DEFINING THE MARKETING CLOUDEmily Riley, COO Ghostery

April 8, 2014

HEADQUARTERS10 East 39th St-8th Floor New York, NY 10016 | 917.262.2530 | ghosteryenterprise.com

DEFINING THE MARKETING CLOUDEmily Riley, COO Ghostery

You no longer have a website, you have a marketing cloud.

In 2004 you had a website. In 2014, you have a marketing cloud. You interact with your customers across various channels and device types, and rely on hundreds of vendor partners to do so. If you are like most enterprises, your marketing cloud is sub-optimally controlled. A poorly controlled cloud can cause you to send customers to competitors, dilute your customer data value, open security breaches, and slow down your site. Good cloud management ensures that you keep and grow your customer base, secure data, and improve site performance.

In this research series, we will be defining the marketing cloud and providing benchmark data and best practices for marketing cloud management. This is part one of the three part series.

Defining the Marketing Cloud

Benchmarking Your Marketing Cloud

Marketing Cloud Management: Best Practices

THE RISE OF DIVERSE ONLINE EXPERIENCESIf you worked for Delta in 2004, you had a website. That was the extent of your online pres-ence. The idea that consumers could go to one place to interact with your brand, review prod-ucts and perhaps even purchase them online was a dramatic shift from even two or three years earlier, when websites were purely informational pages often designed to resemble print pamphlets. (See Image 1)

2

© 2014, Ghostery, Inc. April 8, 2014

Ten years later, Delta.com no longer just has a website. Delta.com has a website for PCs, web-sites for mobile and tablet devices, mobile apps, a YouTube channel, Facebook page, LinkedIn page, and more. And in all likelihood, so do you. In 2014, a Fortune 500 brand must deliver expe-riences for customers who interact with their brand in hundreds or thousands of locations and configurations. (See image 2)

Not only does an enterprise like Delta have more complicated platforms for reaching its custom-ers but also a more complex website. This trend also extends to Commerce Service Providers (CSP) as the level of investment in improving multi-touchpoint commerce features, order man-agement, and flexibility increases with the growth of online and mobile channels. Leading com-mercial sites average 8 user-interaction tools alone per domain, including social buttons, com-ment forms, custom search capabilities, content rating tools, and more. Each of these can bring its own set of third party vendors to a website, further convoluting the vendor chains.(See image 3)

Image 1 Image 2

Image 3

3

© 2014, Ghostery, Inc. April 8, 2014

geo-location or category filters. There are thousands of vendors from Google to eXelate to help enterprises create the experiences that their customers crave. We call this collection of technology companies “The Marketing Cloud.” We define the Marketing Cloud as follows:

The Marketing Cloud is the complete set of digital technology vendors who power enterprise presences online.Ghostery currently recognizes 1,925 companies in the total marketing cloud in the US and Europe. This number has grown from 600 in 2011, an average of 330 new technologies added to the cloud each year. The 2004 cloud started with vendors clustered in a few categories including content management and website analytics. The marketing cloud grows with each new digital innovation. For every big innovation, like Facebook or What’s App, hundreds of technology companies pop up to provide services to enterprises looking to participate in the newest online opportunity.Today, the companies in the marketing cloud play several different roles on a page. The tools they provide can be grouped into:

Advertising• The end goal of much of the marketing cloud is to deliver the most effective advertisement – so

many of the marketing tags encountered on webpages are to actually facilitate ad delivery.

Data segmentation and targeting• In order to assess a consumer’s interests and intent, information on that user is collected any-

where there may be relevant content. This includes maintaining records of marketing efforts that have already targeted a given user. Tools used to collect and maintain these records make up the largest share of the marketing cloud.

THE MARKETING CLOUD POWERS ONLINE CUSTOMER EXPERIENCES.Consumers have high expectations for companies online. When a newly released mobile phone contains never-before-seen functionality, such as integrated geo-location, or an eCommerce site implements a new commerce platform, customers expect that functionality to work seamlessly. However, for an enterprise, integrating geo-location capabilities into a mobile application is anything but seamless. For enterprises like Delta.com or Amazon.com, there are entire teams dedicated to determining if and how to add to their online customer experiences with features like

4

© 2014, Ghostery, Inc. April 8, 2014

Data sharing • Many data collectors work in concert to cast wider nets across the web without needing

ubiquitous presence on every site or creating performance issues for individual browsers. Data sharing, commonly called cookie syncing, is a growing practice.

Social media• As previously discussed, encouraging users to speak on behalf of a brand or to share content with

their networks is an important goal of every marketing cloud.

Tag management• In order to better optimize and monitor their marketing cloud, many brands are turning to

technological solutions built specifically to manage the other tools in play.

Analytics• Understanding the makeup of a site’s audience, common interactions throughout the domain, and

a site’s pattern of performance still make up a significant portion of the typical marketing cloud. (See image 4)

Image 4

5

© 2014, Ghostery, Inc. April 8, 2014

While “the marketing cloud” has thousands of vendors, the leading commercial sites have on average over 70 vendors in their own marketing cloud. Comparing the marketing clouds of airline sites, for example, illustrates the typical variation seen in enterprise marketing clouds. (See image 5)

A comparison of marketing cloud size to US market share among leading airlines draws some interesting parallels but also shows the difference in cloud size. There exists a 55% swing in distinct vendors between Delta and US Airways. (See image 6)

Larger marketing clouds are often also more complex. In these maps of vendor tags on Del-ta.com and JetBlue.com, nodes illustrate the site, its partners, and partners of those part-ners; lines between those nodes represent the relationships between those partners. Delta’s digital strategy involves an interconnected set of relationships among its advertising, analyt-ics, and site management partners. Jet Blue, in contrast, works with far fewer partners, and leans toward directly managed relationships with those vendors.

WHAT YOUR MARKETING CLOUD LOOKS LIKE

Image 5

Image 6

6

© 2014, Ghostery, Inc. April 8, 2014

Source: Ghostery Competitive Intelligence data, week of 03-16-2014

THE RACE FOR SHARE OF MARKETING CLOUD (SOMC)Enterprise technology companies such as Adobe, Google and IBM are keenly aware of the enterprise’s reliance on the small technology vendors that make up their individual marketing clouds. These organizations and others such as Oracle, SAP, and Acxiom have been strategically acquiring vendors for years as they attempt to build a consolidated “marketing stack.” While they are locked in a battle for “share of marketing cloud” (SOMC), there is no clear winner, nor does any one company have the majority SOMC for any large enterprise. (See image 7)

The above image shows that several of the big technology companies have more than one vendor working with delta.com. However, none of these companies has more than a 5-10% share of Delta’s marketing cloud, which is typical amongst Fortune 500 enterprises.

While a small website might use mostly Google tools, large enterprises are too complex and require too many specialized bits of functionality to work exclusively with any one company. Ghostery predicts that this will not change in the future. Despite the growing number of acquisitions by Adobe or IBM, the rising competition for innovation will always outpace them. This leaves individual enterprises forced to work with many small vendors for the foreseeable future. (See image 8)

Image 7

Image 8

7

© 2014, Ghostery, Inc. April 8, 2014

A map of the vendor tags on www.crateandbarrel.com,from the week of 03-16-2014

YOUR MARKETING CLOUD IS OUT OF CONTROL Most enterprises are not fully aware of the vendors in their marketing cloud and certainly do not manage those vendors through a centralized process. In most cases, an enterprise’s marketing cloud develops through a wide network of individuals, departments, and agencies who have access to the website across marketing, IT, ecommerce, analytics and operations.

In most cases, the few individuals who are directly responsible for the performance of the website, such as the website operations team or ecommerce team, are surprised and frightened the first time they get a glimpse of their own marketing cloud. A common phrase we hear is “How did all of these companies get access to my website?” Typically the answers are as follows: (See image 9)

• Lack of central control. The website owner no longer manages the website, let alone the marketing cloud. As a result, enterprises do not have an approval process for marketing cloud vendors. Many people inside and outside the company have direct access to the cloud and can add new vendor relationships at will, including the media team, ad agencies, the data and analytics team, the IT team.

• Measuring benefits without the costs. As marketers and their agencies evaluate new adver-tising opportunities, they often weigh the benefits without considering the risks. However, the risk of something like data leakage to competitors could be greater than the benefits of retargeting.

• Daisy-chain or piggyback vendors. Even for enterprises to vet and manage direct vendor relationships effectively without proper tools, it is impossible to manage the vendors who gain access to their website or data through a third party. For example, an ad server or ad network that works directly with the enterprise could bring in its own data vendors that could be taking data from the enterprise without its knowledge.

• Tag managers. Tag managers can be a great way to allow advertisers to set up new functionality and new campaigns quickly as well as collect data efficiently. Without proper management, the marketing cloud can get out of control quickly.

Image 9

8

© 2014, Ghostery, Inc. April 8, 2014

THE COST OF NO CONTROLAs digital behavior grows and deepens, enterprises are tasked with creating customer databases, growing online ecommerce capabilities and improving customer experiences. All of these goals are compromised by poor marketing cloud management. Without control, enterprises are ex-posed to gaping risks, such as:

Customer data leaked to competitors. Without the right management in place, vendors take data from consumer web behavior on your site, package it up and sell it directly to your competitors. One leading retailer audited the data vendors in their marketing cloud against their three main competitors’ clouds and found a 72% overlap.

Diluted data assets. Enterprises are using DMPs and tag managers to house first-party data and create what they think is a unique customer database. However, without marketing cloud management, any access to this data by third-party vendors immediately negates the value of the asset as the data is released to the market in the form of generic third party segments.

Website latency. In a study undertaken by Walmart that compared page load times to the likelihood of purchase, it found that a one second delay caused a 7% drop in conversions. Additional research indicates that adding a single marketing tag to a site increases the page latency on average by 9%. A strong marketing cloud management strategy is essential to understanding the trade-off between load time and revenue.

Website security breaches. Unencrypted calls to vendors on secure pages put your enterprise at risk. If malicious parties compromise this vendor code, the site itself is compromised. These transgressors can then do anything from page scraping to compromising sensitive data on login or checkout pages. To maintain information security, it is critical to monitor the protocol of calls made by vendors on secure pages.

Management inefficiency. Without visibility, ownership and active management, any problem that arises within a marketing cloud vendor triggers a search for a needle in a haystack. Regardless if an issue is spotted or not, without useful reporting, even if a problem is spotted problems can escalate into a game of “he said, she said.”

9

© 2014, Ghostery, Inc. April 8, 2014

MARKETING CLOUD MANAGEMENT: DON’T LET YOUR MARKETING CLOUD MANAGE YOUAs the marketing cloud grows, enterprises must create a strategy for marketing cloud management. As one systems architect commented, “If I was this clueless about the vendors who had access to my data center, I’d already be fired.” Your online marketing cloud creates just as much risk and can drive just as much revenue as any vendor in your ERP stack or otherwise. Think about it, without controlling your marketing cloud, your biggest competitors could be buying your customer data right out from under you every second of every day. Your conversion rates are affected by vendor latency, and your vendors open your site up to security breaches that you are completely unaware of. As such, it is important to implement approval, monitoring, and reporting process that not only mitigate the risk but optimize your business goals. Your cloud powers your online customer experiences and drives your online business. Make sure your marketing cloud is working for you.