the future of marketing and advertising technology

7/24/2019 The Future of Marketing and Advertising Technology

1/13

April2015,IDC#255781

WHITE PAPER

Cloud Platforms: The Future of Marketing and Advertising

TechnologySponsoredby:MarinSoftware

GerryMurrayApril2015

IDC OPINION

Themarketformarketingandadvertisingtechnologyhasseenagreatdealofinnovationoverthepast

10yearssomuchsothatitnowboastswellover1,000vendors,whichIDChasorganizedintomore

than75categories.IDCbelievesthisstructureisunsustainable,andoverthenextthreeyears,the

forcesofconsolidationwillexertfundamentalchangesinhowenterprisesprovisionmarketingandadvertisinginfrastructureandfromwhomtheyprovisionit.Theresultwillbenefitbrands,vendors,and

customers.Findingsinclude:

Unsustainable complexity:Themarketformarketingandadvertisingtechnologyhasbeenininnovationmode.Pointsolutionshavecometomarketindependentlyandasynchronously,forcingbuyersintoreactionarypurchasebehaviors.Along-termplanhassimplynotbeenpossible.Asaresult,CMOshavehadtooptimizefragmentedmarketinginfrastructuresandmanageincreasinglyspecializedstaffmemberswhostruggletounderstandhowtheiractivitiesinfluencethoseoftheirpeers.

From managed services to software as a service SaaS):Brandshaverejectedtheagencyblack-boxmodeltodigitaladmanagement.Thereiswidespreadfrustrationamongbrandsnot

onlyaboutfeesandmarginsbutalsomorefundamentallyaboutbeingabletoapplybusinessacumentoadperformanceinrealtime.Digitaladvertising,ingeneral,andsearch,inparticular,representanincreasinglysignificantspendandrequirereal-timemanagement.SaaSsolutionsmakethein-houseapproachbothfeasibleandcosteffective.

Pervasive programmatic advertising:Adnetworksaretoocomplexandbuyerbehavioristoodynamictoservewithoutautomatedadplacementforlargeandevenmidsizecompanies.Optimizingreach,acquisitioncost,andpersonalizedcreativityacrosschannelsatscalerequiresmassivedatasets,algorithmicbiddingmodels,andreal-timevisibilitynoneofwhichcanbeachievedwithoutanautomatedsolution.

Competing on data:Usingadvertisingandmarketingtechnologytodrivecustomerexpectationsbeyondtheabilityofcompetitorstodeliverisbecominganewsourceofcompetitiveadvantage.Brandswiththeabilitytoaggregatemultiplefirst-,second-,andthird-

partydataacrosstheiradvertisingandmarketingoperationswillbethewinners.

ThekeydriverforthetransitiontocloudsisthevaluedeliveredtoCMOs.Theywillbeabletodeploy

consistentsolutionsonaglobalbasis,getbetterreportingfrominternalandexternalcampaign

investments,andmanagemarketingbasedonperformance.


2/13

2015IDC #255781 2

METHODOLOGY

ThisdocumentisbasedontheextensivemarketresearchthatIDChasconductedonthedevelopment

andadoptionofmarketingtechnologyaswellasinterviewswithfiveMarinSoftwarecustomers.IDC

hasalsoconductedextensiveresearchonhowenterprisesaredeployingmarketingandadvertising

technologyandhaspublishedanumberofframeworksandforecasts,whicharereferenced

throughoutthispaperandlistedintheRelatedResearchsection.

IN THIS WHITE PAPER

ThisWhitePaperpresentsIDC'sviewofhowkeytechnologytrendswillshapethefutureofthe

marketingandadvertisingtechnologymarket.TheanalysisisbasedonIDC's2015Strategic

FrameworkforMarketingTechnology,whichorganizesmorethan75categoriesofmarketingand

advertisingtechnologyintofourbroadcategories:interactionmanagement,contentproductionand

management,dataandanalytics,andmarketingmanagementandadministration.Thisframeworkis

thebasisforIDC'sworldwidemarketsizeandforecastformarketingtechnology,whichisexpectedto

reachmorethan$32billionin2018.IDCbelievesthiswillbeahighlydiversemarketwithmany

optionsavailabletobuyers,specificallybecausebothbest-of-breedandplatformstrategieswillbeneededtoserveavarietyofbuyeracquisitionstrategies.However,cloudplatformswillbecome

increasinglyattractivetomainstreambuyersthatlacktheresourcesofearlyadopterstoownand

operatetheconstellationoftechnologiesneededtorunmodernenterprisemarketingorganizations.

SITUATION OVERVIEW

Connected Customers Require Connected Marketers

Fundamentaltothegrandtransformationhappeningineverymarketingdepartmentonearthisthe

digitallyconnectedcustomer.Customersareconnectedtoinformation,eachother,andamyriadof

othersourcesinwaystheyneverwerebeforesmartphonesbecameubiquitous.Inadditiontothe

profoundpowershiftfrombrandstocustomersthatthishasenabled,thedigitalworldalsointroducedamind-bogglingnumberofnewmedia,devices,andmodesofinfluencesomeofwhichare

consumersthemselves.Asaresult,buyerbehaviorismorecomplexthanever.Itisnolongera

reliablelinearmodel;rather,itisnowaworldofalmostinfinitepermutations.Creatingaconsistent

buyerexperience,servingcustomersateachstepoftheirjourney,andtrackingeverycustomertouch

pointrequirehighlysophisticatedreal-timecommunicationandcoordinationofmarketers,systems,

content,data,processes,andreporting.Brandsarerealizingthataccomplishingallthisdependson

outstandingperformancenotonlywithinmediachannels(e.g.,searchads,social,mobile,Website,

andin-store)butalsoacrossmediachannels.Itrequiresaninfrastructurethatprovidesthefollowing:

Well-governeddata,datamanagement,andanalyticalcapabilitiesbasedondeepintegrationwithfirst-partycustomerandrevenueconversiondata

Advanced,real-time,andalgorithmicoptimizationtechniques

Transparentreal-timereporting

Deliveryofpersonalizedcontent

Fragmentedinfrastructure


3/13

2015IDC #255781 3

Unfortunately,aunifiedinfrastructurehasbeenhardtoachieve.Themarketingandadvertising

technologymarketisunsustainablyfragmented.Somanydifferentsolutionsareavailablethatitisvery

difficultforCMOs,chiefdigitalofficers(CDOs),andCIOstoachieveaholisticviewofwhattheyhave,

whattheyneed,andwhy.Someofthisisduetothesheernumberofsolutionsneeded,butitismore

dauntinginlargecompanieswithautonomousbusinessunitsandsiloedbudgetsthatlacka

governancefunctiontooverseetheselectionandspecificationofvariousmarketingandadvertising

systems.Inthelongrun,allcomponentsmustworktogetherbecausecustomerexperiencetranscendsinternaldistinctionsbetweenlinesofbusinessasmuchasitdoesmediachannels.Toprovidea

holisticview,IDCbreaksthemarketingandadvertisingtechnologymarketintofourbroadcategories

thataremadeupofmanysubcategoriesasfollows:

Interaction systems: Theprimaryfunctionofthesesolutionsistocommunicatetoand/orwiththemarketandconductthedigitaldialog.Theyincludethefollowingsubcategories:

Advertising:SolutionstomanageandoptimizeWeb,mobile,andofflineads,includingdisplay,social,search,andvideo

Digital commerce:Solutionssuchasecommerceplatforms,merchandising,mobilepointofsale,catalogs,real-timeoffers,location-basedtargeting,andsocialcommerce

Direct marketing:Solutionssuchasmarketingautomation,contentmarketing,emailmarketing,telemarketing,directmail,customercommunicationsmanagement(CCM),SMS/textmarketing,andmobileappdevelopment

Web site:SolutionssuchasWebcontentmanagement,mobileWeb,searchengineoptimization(SEO),video,chat,sociallog-ins,communities,portals,search,recommendationengines,tagmanagement,andpersonalization

Social monitoring and publishing: Solutionsforidentifyingandinteractingwithcommunities,influencers,competitors,partners,prospects,andcustomersonawidearrayoftrendingtopicsandsocialchannels

Other:Solutionssuchassocialmonitoringandpublishing,AR/PR,onlineandofflineevents,loyalty/gamification,salesenablement,andpartnerrelationshipmanagement(PRM)

Content production and management: Theprimaryfunctionofthesesolutionsistofacilitatetheproductionandmanagementofmarketingcontent.Theyincludeauthoringandpublishingtools(suchastext,image,audio,andvideo),contentmanagementsystems(CMSs),digitalassetmanagement(DAM),documentmanagement,contentanalytics,andinternalportals.

Data and analytics: Theprimaryfunctionofthesesolutionsistostoreandproduceinsightsfromcustomer,operational,andfinancialdata.Thetechnologiesinthiscategoryaredatabases,datawarehouses,anddatamanagementplatformsaswellasenterprise-classanalyticssolutionsoverandabovetheanalyticsembeddedinnearlyeveryinteractiontechnology.Thesesolutionscanaggregateandanalyzedatafrommultipleinternalandexternalsourcestosupplynewinsightsformarketers.

Management and administration: Theprimaryfunctionofthesesolutionsistoprovidetheinternalcommunications,workflows,budgeting,andexpensetrackinginfrastructuresthat

CMOsneedtomanagemarketingoperations.Theyincludemarketingresourcemanagement(MRM),collaboration,enterprisesocialnetworks,andprojectmanagement.


4/13

2015IDC #255781 4

Figure1showsamapofallthesolutionsinthefourbroadcategoriesthatcollectivelyencompassthe

marketingandadvertisingtechnologymarket.

FIGURE 1

IDC's 2015 Strategic Framework for Marketing Technology

Source:IDC,2015

Marketing and Advertising Cloud Consolidation

Theforcesofconsolidationareactivelyatworkinallareasofthismap,bothwithinandbetween

categories.Analyticsisseeingaconsolidationofsegmentation,predictive,social,Web,andevenmobile

dataintosingleofferings.Contentsearchandanalyticstoolsaresimilarlymerging.Managementand

administrationisseeingcloudcommunicationandcollaborationsolutionsgaintractionbymergingallof

thecollaborativeapplicationcapabilities.Intheinteractionarena,Webcontentmanagementsystems

nowfulfillmanyoftheWebsitemanagementrequirements.eCommerceplatformswillbeagravitational

forceinpullingallofthedigitalcommerceboxestogether.Figure2showsthediversechannelsaroundwhichadvertisingtechnologypointsolutionshaveemerged,butplatformsarealreadystartingto

consolidatesearch,social,anddisplayonWebandmobile.

Moni-toring

Pub-lishing

Web Content

Mgmt (WCM)Mobile Web SEO

ChatSocial Log-in/

SharingCommunity

Mgmt

OnlineVideo

Platforms

CustomerPortals

SiteSearch

ContentMktg

Platforms

Recom-mendation

Engines

Tag

Mgmt

Personal-

ization

IntegratedMktg

Mgmt/Mktg Auto

Mobile

AppsEmailMktg

Tele-marketing

Direct

Mail

SMS/

Text

Online

Onsite

AR/PR

Mgmt

Loyalty/

Gamifi-cation

Monitoring

Engaging

DigitalPublishing

Graphic &Web Design

A/V

AuthoringTools

Diagram-

ming

Office

AppsSurveys

Cat/

ClusterEngines

LanguageAnalysis

Q&AEngines

Digital Asset

Mgmt (DAM)

Doc MgmtMarket Intel

Mktg

Dataware-house

DataMgmt

WebAnalytics

Social

MediaAnalytics

PredictiveAnalytics

Reporting& BI

MRM

Budget/

Plan/Track

TeamCollaboration

Project Mgmt

Enterprise

SocialNetworks

EmailApps

Rich Media Search Text Analytics

Competitive Intel

Customer Intel

Social MktgOtherEventsDirect Mktg

Portals CMS

Content Search and Analytics

Authoring and PublishingWeb Site Mgmt

Retar-

getingOtherVideoSocialDisplaySearch

Web Ads

Ad BuyOptimization

OfflineAd Mgmt

Display Location Search

Retargeting Other

Mobile AdsOther Ads

Mktg Data MgmtAnalyticsMRMCollaborative Apps

Interaction Content

Data and AnalyticsMgmt and Admin

Clienteling Mobile POSMerchan-

dising

Social

Commerce

Real-TimeOffers

OnlineCatalogs

eCommerce

Platforms

Digital Commerce

DirectSales

Tools &Portals

PartnerRelation-

ship

Mgmt

Enblmnt

Advertising

CustomerComms

Mgmt


5/13

2015IDC #255781 5

FIGURE 2

Advertising Cloud Consolidation

Source:IDC,2015

Thebiggerissueisthecomingavailabilityofeverythingintheinteractionspaceasanintegrated

platform.Advertisingandmarketingcloudshavethepotentialtobreakdownthesiloswithinbrands

andagenciestoprovidebetter:

Cross-channelcampaigncoordination

Customerbehaviordata

Analyticsoninterchannelperformance

Returnonmarketing

Astheseofferingsmatureinthenextthreeyears,thebusinesscaseforoutsourcingmajorportionsofmarketinginfrastructureandserviceswillbecomeincreasinglyattractiveformanycompanies.

However,thetopglobaladagenciesdesperatelyneedboththetechnologyinfrastructureandthe

technicalexpertisetoruntheinfrastructure.Theywillbeheavilyreliantonthetechcommunityfor

digitalexecution,administration,andanalyticalexpertise.

Market Size and Forecast

Figure3forecastshowmuchorganizationsworldwidewillspendonsoftwaresolutionsformarketing.

Themarketwillgrowfromapproximately$20.2billionin2014tomorethan$32.3billionin2018.Itwill

beoneofthefastest-growingareasinhightechwithacompoundannualgrowthrate(CAGR)of

12.4%.Cumulatively,overthefiveyearsfrom2014to2018,organizationswillspendapproximately

$130billiononsoftwareformarketingdepartments.Themajorityofthisspendingwillbeintheareasof

interactionsystemsanddataandanalytics.

Advertising

CloudSearch

Social

Display

Online

VideoMobile

Offline

Digital

TV

Digital

Radio

Retargeting


6/13

2015IDC #255781 6

FIGURE 3

IDC's Marketing and Advertising Technology Market Forecast, 20142018

Source:IDC,2015

FUTURE OUTLOOK

Advertising Cloud Buyer Maturity

Marketingandadvertisingtechnologyareessentialtocompetinginthemoderndigital,mobile,social

marketplaceaswellasfortheaggregationandanalysisofofflinecustomeractivity.Itisamarketplace

ofbuyerswithlimitlessaccesstoinformationinwhichthelinearmodelofcustomeracquisitionhas

transformedintoadynamicofalmostinfinitevariations.Eachvariationrepresentsasinglecustomer's

journeyfromacquisitiontoadvocacyajourneyonwhichextraordinaryassistancefromsellersat

everystepisexpected.Thefollowingarethebasicrulesofengagementfacingthemodernmarketer

thatpresentahostofnewopportunities:

Marketersthatclearlyandquicklyseparateindividualpurchaseintentfromtheoverwhelmingnoiseinthemarketplacewillhaveahugeheadstartontheirrivals.

Companieswhosemarketerseffectivelyservethebuyeracrosspurchasestages,media

channels,devices,andreal-worldinteractionswillselltothebestcustomersthefastest. Marketersthatelevatebuyerexpectationswillmaketheircompetitorslookdatedandoutoftouch.

Capitalizingontheseopportunitiesrequiresaradicalnewapproachtomarketingonethatis

datadriven,creative,processoriented,responsive,hierarchical,andentrepreneurial.Leadership

requiresextensiveinvestmentinmarketingtechnologyandthedrivetorapidlymaturethe

infrastructureandtheorganization'sabilitytomakebestuseofit.Therequiredtechnologyisdiverse

andcomplex,somarketersmusthavearationalapproachtoacquiring,using,andintegratingsystems

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2014 2015 2016 2017 2018

($M)

Management and administration

Content production and management

Data and analytics systems

Interaction systems


7/13

2015IDC #255781 7

forinteraction,contentproductionandmanagement,dataandanalytics,andmarketingmanagement

andadministration.IDChasdevelopedthefollowingfive-stagemodelformarketerstoaccomplishthis:

Ad hoc: Retro-digital MarketingtechnologyislimitedtoemailandWebsite.

Opportunistic: MarketingautomationfallsshortDespiteitsname,marketingautomationaddressesonlyasmallpartoftheoverallmarketingtechnologyenvelope,primarilyintegrating

emailandWebmarketingwithcustomerrelationshipmanagement(CRM)systems. Repeatable:ProliferationofpointsolutionsInvestmentsareexpandedtoaddressburgeoningbut

separateneedsfornewareassuchasadvertising,mobile,content,dataandanalytics,budgeting,andresourceplanning.

Managed: MarketingplatformsPointsolutionsarefinallyknittogetherasaplatformviadataandprocessintegrationsthatencompassnotonlymarketingoperationsbutalsoadvertisingandreal-worldinteractions.Collaborativeworkflows,cross-channelcontrol,personalization,predictiveanalytics,andcontentmarketingcapabilitiesadvance.

Optimized: EnterpriseengagementAcomprehensivemarketingtechnologyplatformisintegratedwithothercustomer-facingenterprisesystems,supportedbyastandardizedcustomerdatagovernancestructure,andcoupledwithaculturethatfostershighanalyticsIQ,nurturescreativity,anddevelopsmultifunctionalmarketers.

Today,eventhemostadvancedusersareonlystartingtomakethetransitionfromtherepeatablestageto

themanagedstageor,inotherwords,frompointsolutionstoplatforms.Therearetwofundamentalreasons

forthis.First,asdescribedinthefive-stagemodel,thesupplysideofthemarketissimplydevelopedaround

pointsolutions.Second,someoftheseareashavebecomesocomplexthattheyrequiremasteringnew

organizationalpractices,processes,andskillsets.Ananalogytoanorchestraisapt.If50playersare

neededtoperform,theyeachmustfirstmastertheirowninstrument.Thentheymustlearntheirpartsforthe

piecethatthegroupwantstoperform.Next,theymustlearnhowtheirpartsfittogetherunderthe

orchestrationoftheconductor.Marketersarelikemusicianswhohavebeenissuednewinstrumentsthatare

unlikeanykindthey'veusedbefore.Theyarequicklymasteringtheirnewtoolsandlearningnewmarketing

plays,buttheyhavenotyetformedintoafull-fledgedorchestrainwhichall50musiciansperformasone.

Digital Advertising and Channel ConvergenceMarinwillbeahubtocapturedatafrommanydifferentsources,interpretit,and

providereportsforsubject-matterexpertstomakesmartdecisionsnotjustabouta

particularchannelbutaboutoverallmarketingstrategy.

David Rodnitzky, CEO, 3Q Digital

Digitaladvertisingisgenerallythoughtofasthreemaincategories:display,search,andsocial.As

thesedisciplinesemerged,companiesdedicatedpracticesareas,budgets,andtechnologystacksto

them.Specializedagenciesemergedwithdeepexpertiseinoneormoreoftheseareastooffera

varietyofmanagedservicesoptionsforbrands.Today,anumberofkeychangesarebreakingdown

thismodel.Thechangesareasfollows:

Brands are demanding more transparency and control from agencies. Managedserviceswhereanagencychargesamonthlyfeeorretainertoexecuteagivenamountofadspendarebeingrejectedbybrands.Themanagedservicemodeldoesnotofferthetransparency,control,orresponsivenessthatbrandsneed.Intoday's"alwayson"digitalmarket,brandscannotaffordtowaitforperiodicperformancereports.Asaresult,brandsneedaninfrastructureorservicethatprovidesreal-timeaccessandtheabilitytoquicklychangetacticswhenevernecessary.Thisbecomesmoreimportantastheadspendbecomeslarger.Agencieswillneedtomovetoopentechnologyandservicestocompete.


8/13

2015IDC #255781 8

Digital channels are linking and expanding. Display,search,andsocialarebecomingincreasinglylinked,andnewtechniquessuchasnativecontentareemerging.Consumersareconductingsocialsearches,publishersareleveragingeditorialwithuser-andsponsor-createdcontent,andmediachannelssuchasFacebook,Twitter,Pinterest,andLinkedInareaddingbundledadvertisingproductstotheirplatforms.Mobileisalsoplayingamajorroleinreshapingtheadlandscape.Dynamicallyservingadsonthemostcost-effectivechannel

basedonwhatcontentthecustomerhasalreadyseenrequiresdigitaladstoworktogether.Tothisend,majorvendorsareexpandingtheirchannel-specificproductsintomultichannelplatforms.Withinleadingbrands,siloedapproachestomanagingdigitaladvertisingarestartingtochange.Earlyadoptersthatinvestedheavilyinbest-of-breedapproachesforeachofthethreedigitaladcategoriesareworkinghardtocreateshareddatarepositories,workflows,andmetricsacrossthem.Newbuyerswillhavetheadvantageofhavinganincreasingamountofthisintegrationembeddedasadvertisingandmarketingcloudsmature.

Customers require better coordination between marketing and advertising. Today,customersareasdigitallysavvyasthebestmarketingandadvertisingprofessionals.Inreturnforallthedatatheyknowbrandshaveonthem,brandsarenowexpectedtousethedatatothebenefitoftheirprospectsandcustomers.Thisisahugeopportunitythatappliestotheentirebrandnotonlytoadvertisingandmarketingbutalsotosales,finance,fulfillment,andcustomer

service.Brandsthatarebestinclassatleveragingcustomerdataacrossthesefunctionswilldeliverandderivethemostcustomervalueoverthelifetimeoftherelationship.Brandsneedtobreakdownoravoidcreatingindependentsilosfordifferentcustomertouchpoints.Leadingbrandsarealreadystartingtoutilizethefast-pacedworldofadtechtomorerapidlyimprovetheirmarketingstrategyandtactics.Asaresult,interoperabilitybetweenadvertisingandmarketingwillbeasourceofcompetitiveadvantage,enablingbrandstomakethemostcompellingofferstothebestcustomersthefastest.

Efficiency at Scale

ThroughtheuseofMarin,wehavegrownourpaidsearchbudgetsbydoubledigits

everyyearsince2012.That'sveryimpressiveforamature,highlycompetitive

channel.

Mark Fiske, Senior Director, Global Marketing, Ancestry.com

Thepaidsearchenvironmenthasbecomesobigandsofastthatforlargebrandsit'ssimilartoaWall

Streettradingdeskinscale,complexity,andcompressedtimeframes.Therearemanydifferent

dynamicsthatmayrequiresubtletweaksormajorchangesinad-buyingstrategiesonadailyoreven

hourlybasis.Inbusinesstoconsumer(B2C),customerbehaviorcanchangeoverthecourseofthe

daywithmoreresearchhappeningduringworkinghoursandmorebuyingbehaviorafterwork.

Seasonality,holidays,sportingevents,andgeographiesalsoaffectconsumerbehavior.Moreover,life

eventssuchasweddings,funerals,andschoolgraduationscanbesignificantqualifyingsignalsfor

certainbusinesses.

Forbusiness-to-business(B2B)marketers,longmarketingandsalescyclesmakeitimperativeto

closelytrackbuyersinordertomakethemostcompellingofferstothebestcustomersthefastest.B2BbuyersgothroughlongeducationprocessesthatspanthefollowingdistinctstagesasdefinedbyIDC:

1. Exploration:

Buyerseeksfitbetweenabusinesschallengeandpotentialsolutions.

2. Evaluation:

Buyervalidatesthatthesolutionfitsitsneedsandcomparesalternatives.

3. Purchase: Buyerwantstodeploythesolutionassoonaspossible.


9/13

2015IDC #255781 9

ThemainchallengeforB2Bmarketersisthatasbuyersmovefromonestagetothenext,contentthatwas

previouslyvaluableandengagingbecomessuddenlyirrelevant.Thusitiscriticaltoconnectindividual

buyerstospecificactionsandresponsesandacutelytuneadvertisingandmarketingcontenttotheir

changingneeds.Thisdataisalsocrucialforoptimizingadinvestmentbecausewhatworksandwhat

doesn'tworkcanchangerapidly,andtransparencycanbethedifferencebetweensuccessandfailure.

ForbothB2CandB2B,otherlayersofcomplexityalsomustbeovercome.Competitorsareconstantlytryingnewtacticsasadinventoryiscontinuallychanging.Newchannelsemerge,adnetworkschange,

andcustomeraccesscostscanshiftsuddenlybetweenchannels.Asaresult,gettingthemostfrom

everysearchaddollarrequirestheabilitytobidatthekeywordlevelinrealtime,andlargebrandscan

havemillionsofthesesearchaddollars.Itissimplyimpossibletodowithoutanautomatedplatform.

Next-Generation Marketing and Advertising Teams

Theonlywaywe'llsucceedistohaveacoregroupofpeopleexecutingina

synchronousmanner.IfwetookMarinoutoftheequation,wewouldlosethe

consolidatedviewofbidsandcustomers.Wewouldhavetostartbuyingseparatelyon

eachadnetwork.Wewouldneeddigitalmediamanagersdedicatedtoeachchannel,

butthat'snothowourbusinessissetup.Ourline-of-businessmarketerscannotbeefficientwithoutanaggregatedtool.

Director, Acquisition Marketing, Large Retail Brand

Inadditiontotheirinvestmentintechnology,leadingorganizationsareusingthreekeypracticesto

bringgreaterefficiencytotheiradvertisingandmarketingoperations.First,theyareestablishing

centralizedrepositoriesandgovernanceforcustomerdata.Second,inadditiontochannel-specific

performancemetrics,theyarecreatingsharedmetricsacrosschannelseachteamiscompensated

onoverallmarketingperformance.Third,theyareusingcollaborativeworkflowenvironmentsto

increasethecoordinationandtransparencybetweenteams.Asaresult,theyareabletocollaborate

acrossmarketingandadfunctions,includingoptimization,social,content,paidsearch,andsearch

engineoptimization(SEO).Thisisconsideredacompetitiveadvantageintermsofimprovingspeed,

responsiveness,andconsistency.

Customer Snapshot From Managed Services to Advertising Cloud

A large brand-name retailer with a nine-figure marketing budget uses Marin to manage its search

ad investments. Eight years ago, the digital ad budget was largely dedicated to email and the

Web site. The small amount of search ad activity was handled by an agency. Today, paid search is

the largest portion of the digital ad budget, and the lack of visibility provided by the agency

model was extremely frustrating. Marin enabled the company to bring search advertising in-house

and improve control, visibility, and performance.


10/13

2015IDC #255781 10

Attribution and ROI

ThebigthingthatMarinbroughttothetablewastheabilitytointegrateourCLVdata.Campaignswethoughtwereverysuccessfulturnedoutnottobe,andviceversa,

whenwelookedathowlongcustomerrelationshipslast.CLVanalysishasbecome

fundamental.

Mark Fiske, Senior Director, Global Marketing, Ancestry.com

AttributionandROImodelsareverydifficulttobuildforlarge-scalemarketingoperations.Itcanalsobea

highlypoliticalconversationbecauseitwilldirectlyimpactbudgetallocationsindifferentgroupsthat

ultimatelyshouldbeworkingtogethertowardthesamegoals.Inmanyrespects,thedetailsofthe

methodologyarelessimportantthanthedegreetowhichitistransparentandunderstoodbyeveryoneup

anddowntheorganization.Italsorequirestransparencyacrossthedifferentsystemssothateveryone

truststhereportingprocessfromeachofthedifferentdigitalchannels.Ithelpsagreatdealifexecutives,

finance,sales,andmarketingcanestablishmethodsforattributingmarketingcontributionearlyonbeforeitgetstoocomplicated.Thedegreetowhichmarketingcontributioncanbeattributeddirectlytorevenue

dependsonbusinessmodels.ManyB2Ccompaniescanaccomplishthis,butmanycannot.Thekeyisto

connectcontactstoadspendandthentracktheirprogressthroughnurturingcampaignstoatransaction.

However,therearekeychallengesforbothB2CandB2Bcompanies.ForB2Ccompanies,customersdo

notalwaysbuytheitemtheyclickoninanad.Forexample,anadforjewelrymayultimatelyresultina

saleofshoes.ForB2Bcompanies,atweetthatlinkstoawhitepapermayresultinavideoview.Without

thedatathattrackstheflowofcustomerinteractionsacrossbothadandmarketingtouchpoints,itisvery

easytounderestimatetheinfluencethatadshaveonbuyerbehavior.

Customer Snapshot Managing Modern Marketers

3Q Digital is creating multifunction marketers and grooming them on a career path that

encompasses both the science and the art of modern marketing. A multifunction marketer is

someone with depth of expertise in one or two areas and familiarity with a portfolio of channels,tools, and go-to-market models. People at the bottom of the marketing organization spend 80% to

90% of their time on the science of marketing. At the top of the organization, they spend 80% to

90% of their time on the art of marketing and fostering creativity throughout the agency. The

career path may start in social advertising with exposure to search, display, email, and so forth.

As they broaden their expertise, they are able to think in terms of cross-channel campaigns as

opposed to having a singular focus on tactics in one area. This enables them to contribute more

and have more valuable conversations with clients.


11/13

2015IDC #255781 11

FUTURE OUTLOOK

IDCpredictsthataftermorethan15yearsofunbridledinnovation,themarketformarketingand

advertisingtechnologywillenteraconsolidationphaseinthenexttwoyearsaspointsolutionsrapidly

evolvetocloudplatforms.Somepointsolutionswillbeconsolidated;otherswillremainasindependent

"add-ins"toservenicherequirementsandcomplementmajorplatforms.However,themarketatlarge

willmovetoaplatformmodelinwhichmostmarketingtechnologywillbeavailableasaserviceand

potentiallybundledwithtechnicalandagencyservices.

For Suppliers

Theavailabilityofadvertisingandmarketingcloudsraisestheurgencyforsupplierstodecidehowthey

willnavigatethecomplexsetsofrelationshipsbetweentechvendors,agencies,consultancies,andintegratorsthatwilldeterminemarketpower.IDCexpectsalliancesbetweenthemajortechand

agencyplayerstobedominantintheenterprisesegment.Companieswhosetechnologybecomes

embeddedintothelargermarketingcloudsolutionswillfindtheserelationshipshighlyinfluentialin

termsofavailablemarketandfuturemergerandacquisitionactivity.

For Buyers

Theevolutiontomarketingcloudshassignificantimplicationsforhowmarketinginfrastructurewillbe

provisionedandfromwhom.Italsohassignificantimplicationsforthefollowing:

Outsourcingandcapacity-planningstrategies

MarketingITbudgetingmodels(potentiallyrollingtechnologyspendintotheadvertisingbudgetwhenbundledagencyofferingsareavailable)

Intheshortterm,leadingCMOswillbuildoutextensiveinfrastructureandtheassociatedorganizational

skills.Asaresult,theywillhaveadvantagesininternalexpertise,responsiveness,andcontrol.Inthelonger

term,marketingcloudswillmakemanyofthesamecapabilitiesavailabletoeveryone.IDCdoesnot

endorseawaitingstrategybecauseitwillhavesignificantimplicationsformarketshareerosionandresult

inanorganizationthatlacksmasteryincoredigitalandanalyticalskills.Whilemarketingplatformsmature,

Customer Snapshot Data-Driven Marketing

The best-case scenario for attribution modeling is to have senior executives from finance, sales,

and marketing establish a model irrespective of any technology or process within those functions.

An enterprise perspective is needed to ensure the attribution methodology properly accounts forthe specifics of the business model. This is the case at a regional self-storage provider. The

attribution model is embedded in the business-planning process. Once revenue objectives are set,

sales and marketing investments can be allocated based on expected inventory availability.

Actual expenditures are tracked carefully against performances across ad campaigns and

marketing programs and adjusted as needed. The key is to avoid making attribution a political

issue, which it inherently is due to the fact that people running more successful programs will

tend to get more resources. When attribution is fair, consistent, and transparent at the

enterprise level, it creates a collaborative culture that results in better coordination and overall

contribution from advertising and marketing efforts.


12/13

2015IDC #255781 12

technologywilldiminishasasourceofcompetitiveadvantagebecausemostcompanieswillhaveaccessto

thesameinfrastructure.Therefore,thelong-termdifferencemakerswillbetheproficiencyandcreativityof

yourpeople,theefficiencyofyourprocesses,andthemasteryofyourcustomers'behaviors.While

developingtheseareas,CMOsshouldcontinuallymonitorthedigitalcapabilitiesoftechvendors,agencies,

andothermarketingservicesprovidersandregularlyreevaluatethebuy-versus-buildequation.

CHALLENGES AND OPPORTUNITIES

ChallengesforMarinwillbetoexpanditsadvertisingcapabilitiesacrosssearch,social,anddisplay

somethingitisalreadydoingasindicatedbyitsrecentacquisitionofSocialMoov.Inaddition,Marin

shouldensurethatitscustomerdataisusablebyothermarketingandCRMsystems(andviceversa)

sothatclientscanbetterleveragecustomerinsightsacrossallmarketing,sales,andevencustomer

supportactivities.Finally,asothermarketingservicesfirmssuchasagencies,consultancies,business

processoutsourcers(BPOs),andevensystemsintegrators(SIs)expandtheirofferingsformarketing,

Marinmustoutmaneuveritscompetitorstodevelopstrategicpartnershipswithkeyplayers.

Theseactionswillhelppositionthecompanyasadtechandmarketingtechconvergeoverthenext

twotothreeyears.CompaniessuchasAdobe,IBM,Microsoft,Oracle,andSalesforce.comhaveinvestedbillionsofdollarsintheirmarketingcloudstrategies.Thisinvestmentisexpectedtocontinue

ascompaniesexpandtheircoverageofIDC's2015StrategicFrameworkforMarketingTechnology.

Eachnewcapabilitytheyaddrepresentsakeydifferentiator,andbyacquiringcompanies,theymake

thetechnicalandorganizationalexpertiseunavailabletocompetitors.Todate,muchoftheM&A

activityhasconcentratedonmarketingoperationssuchascampaignmanagement,socialmarketing,

contentmarketing,anddataandanalytics.IDCexpectsadvertisingtechnologytobecomeakey

additiontomarketingcloudofferingsforallthereasonspreviouslydiscussedinthispaper.

CONCLUSION

Thereisnoshortageofopportunityinthemarketingandadvertisingtechnologyarena.Themarket

continuestoevolvenewcapabilitiesanddeliverymodelsforcustomers.Brandshavetremendousupsidepotentialbutmustmitigatetheassociatedrisksofmakingtherighttechnologydecisionsattherighttime

sothattheyarenotoutmarketedintheincreasinglyfast-pacedexpandinguniverseofdigitalmarketing.

RELATED RESEARCH

TheMarketingSoftwareRevolution:StrategiesforBuyersandSellers(IDC#WC20150108,January2015)

IDCMaturityScape:MarketingTechnology(IDC#252793,December2014)

DigitalMarketing:TheFutureRoleofAgencies(IDC#252328,November2014)

WorldwideMarketingSoftwareForecast20142018:$20BillionandGrowingFast

(IDC#251902,October2014)

IDC'sStrategicFrameworkforMarketingTechnology:FiveDriversThatGetCMOsandCIOsontheSamePage(IDC

#248828,

June2014)

MarketingasaService(MaaS):ANewRoutetoMarket(IDC#247587,March2014)

IDCMaturityScape:Data-DrivenMarketingBeyondMarketingAutomation(IDC#244993,December2013)


13/13

About IDC

InternationalDataCorporation(IDC)isthepremierglobalproviderofmarketintelligence,advisory

services,andeventsfortheinformationtechnology,telecommunicationsandconsumertechnology

markets.IDChelpsITprofessionals,businessexecutives,andtheinvestmentcommunitymakefact-

baseddecisionsontechnologypurchasesandbusinessstrategy.Morethan1,100IDCanalysts

provideglobal,regional,andlocalexpertiseontechnologyandindustryopportunitiesandtrendsinover110countriesworldwide.For50years,IDChasprovidedstrategicinsightstohelpourclients

achievetheirkeybusinessobjectives.IDCisasubsidiaryofIDG,theworld'sleadingtechnology

media,research,andeventscompany.

Global Headquarters

5SpeenStreet

Framingham,MA01701

USA

508.872.8200

Twitter:@IDC

idc-insights-community.com

www.idc.com

CopyrightNotice

ExternalPublicationofIDCInformationandDataAnyIDCinformationthatistobeusedinadvertising,press

releases,orpromotionalmaterialsrequirespriorwrittenapprovalfromtheappropriateIDCVicePresidentor

CountryManager.Adraftoftheproposeddocumentshouldaccompanyanysuchrequest.IDCreservestheright

todenyapprovalofexternalusageforanyreason.

Copyright2015IDC.Reproductionwithoutwrittenpermissioniscompletelyforbidden.

the future of marketing and advertising technology

Documents