Jay Stocki: Today, we’re going to do a discussion on ‘Three Data-First Trends for 2019.’ I’m Jay Stocki, chief operating officer at Signal. Before we kick it off, I want to go over a couple housekeeping items. First of all, this webinar is being recorded, and both the recording and all the slides will be shared with everybody afterwards. And then, two, given the large volume of attendees, everybody’s been put on mute mode. So, if you have any questions, please type them into the chat box and we’ll try to go through them as the session goes on, and we’ll do our best to get to all questions at the end.
Jay Stocki: So to kick it off, our take is that 2019 is gonna be the year that brands finally live up to their brand promise. Now what do I mean by that? If you look at the last few years, so many brands have just been focused on getting their digital transformation going. But this year, it’s truly going to be the focus on a data-first mindset that takes the entirety of that consumer journey into consideration, and it’s going to be a data-driven approach and a true customer-centric experience.
Jay Stocki: And if you look at it, the heart of every consumer-focused experience is customer identity. Customer identity over the last year has been probably at the top of the hype cycle, but really it’s no longer an industry buzzword. The technology exists. There’s a bunch of solution providers out there, and now the goal is, How do you use that? How do you implement that to truly connect with real people, not just devices?
Jay Stocki: At Signal, we define identity in its most basic sense. It’s the connection point between all customer interactions, online and off, past and present. It’s the comprehensive catalog of all the information you’ve ever been able to gather directly from your customers across all of your different touchpoints. And by touchpoints, it’s the web, it’s mobile apps, it’s your actual physical store, it’s email, it’s digital ads, it’s your call centers, it’s addressable TV, even moving into linear TV. It’s all of those touchpoints with your consumers. Really, identity gives you this unprecedented visibility into exactly what the customer wants, and how to effectively fill their needs at the right time.
Jay Stocki: A quick background on me. I am new as the Chief Operating Officer at Signal. I’ve been in the adtech space pretty much since it began, and I’ve spent the last five years at Experian, so I know a little bit about data. But I also got a couple other true industry experts here with me, the first of which is Brian Andersen from LUMA Partners. Brian, would you mind saying a little bit about yourself and LUMA?
Brian Andersen: Sure. Well first of all, thank you for including me. I am honored. So, I’m a partner at LUMA Partners. For those of you that don’t know LUMA, we are a merger and acquisition advisory firm focused on digital media and digital marketing, with really a specialty around data-driven marketing. So some transactions we’ve advised on were transactions like DemDex sold to Adobe, that’s their DMP, or Aggregate Knowledge sold to Neustar, their DMP. Moat sold to Oracle, Turn sold to Singtel, and many others. Before LUMA, I worked at Omniture and I ran corporate development there. Omniture, as most of you know, was acquired by Adobe, becoming the basis of their marketing cloud. And before that, I ran corporate development at Interwoven, which at that time was the leading content management provider. So, I’ve been in and around marketing tech for a long time.
Jay Stocki: Brian is not in the room with us, he’s in San Francisco, so we may talk over each other a bit, but we’ll do our best. And I also want to introduce everybody to Joe [Doran]. Joe took the red-eye so he could be here with us today. So, Joe, I appreciate it. You want to say a little bit about yourself and your background?
Joe Doran: Awesome. And I love the red-eye. Just came back from [LiveRamp’s conference] RampUp, where there’s lots of identity conversations going on, and as well with the rest of the industry. I have this fancy title [at Signal] called Chief Identity Officer and I really enjoy the title. It allows me to break into a lot of conversations with people. But really, so people know kinda what I do day-to-day here at Signal is I got basically two jobs. One is I run our sales team and our customer success team, which is dealing with our day-to-day clients that are really struggling with the challenges of how to drive and manage identity across their enterprise and make it actual and drive business results for them. I have another part of my job where I drive all the partnerships with all our identity contributors that really power our identity network or our matching network, that allows for all the data onboarding and activation at the real-time speed that we have today. Also, long-time adtech, martech guy. I’ve been in the business too long. As you can tell by the picture, I have no hair.
Jay Stocki: Well, have a look at those pictures, and I think Brian and I both have a little more gray hair than those pictures indicate, but that’s neither here nor there. All right, so let’s dive into the discussion. We’re gonna talk about three key trends that we see happening this year in the whole digital marketing space. I’ve always wanted to say this in a presentation, but onboarding will get sexy. And by that, it has been kind of a mundane task, but it actually is key to changing how brands interact with their customers. Marketing will now truly be in the moment. That whole right-place, right-time, right message is now coming. And then, brands are going to have to, at least the brands that want to succeed, they’re going to have to take back control of their data.
Jay Stocki: All right, so the first topic: onboarding will get sexy. Onboarding’s been around for a while. It has been a very mundane process of uploading your CRM file and then allowing that to be able to be accessed in some sort of digital environment. But, you know, Brian, I loved your presentation at [AdExchanger’s] Industry Preview last month. The title of the presentation was something sort of like ‘The DNA Traits of Successful Direct-to-Consumer Brands.’ And while we can’t go into all the topics of that presentation, I know you talked a lot about the identity-focused customer relationship trait and how important that it is. Take a few minutes, and talk about how you’re seeing that impact brands.
Brian Andersen: Sure, yeah. So, in that presentation, I did go through what we identified as the seven traits as those common across direct-to-consumer companies. And these are traits like being digitally native and mobile-centric, focusing on product design and user experience, but absolutely being identity-focused customer relationships. And traditional companies, you know, at best learn the customer identity at purchase, and many never learn the identity, sell through the retail chain and all that. So one obvious difference in the name ‘direct-to-consumer’ is that your consumer companies always learn the identity of customers at purchase, so they can use this information for upselling to those customers.
Brian Andersen: But ideally, D2C companies are trying to capture the identity of prospective customers as far up the funnel as possible. You know, so they’re doing things like surveys on customer preferences, more interactive shopping experiences. You can think about Warby Parker, first on their website determining preferences and then enabling a really easy, personalized buying experience by shipping multiple pairs of glasses to try on. But the impact of this identity-focused approach is a better, more personalized experience for customers.
Brian Andersen: And brands have taken notice. So, Procter & Gamble has been transforming their marketing practice for years. If you look back in 2017, they switched their entire ad infrastructure, including switching their DMP, because they wanted to focus on identity. And just last month, [P&G Chief Brand Officer] Marc Pritchard talked about strategies to know their customers in cutting-edge ways. So, these were specifically a facial recognition technology to recommend skin care products to their customers in a mobile app around skin care. So what they’re doing is finding ways to provide value to their customers, and in exchange, they obviously get the customer’s data that they can utilize. Marc talked about how very specifically this was to get data and identity to get the most sales out of the customer. You know, P&G gets it, so they are very focused on the lifetime value of their customers, and they’re using identity in order to do so.
Jay Stocki: Very cool. So, what did you learn from your view of using the skin care app? Did you learn a lot from being a user?
Brian Andersen: Yeah, I learned I need to use them. As you mentioned, those pictures are maybe a bit dated.
Jay Stocki: I think you bring up a great point. A lot of this has been driven by these direct-to-consumer disrupters, who have started to change the marketplace. But, you know, back to my point earlier, onboarding is truly becoming sexy because the traditional brands realize that this is absolutely where they have to play, what they need to truly understand customer identity. It’s now an absolute marketing imperative for them. And then, if you take a step back, what is the foundational step in understanding customer identity? Well, it’s being able to onboard some of your customers. So, I’d like to turn it over to Joe. Can you just talk a little bit more about data onboarding and how it’s evolved to be so foundational?
Joe Doran: Yep, absolutely. I think you gave me a great setup. So, first off, data onboarding’s not really new to the industry. It’s been around for a while, and brands have always had the options of doing data onboarding and working with third-party vendors. And that process was very straightforward. Go and take your CRM file, and I’m gonna go give it to my data onboarder, they’re gonna go and match those records, and they’re gonna push out those match records out to my media vendors, where I really want to do activation against it. And that process has delivered a lot of value to a lot of brands, but there’s some challenges with that because those first-generation onboarders are primarily doing a batch process and not building that foundational-identity asset that brands need to build and really drive value against that.
Jay Stocki: Makes sense.
Joe Doran: When you think about those challenges, if you’re a batch onboarder, you have unmatched records, [and] those unmatched records are lost. I can no longer keep those nor try to resolve against those identities. So, that’s the first challenge that you have. The second challenge is batch onboarding, the way it’s actually designed and built. First-generation technologies have problems of getting to the speed of what the customer wants. In the area of batch processing, a lot of this takes five to seven days for me, as a brand, to put my data in.
Jay Stocki: Could be a long time.
Joe Doran: Exactly. It’s a long time. A lot can happen in five days. And when I’m out there talking to my customers or customers that are looking at doing data onboarding, I basically ask them, “What’s a normal lifecycle of your customer? When you first see a customer and you actually see some level of intent, how long does it take for them to buy?” And usually the answer is “Oh, it happens in minutes. They’re actually just going through maybe a couple different sessions, they move from their app to the desktop” to “Hey, it takes 48 to 96 hours.” And when I go, “Well, how are you using data onboarding to actually help you in that fashion?” they say “I can’t, because it’s not going fast enough, [or in] real time.” So, [batch onboarding] really misses the opportunities of acting or reacting to the resolution that’s actually happening for your customers.
Joe Doran: Another challenge you have with some of the onboarders is because a lot of marketers will use the walled gardens to onboard against. And those are great environments to go advertise in. A lot of marketers have to advertise in those walled gardens like Facebook or Google, but a lot of times, it’s easy to put the data in and activate that data, but you can’t get any of the data or the intelligence out.
Joe Doran: So when we think about onboarding, marketers are looking at this and saying, “Just send me my data out.” And doing more of what Brian talked about the ‘spray and pray’ against my known audience, isn’t helping them solve what the direct-to-consumer guys are doing, where they’re actually seeing and resolving those identities back to real time events that they’re actually seeing and making real actions, excuse me, down the funnel.
Joe Doran: So, now when marketers look at this and they look at “How do I build an identity foundation? I need something that’s acting at the speed of my customers, that’s actually working probably more in real time, and actually persisting that identity so that I can resolve it back to the activities that are actually happening, back in to those purchase activities, so that I can truly know what was my ROI, what was my return on my ad spend so I can really, really get there?” So, I think that’s really where, with the marketer that has more choice, they’re going to care about “How do I build a foundational identity asset that actually increases asset value as a marketer?” Getting it in minutes or real time is where a lot of our marketers need to go.
Jay Stocki: Very cool. Awesome.
Joe Doran: So, a lot of the questions I think a marketer will think about, or the things I’d say a marketer should ask
themselves when they’re thinking about how to do identity resolution: “How do I do identity management? How does this data onboarding and bringing it into my system, as well as in my vendor marketing technology system, how should I think about this?” I think there’s three core areas that you really need to think about.
Joe Doran: First is speed, how fast do you need to be able to see a signal and actually react to that signal from your customers to be able to take action and actually marry that onboarding activity to the pace with how fast your customer buys. And if you have a process that takes longer than seven days, you probably don’t need something that’s moving at that speed. But I do think that the speed is really, really important, not only in the world of activation, but also very, very important in the world of suppression. When you think about it, a marketer that’s using traditional retargeting methodologies on a device or cookie-based methodology, but once [the customer] actually purchases, they may not be able to resolve back to that individual to suppress them from the campaign. And if you’re using a batch onboarder and you’re doing people-based marketing, I have to wait five to seven days to suppress? Five to seven days of ads around the barbecue that I looked at last night and bought today?
Jay Stocki: Yeah.
Joe Doran: It is not a happy or good experience for any of those customers. So I think speed is really, really important, and you need to be able to take the data and signals that you see, be able to update those audiences and make that data actionable within your marketing technology stack, whether it’s an external vendor, it’s an internal ESP or wherever it needs to go. You need to have that speed there.
Joe Doran: I think the other thing a marketer should really, really ask themselves is how accurate is that data? If I’m doing data onboarding once a month and I know that cookies live for 15 to 20 days, how accurate are those cookies or those devices that I have against it? And when I talk to our brands, they are very interested in building their own device graph, and we help them build that device graph so they know what cookies belong to users that they capture within their digital touchpoints, those mobile ad IDs, but they also want to know the other ones that are out there, like our identity network does. The thing I tell them is “Look, accuracy really, really matters because if you’re not getting an accurate, fresh look at that device graph, you’re not going to get IDs that you can actually put working media dollars against. You’re gonna get cookies that you can’t buy, or you’re gonna get devices that you can’t buy, and they’re not directed or linked to IDs.” Accuracy really, really is important for a lot of our customers, especially if you truly think about the customer journey management, [and] having creative and messaging really tied to that person and where they sit in that path.
Joe Doran: The third question is a question that brands bring up on themselves all the time, and ask us this all the time. It’s “I need to control my data. My data is my data is my data. How do I control and make sure that I can trust my partner, my data onboarder, that none of my IDs will be leaked and shared with other people, that none of my devices or my device graph is used to enrich any of my partners, and I have trust and convenance that I have with my consumers that I just cannot absolutely break?” Control is a very important question. I tell a brand “You should absolutely know exactly what happens to your data, [and] ensure that if you don’t want data to be shared, you should know exactly how those activations are actually being done or how that data’s being transported, so that your identities never leave your system and that it’s controlled in a very privacy-centric way.”
Joe Doran: Those are the big three questions that a lot of our brands are asking of us, and I would say every brand should be asking of themselves.
Jay Stocki: Cool. So, I think you proved my point. Onboarding is sexy, or it’s becoming sexy, right?
Joe Doran: It’s super-sexy. I love it.
Jay Stocki: It’s the foundation, right? If you want to be a true customer-focused, customer identity-focused marketer, you have to be able to understand onboarding and the points you bring up. But of course, once you onboard it and now you activate [the data], what are you doing with it? Well, you’re probably advertising. And again, Brian, I’m gonna go back to your presentation on the DNA traits of the direct-to-consumer brands, because I think they’re showing the way on this is done. Can you talk a little bit more about how these true industry disrupters are leveraging their performance in ad media spend, and some of the success stories around that?
Brian Andersen: Absolutely. So, typically, brand advertisers look at advertising as a discretionary expense, so you can think about it as an operating expense, you know, below the gross margin line. And yes, they’re advertising to drive revenues, but there’s typically not a direct connection from the ad to a sale, but instead some intermediate metric, like increasing brand awareness. You know, the difference between that and D2C brands is D2C brands are performance advertisers. They’re looking for a direct link from an ad to a sale. Again, they make the sale to the consumers, so they actually have that. And what this effectively does is move advertising up the income statement to a cost of goods sold, meaning it is a direct expense explicitly tied to a sale. And they think about advertising very differently.
Brian Andersen: This was a surprise to me when I started meeting with D2C companies and the investors that back them. They focus on metrics like CAC and LTD: customer acquisition costs and lifetime value. And if those of you [reading] are in an enterprise software business, you know what your CFO’s focused on. Your CFO is focused on customer acquisition costs, lifetime value and the ratios between those two. So, here are consumer-focused companies that are using those same methodologies or same metrics to track their business. And this is one reason why venture capitalists love D2C companies: they speak their language as a data-driven business.
Brian Andersen: And again, coming back to P&G and that example, they get it. Marc Pritchard, who I would traditionally view as the poster boy for brand advertising, is now talking about performance advertising and driving product sales instead of brand awareness. They’re navigating towards “more performance marketing, an approach among D2C brands in which campaigns are oriented around driving product sales instead of brand awareness.” This is a completely different type of mindset from a traditional large-brand marketer, and the reason they’re doing this is simple. They are losing shares to D2C brands, so they’re adopting the methods that are working for their competitors.
Jay Stocki: Very cool. Yeah, it reminds me of a recent presentation by your partner [LUMA Partners founder and CEO Terry Kawaja], and one of the things that I took away and wrote on my board here is, “Brands who want to be successful have to learn how to hack the CAC.” You really, truly have to get good at understanding your customer acquisition costs in every channel, and then you have to truly understand the lifetime value of that customer.
Jay Stocki: Conversion rates don’t matter, right? It’s your CAC over your LTV. Well, how can I get that customer and keep them to get that lifetime customer value? It goes into one of the favorite tactics of most of the marketers today, and that’s the traditional retargeting. One of the biggest sources of irritation of consumers is retargeting. We have recent survey results. Seventy-seven percent of consumers say they receive too many retargeting ads from the same brand. And even more complain they still receive those retargeting ads for products they’ve already bought, and 57 percent of them claim — and it’s a claim, right — that retargeting ads don’t even persuade them to buy.
Jay Stocki: What’s crazy is that most brands kind of already know this. A lot of retail marketers believe they would achieve the same results organically, without retargeting. The average brand — online retailers — spend $17 million [annually] on retargeting, and they plan to continue to increase that spend. And yet, marketers themselves doubt that this tactic is actually working. So Joe, how can identity help marketers get away from this, and get to a more performance-oriented mindset?
Joe Doran: A lot of marketers are really leaning into this performance-based mindset and rethinking how their
customers are changing. Because really, thanks to the evolution of identity resolution technologies and capabilities, marketers can now build customer profiles from deterministic and persistent first-party data, starting with data that most of them actually have within their systems already, like email addresses, their loyalty membership, their CRM or customer IDs. And then having those records and profiles, by their very nature these deterministic identifiers can persist across any touchpoint where the customer logs in or authenticates via some type of transaction that allows [brands] to build, not only on their own properties, that device graph for my customers. But it really helps them when they’re rooted in identity profiles that are continually updated. They can be enriched with each of the customer interactions, and it really allows [brands] to create a dynamic, multi-dimensional and addressable media asset. This is what makes retargeting relevant again — instead of doing a cookie base, doing it based on a personal profile now and throughout the lifecycle.
Joe Doran: You don’t have to look far to see people that are doing this really, really well. You can look at the world’s largest digital retailer for proof, and there’s a reason why Amazon launched its own retargeting ad program last year. It knows that converting today’s demand-fickle and empowered consumers into repeat customers requires more than just resending product ads that they’ve sent. It means they need to nurture the relationship that [Amazon] has with that customer. By leveraging its vast stores of consumer data, Amazon knows what the consumer is looking for, what they’ve already bought, and it can retarget those shoppers with messages that actually add value to the experience. This is identity-driven retargeting. It’s no longer just a lower-funnel ad tactic chasing those short-term conversions and gains, but really, it’s a long-term strategy about building affinity with you and your brand, and building those high-value customer relationships.
Joe Doran: When you think identity-based marketing, it isn’t about optimizing towards just a conversion. It’s about optimizing toward what gets the conversion. And armed with identity, brands can recognize known consumers throughout all stages of their purchase funnel and beyond, from awareness to consideration to purchase to loyalty, and target them with the right, personal, relevant messaging that drives the ultimate KPI, which is high customer lifetime values, which is incredibly important for almost all the brands out there that we talk to.
Joe Doran: And when you think with identity-driven strategies that can drive more impactful advertising and media efficiencies, you kind of really break that down into a couple of key strategies. You know, one is activate and engage real people throughout the entire purchase funnel. So, that’s pretty straightforward, knowing exactly where those are. You can leverage the user level insights to really refine that message, allow for cross-sell, move relationships at the pace of the customer. These strategies have real value. If you know the affinity of that customer, and you know that they like a distinct category of products, the ability to cross all them is so much more. And you see significant return from a lot of our customers that use these tactics.
Joe Doran: One of the big tactics that just drives a tremendous amount of value on return on ad spend is suppression. And it’s not just suppression of people that just bought and removing them from campaigns, but when you know someone is outside of the window of conversion, that that audience is going to be duplicated or that consumer is going to be outdated or duplicated, removing it from it just means I saved a wasted dollar of media. And that wasted dollar of media can get reapplied back to another people-based marketing campaign that’s driving a higher conversion rate and a higher return on ad spend anyway. So you get a double added bonus when you think about your ad and media spend. The other thing is by doing people-based or identity-based driven strategies, you can actually look across all the touchpoints of what you’re actually marketing to your customer to be able to really, truly evaluate the performance and the journey of that customer, so that you can optimize towards better and better outcomes.
Jay Stocki: Very cool. I think you helped to sort of prove the point that marketing has got to be in the moment. So much more than just retargeting, you need to understand identity, and you have to use that to optimize and deliver performance-oriented strategies.
Jay Stocki: So, as we dig into more on the advertising topic, we have to start talking about how things have changed. For everyone who’s following the Facebook/Cambridge Analytica scandal, can you imagine being at Facebook last year, and all of a sudden this breaks and you wake up the next morning and your market cap is down by $120 billion? It was a significant issue, but it’s also caused significant discussion around how do brands take control of their data. And so Brian, could you talk about what sort of changes and challenges you see in brands’ attitudes towards their customer data?
Brian Andersen: Stating the obvious, the big change in the past decade or so has been the move to data-driven marketing. You know, so you can look at data as the fuel for this. But like oil, data can be hazardous to a company if not utilized and controlled properly, like Facebook. As everybody’s aware, Cambridge Analytica led to a lot of the congressional hearings. You have Europe with GDPR, et cetera, so we’re in a heightened consumer data privacy and regulatory environment. So, it is critically important that you get control of your data, and this is both for offensive reasons and defensive reasons. What I mean by “offensive reasons” [is] you get your data in place and control that data to power a positive customer experience and drive revenues, but it also has to be managed properly in order to protect the brand’s image and prevent damages, such as regulatory fines.
Brian Andersen: Signal, the company, knows this better than anyone. They started in the tag management space, which is a critical technology that makes sure web data is being sent to only the partner that should receive that data — just one example of controlling your data. But if you step back, you know marketing has always been a combination of channel-centric siloed systems. You have your email teams and an [email service provider], you have your web teams and your content management and web analytics, your social teams and social marketing management, et cetera. So, offensively, in order to provide a positive, consistent customer experience. You know, these data silos need to be unified, or more accurately, the data needs to be extracted into a single system in order to provide a single view of the customer. And this needs to be done for defensive reasons as well.
Brian Andersen: In our view, it’s critical for marketers to have a single customer view for every consumer, and this includes the long-lived information, like name, address, email, purchase history — things that you learn over time. These are things like brand affinities, what are their sizes, what are their preferences, et cetera. There’s also the dynamic information that’s really the more short-term information. So, what are the products that they browse for on your website? Have they called your customer support center, and what have they called about, et cetera? Our view is this is all the customer record, and studies I’ve seen indicate only a small minority of marketers surveyed say they actually have this in place, they actually have a system that can provide this single view of the customer. But creating a single view of the customer is critical so they can have that base data in place to power personalization and to drive a consistent experience across channels, which then drives revenues.
Brian Andersen: You know, but just as important, has a person opted in or out to email communications? Have they opted in or out for web tracking? That kind of information that’s now critically important in Europe [with the] GDPR, [and] you have new legislation like the California Privacy Act, et cetera. So, it’s really important not just to drive the positive experiences and drive revenues, but also to make sure you’re complying with these laws to be able to have identity resolution, so you know it is based on a person, and what are their preferences and what are they opted into, what are they opted out of? Strong identity resolution coupled with a customer-data platform is what we view as really kind of the best in class critical combination for powering the customer experience and regulatory compliance. If you go to some of the CDP websites, you will see sections on how to use their products for GDPR compliance, in addition to the main thing that they’ve been trying to do — enabling personalization across channels.
Jay Stocki: Great, thanks. Yeah, I think this just sort of highlights that if brands can’t protect their customers, they can’t protect their businesses. I love that line. But really, it’s a stark reminder that as marketers, our number one responsibility is to serve our customers better. It’s not serving more ads. As an industry, we have to continue to do better. If not, we’re going to have to pay for it. I mean, really if you look at the current situation … I’m fortunate I get to spend a couple times a year on Capitol Hill talking with various congressmen and understanding some of the issues. And just by shear voice of their constituents and the calls coming in, this is now becoming more and more important. You know, the California Privacy Act is the first step, but we can’t have this state by state. There is going to be some sort of federal legislation that’s going to have to bring this all together.
Jay Stocki: So, if you look at brands that are working hard to bring this all together and they’re trying to implement their own privacy safeguards, but they have to be aware, right? Consumers have gotten smarter. They now know the cost they’re paying in using these free applications. They’re starting to understand the value of their own data. That’s why now, more than ever, it’s absolutely critical as a brand that you’re completely transparent with how you’re collecting data. And you know it underpins everything that marketers do. They have to be able to work with that customer.
Jay Stocki: Joe, do you have some advice on what marketers can do to sort of take control of their data?
Joe Doran: Absolutely. And there’s a couple things. So, we all know the environment out there is very, very scary. And one of the things I would tell brands [is] that they should not be afraid to ask for the data that you have the rights to as a first party. But there are some principles that you should really think about when you wrestle through that. And the reason why I say “Don’t be afraid of asking for the data” is because we already know people are willing to trade personal data for a perceived value. That’s how Starbucks can send you a treat on your birthday. It’s how Waze can alert you of the potholes in the road ahead. It’s how Facebook connects you to people you haven’t seen since high school. Those services are really valuable, and people trade their personal data for those services.
Joe Doran: But we would tell you that there are some principles you should think about when you’re asking for that data, or when you’re getting that data. You really need to think very deeply about the control systems that you have in place around to ensure that that data is yours and yours alone. You’re taking on a significant responsibility with that data, as far as that trust with the brand itself, and what you’re doing with your customers needs to be managed really carefully or you could ruin that trust and actually lose that. [It means] being very transparent so people know what data is being collected and what data is not being collected, and then how it’s being used. No one wants to be part of a breach.
Jay Stocki: To wrap some things up here, if you look at it, the customer journey is only getting ever more complex. We’re not going to have fewer touchpoints with the customer. There’s only going to get to be more and more. If you’re going to be a successful marketer, you can’t just rely on intuition or second-hand information. Data is what drives everything forward, and most specifically, a brand’s first-party data becomes the single source of the truth — that north star.
Jay Stocki: To summarize some of the things we talked about today, onboarding is critical for personalized experiences. Identity is the key to unlocking in-the-moment marketing, and this means much more than just retargeting. And really, as a brand, you have to control your data to control your own destiny.
Jay Stocki: We’ve been getting a bunch of questions coming in, so I’m gonna try and address a few of them, and we’ll do it for as much as the time allows. Joe, how about one for you: “How do you implement identity resolution through a DMP?”
Joe Doran: We get asked that a lot. And I think the thing that brands should really think about is can the DMP actually onboard the data that I have directly into it? And when I say “onboard it,” can it actually collect and connect you to identifiers that you may or may not know about your consumer records? What a lot of our customers will do is take the data that they have today and basically store it within a DMP. But if you really, truly want to drive identity resolution where you can actually connect CRM records or people-based identifiers to devices that the DMP knows but can’t connect with those CRM records, you’re going to need a data onboarder to actually drive that connectivity and help the DMP do its job better by connecting to those devices. And that’s really where someone that’s doing continuous onboarding, someone that’s doing real-time capabilities, can make the DMP actually more valuable and give it data to actually resolve against those identities.
Jay Stocki: Brian, here’s one that came directed towards you. “Do you see any certain categories moving towards people-based performance marketing strategies?” And I’m assuming by categories, they’re talking about various industries or genres.
Brian Andersen: Any categories? You know, it’s kind of across the board. I mean, you have companies like Brandless selling really low-cost items D2C, and it’s obviously a people-based manner. You have Away, a luggage company, that said “The market is either really low-end, crappy luggage or ridiculously expensive luggage. Why can’t we make high-quality products and sell them at a reasonable price?” So, it’s both the cleaning products [Brandless is] selling for a few dollars and, you know, products [Away] is selling for hundreds of dollars. I think you have really the whole spectrum of companies, and it’s really more of a mindset that’s changing across industries.
Brian Andersen: One thing we haven’t talked about in this session is the blending or integration of adtech and martech, and identity is the link there. So, as an example, what’s been the highest ROI marketing channel since the dawn of digital marketing? It’s email.
Jay Stocki: Right.
Brian Andersen: But if you don’t have strong identity resolution and the ability to capture email addresses, well
obviously, you can’t do email programs. So, things like that are what these innovative companies are doing across the spectrum, across low-end products to high-end products. Again, it’s more the mindset of how to approach the consumer interactions, whether that be customer acquisition or customer retention and upsell. And again, blending those things, you can actually do customer acquisition using channels like email if you’re able to do that identity capture further up the funnel.
Jay Stocki: This is another one, kind of a follow-on to that. It was directed again towards you, Brian. “Direct-to-consumer brands are eating the competition’s lunch, but legacy brands have a huge advantage — capital. Look at all the incumbents snapping up D2C startups, like Dollar Shave Club. Are they essentially acquiring identity and known user marketing? Is acquisition the only path forward, or is there an easier, more efficient way for incumbents to reach customers on a more intimate level?”
Brian Andersen: You know, obviously to a hammer, everything looks like a nail — and a M&A advisor.
Jay Stocki: So you’re saying everything has to be done by acquisition? Okay, done.
Brian Andersen: Yeah, done. So, you know, I like to look at case studies in other areas. So, I’ll use where I came from: Omniture being acquired by Adobe. The press release when that was done talked about connecting content and analytics, and it makes sense. But what was probably even a bigger reason was [Adobe’s] products, at the time, were boxed software — you’re gonna get Photoshop sold through the retail channel like Best Buy. And so, they’d have a new suite come out, they’d stock the store, they’d see their revenues go up, but then just flatten out in between releases. So, what they wanted to do was change to a subscription model, but they didn’t know how to do so. What did Omniture do as a SaaS business? [It] offered a service, sold on a subscription basis. And so, [Adobe] not only acquired a business with a complementary product, they actually acquired the know-how of how to run a subscription business. And, you know, Adobe’s market cap has just spiked. And yes, the digital marketing business has done well, but probably what’s driven more of that value creation is the change of their traditional business — from selling boxed software through the channel to subscriptions sold directly to their customers. And so, here’s a company that used M&A to learn.
Brian Andersen: So if you switch back to companies that are losing share to direct-to-consumer brands, sure they can try to do it. But a lot of times, you need to just have the know-how. And so, yeah, you can acquire a Dollar Shave Club that has a good consumer database you can market to for your other products and all that, but it’s actually more about, “Okay, why were they successful? How do they do content marketing?” Everybody knows Dollar Shave Club’s content marketing, which is one of those critical traits for D2C companies. You know, how do you do performance marketing? How do you capture consumer identity in order to have more identity-based performance advertising, et cetera? It’s not just grabbing a company for their database. It’s for the people that have the know-how about how to operate these businesses. So, sure companies can try, but if you’re a company that’s 100 years old, used to selling through the retail channel and ‘spray-and-pray’ brand advertising, it’s gonna be a long road. And so, investing X amount of dollars to buy a leading company that has figured it out can be well worth it to transform the whole business.
Jay Stocki: All right. So not only that, you’re saying acquisition’s the only forward, and there’s multiple reasons why you need to do it, coming from an investment banker?
Brian Andersen: Right.
Jay Stocki: Thanks, Brian. Appreciate it. Joe, here’s one I think is better for you. “How can we take steps towards an identity-driven approach with our existing tech stack? What will we need to replace versus add on?”
Joe Doran: I think a lot of people will look at an identity solution and figure out, “I have to take something out of my stack or I have to go make a significant investment in this,” and really, they really don’t need to. There’s nothing they need to rip and replace to go and drive that. And it really depends on what is the use case? What are they going and trying to achieve? So, if you’re a brand, and you’re already doing programmatic marketing or you’re marketing within those social channels and you just want to move from ‘spray and pray,’ like Brian talked about before, to a people-based model that can manage your audiences and activate those audiences, the only thing you really need to do is be able to take data out of your CRM or [email service provider] file and send it to your identity partner, and the identity partner’s gonna go put those audiences in those social channels or directly into those DSPs for you to go and connect to.
Joe Doran: If I’m a shopping retail site, I have low authentication until people actually purchase, but if I want to go and connect that anonymous site traffic to my CRM files, you don’t have to replace anything within your marketing technology stack. All it is is a simple piece of data collection code from us on your website, along with the same kind of input from your CRM records or your ESP, and we can start connecting that anonymous web traffic directly back to you, so you can have better analytics. And then also do better personalization, or capture those events that may be very important to you, like a cart abandonment. Against anonymous traffic, you can’t send an email against it, but the ability to recognize that and resolve that identity and actually send that data back to the customer in real time is very, very important, and then you don’t have to rip and replace.
Joe Doran: And if there are technologies that you need us to distribute that data to, most of the time, companies like us can distribute that data back into the DMP, back into an ESP, back wherever you need it. A lot of times, an identity company like us is going to give you higher quality data and higher impactful results without having to rip and replace.
Brian Andersen: Yeah, actually one thing that I saw at RampUp was a session on identity. There was a woman who was in charge of data platforms for Disney, and as we all know, Disney powers amazing personalized experiences, whether it be at their theme parks or through ESPN or whatever it is. And she was very clear. Someone asked [her] a question about, “How do you even approach this?” She said, “Well first, you need to have a strong identity graph and identity resolution. That’s critical as a first step. From there, you can then pin data to those identities.” So, another take on what you just said.
Jay Stocki: I think that’s probably the single best way to wrap up this discussion.
Joe Doran: Yep.
Jay Stocki: Actually, I would love to keep going, right, but I’m getting the warning light that we’re running out of time. So, as a reminder, this has been recorded. We’ll be distributing the deck. We’ll also personally reach back to all the unanswered questions that we didn’t get to and follow up. But thanks for your time, and thanks for joining us today. And Brian and Joe, I really appreciate you taking the time to talk with us.
Joe Doran: Not a problem. Thank you for everybody there.
Brian Andersen: You’re welcome. Thank you.