet needs,” one could make the argument that some of the perceived needs are being “over met” with point solutions, while the biggest need is actually a solution for the entire puzzle that these brands need to solve.
As it relates to brand-to-local marketing, retailers also need support. We’ve recently seen giants like Google and Facebook launch geo-based strategies to help marketers capture the attention – and hopefully the sale – of a local buyer. With more than 92 percent of sales occurring in physical brick-and-mortar stores in Q1 2016, one of the most significant monetary opportunities for brands to seize is local, which can be achieved if marketers understand how to better target customers through their local retail networks.
What performance marketing trends do you anticipate in the next year?
Brands will get closer to having the tools to more effectively measure how their local partners’ digital marketing campaigns are performing and, most importantly, how they’re stacking up against each other and in various regions. This sort of benchmarking and competitive insights data can only be derived from very large data sets with inputs from an array of activities across the marketing tech universe.
It’s becoming important for brands to have this data in order to communicate with partners on how they’re performing (i.e. are they in the 90th percentile or 40th percentile?). This helps brands identify areas of weakness, better aim their investments with partners and strengthen the partnership for future success.
As we think about these insights and benchmarks, they’re almost embedded in the byproduct of the marketing we do every day. It’s like the sawdust from the sawmill, except this sawdust (i.e. data) is incredibly valuable and can provide actionable insight that will drive optimal marketing performance across a network of related partners.
Ultimately, having an easy, roll-up view of where the problems and opportunities lie within a partner network will pave the path for more efficient and strategic co-op marketing programs.
–Brendan Morrissey is CEO of Netsertive
