Tag Archives: marketing technology

Marketing Technology that Powers $42.3B in E-Commerce

Quick link:  Download report here.
This was our second year releasing the Marketing Technology Holiday E-Commerce report.  It’s no Lumascape, but it’s damn interesting.

It started as a simple project for me to understand which top e-commerce players were using different Marketing Technologies.  This year, we included trending information from last year’s report.

Here is a link to the new 2012 report (PDF), and a link to the old 2011 report (PDF).  The actual data set that it is derived from can be downloaded here for your own analysis.

I owe a big thank you to my friends at Evidon for providing me this information as Ghostery powers much of it.

AdExchanger was kind enough to write up the report late yesterday and hopefully you had a chance to read it.

Here are my takeaways:

1.  Social.  100% of the 20 surveyed sites were using social plug-ins or another form of social connectivity.  While social is the grouping, this shows the power of “earned” media; or at least the potential power of “earned” media.

2.  Audience.  I’ve been harping on this for years now.  We need to understand audiences in marketing.  Not just online, but in store too.  We’re seeing these top e-commerce sites learning about their audiences by deploying different marketing technologies that could help shape audience experiences, products, customer service, etc.

3.  Mixpanel.  I was surprised to see them in the top 10 marketing technologies utilized.  They are an analytics platform for the desktop and mobile web.    Impressive to see them breaking into the top 10.

4.  Slow decline of the ad networks.  Not the death as many folks have predicted but 51% less ad networks year over year.  Google AdWords was the top ad network (no surprise).

Again, the report isn’t perfect due to classification of companies but it’s directionally accurate.  I look forward to hearing your thoughts!

Golden Age of Ad and Marketing Technology

On AdExchanger yesterday, Terrence Kawaja talked about how Ad Tech was going through a potential Golden Age.  There have been some recent acquisitions/mergers that have helped validate some of this thinking.  But why?  And why now?

List of recent ad tech acquisitions or mergers, not complete:  33across/Tynt, SAS/aiMatch, DG/Peer39, OpenX/LiftDNA, Pubmatic/MobiPrimo, Rubicon Project/Mobsmith and Syncapse/Clickable, Google/Admeld, Google/Meebo, Yahoo/Interclick, ValueClick/Greystripe, Adobe/Efficient Frontier, Oracle/Virtrue, Salesforce/Buddy Media, IBM/Core Metrics

I was talking to a potential client yesterday and we were discussing advertising technology.  We talked about how media is transitioning into the paid, owned, and earned landscape and more importantly, the rent vs. own (audience) scenario.  In a world that’s becoming increasingly digital and platforms can help harness the audiences who engage with you (and your brand), then having marketing technology platforms will help you not only harness this audience, but it’ll allow you to segment, target, engage, and draw insights amongst many other things.

Gone are the days where we continually rent audiences from media companies and pay them significant dollars time and time again.  We should not have to do that continuously if we have platforms that allow us to engage with audiences, have them opt-in to participate with us (as a brand) and interact with them over time.  I’m not saying there is not a role for paid media as there certainly is a role for renting audiences to help us refresh out funnels.

Why this is so important for marketing and advertising technology is because most brands (and their respective agencies) are new to this.  An ad-server is not enough anymore.  Over the past few years with increased velocity, we are re-writing what it means to be a marketer from a technology perspective and using this technology to make ourselves more effective and efficient, which in turn, benefits the consumer.

The Golden Age might be here because many forward thinking strategic companies see the future and need to button and scale up their infrastructure.  The world is their oyster right now and we’ll continue to see additional acquisitions and mergers.

Google's Dominance and Why I Will Continue To Invest in Ad Tech

There have been a couple recent announcements in the marketing and advertising technology worlds.  Salesforce/Buddy Media last week, and now this week, DoubleClick Digital Marketing Suite.  For those of you not following the DoubleClick announcement, read here and here.  This morning, Digiday came out with a an article entitled, “Is Google Running Away With Ad Tech?” which I’d like this post to generally respond to.

Google is Intent Rich
As a media buyer, one of the best performance signals we have for buying media is Intent.  Murthy Nukala, CEO of Adchemy wrote a visionary piece recently that explained a bit about Intent and you can read it here.  Intent is way far down the purchase funnel and in a last click world, it generally gets all of the credit.  Being that Google is an Intent harvesting machine, it will continue to manufacture dollars.   Most of the Intent comes from its search engine, so the biggest risk to Google’s advertising dominance is if Google remains a top search engine.  As of now, it does not look like it’s going anywhere.

Google has Vision
I have a few very smart friends who have sold companies to Google for ad tech.  They are true visionaries and have a common vision.  Inside of Google, they are harnessing that vision and leading the way with it.  Neal Mohan has one of the best jobs in the world, IMHO.  He gets to execute this vision, not just talk about it, with Susan Wojcicki and continue to build one of the largest ad tech stacks we know of as an industry.

Google’s Enemy Is Themselves
At some point, which is unknown, there is a good chance a modular home falls apart because there is a stress fracture.  With Google, they are basically building a modular home with ad tech.  They are buying fantastic companies and piecing them together.  The recent announcement about rewriting their backend onto their own platform is extremely important, but one would have to think that mixed cultures and many different technologies will eventually be a potential kink in their armor.

There size is another reason to be concerned.  Publishers are realizing (some have realized a while ago) that Google is a big threat to them.  Google is the casino and knows both the dealer and the player.  They have the data.  This data can and will (might) be used against either party when it benefits Google.  This is a serious issue, essentially as Google continues to satisfy both the demand and supply side.  If publishers pull away, this means Google has less data.  The less data Google has, the less significant they become.

Google Needs to Watch the Government
We know that Google is big.  They are big enough that they need to seriously be concerned with how they are fronting to the industry.  In many circles, the term “monopoly” comes up.  From an entrepreneurial perspective, monopoly is pretty phenomenal because it means you’ve out executed every competitor and basically have won the war.  However, we know the USA doesn’t like monopolies and there needs to be competition in our economy.  Privacy concerns are serious and Google needs to keep these in mind going forward.

Why I Will Continue to Invest in Ad Tech
We believe that Google is strong.  There is no doubt.  Using a sports analogy, they are a team that you can bet on to make the playoffs each year and have a good shot at the Finals.  However, one has to bet against them.  There needs to be competition in the space and there are many companies impacted by Google’s dominance and won’t let Google take over the entire industry.  Each one of those companies, either direct or indirect competitors of Google will be stepping up their M&A game over the next 12-36 months to build an ad stack that’s comparable or better than what Google has.  Remember, in ad tech, features are very important – and Google with their early lead may have a legacy stack fairly quickly because the features they acquired might get old and stale.   This leaves the door open for many players.

Additionally, we don’t know where the next search engine might come from.  Twitter, Facebook, Amazon, Apple, DuckDuckGo (no cookies, I know), and maybe a few other players are building this.  If Intent breeds dominance in advertising, then these players cannot be overlooked.  Either Google buys them (probably not most of them), or they could be the foundation for the next big advertising tech companies.

Some of the players I’m watching to make moves are:  Apple, IBM, Adobe, Accenture, WPP, SAS Institute, Salesforce, Microsoft, Experian, ValueClick, Amazon, eBay, Walmart, Akamai, SAP and Oracle.

One Buying Platform for All Media

Back in June 2011, I wrote a post titled, The 87.5% Category According to Luma – Lots of Acquisitions.  The purpose of the article was to highlight that ad serving systems for online/digital media had a high propensity to be acquired or realize a significant exit.  87.5% of all ad servers on the chart had gone through an exit.  Not bad.

Over the last week of December, I spent some time at home and caught up on my favorite blogs and online content in between playing with my two kids.  In doing this, I spent time reading a December 20th post on AdExchanger by Google’s VP of Display, Neal Mohan.  While I’ve personally never met Neal, I have a lot of respect for what he’s doing at Google.  He has a great quote that I couldn’t agree with more:

We also know that advertisers and agencies ideally don’t want a separate buying platform for each type of media — they want a way to buy across all formats, and in 2012 I think they’ll get it. Real-time bidding (and by extension audience buying) has proven to be a transformative technology for buying desktop display — on our exchange, it currently accounts for 60 percent of all transactions. In 2012, we’ll start getting into that ballpark for mobile and video as well.

If you recall, when I wrote the 87.5% article, I highlighted an area in particular stands out to me as a killer opportunity:

If I personally was to start a company tomorrow, I’d probably create the next 3rd party ad serving system built for the future of all media (able to serve site-direct placements, social media and RTB) and include the opportunity for biddable, rich media, video, and full reporting & analytics.  I believe no ad serving system delivers superior reporting and analytics so this is an area that I’d specifically make sure I’d nail.

I think this is an area for massive innovation because the vision that the industry hasn’t recognized the full vision for the future… I believe that all media will be served, tracked, and optimized across all channels.  Television, print, radio, and out of home will all in some way or another be served, tracked and optimized.  This obviously cannot happen overnight as there are quite a few barriers and obstacles to go thru, but the opportunity is huge.  There is a reason why 87.5% of the companies in the ad serving segment have been acquired.

It looks like Neal and I are thinking the same thing and if any of you entrepreneurs are as well, I’d love to meet you.  This is an area that we are searching to invest in at kbs+ Ventures.  You can contact me here.

Marketing Technology behind $35 billion in holiday 2011 ecommerce sales

Ever wonder who is the marketing technology behind the $35 billion dollars in e-commerce sales this holiday season? If you are an agency, wall street analyst, marketer, optimizer or any other player in the digital media ecosystem, you probably want to read below.

I always tell my team at The Media Kitchen that you can learn a lot from what other companies are doing; the good, the bad, and the ugly… so study them.  On the web, it’s relatively easy to study companies and their respective infrastructure as the source code of competitors is only 1 click away.

I teamed up with my friends over at Evidon who own the Ghostery product and had them send me a data dump of 3rd party tags that were placed on 20 e-commerce sites (list below).  Note, the data I have is fairly reliable but not perfect, so I may have missed a partner here or there.  However, I do have over 150+ partners who had tags down on these 20 e-commerce destinations, so I feel I have a directionally accurate view of who was part of the marketing technology ecosystem for Holiday 2011.

Sites I tracked were Best Buy, CouponCabin, Sports Authority, LL Bean, Gap, Dicks Sporting Goods, Bed Bath & Beyond, SVPPLY, DSW.com, Modells, Zappos, Old Navy, Disney, Target, Walmart, Gilt, Sears, Amazon, NewEgg, and Piperlime.

I counted a total of 413 partner tags/pixels placed across these 20 sites (note, I only went to 1-2 pages per site and assumed tags would be similar across most pages).

Executive Summary (full report can be downloaded here)

  • Best Buy, CouponCabin, and Sports Authority properties contained 43% of all tags placed.  The top 10 of the 20 sites accounted for 85% of all tags placed.  I am actually surprised that Amazon didn’t fall into the top 3, but again, Ghostery told me they only had 3 tags down on their pages (Turn, DoubleClick, Google Analytics).
  • The top 3 tags placed across all 20 sites were Google Analytics, Omniture, and DoubleClick.  No real surprise here.
  • The biggest surprise IMHO is that Google+1 outranks Facebook and Twitter as social plug-ins that are embedded across these ecommerce publishers.
  • The DSPs are in-line with the recent Forrestor report so I didn’t find anything crazy in those numbers.
  • Google Analytics has 70% coverage across these 20 e-commerce sites.  Imagine the data that Google could/is collecting.  Just saying.

In order to digest this 1000+ cell data dump, I created a schematic whereas I broke down the product (such as Tag Management) and took the top companies and their % composition the 20 e-commerce destinations.  The link to the excel sheet is at the bottom of this post.

Web Analytics software:  Google Analytics (70%), Omniture (60%), Foresee (40%), Webtrends (15%), Yahoo Analytics (15%), Coremetrics (10%)

3rd Party Ad Serving:  DoubleClick (55%), Microsoft Atlas (25%), ValueClick MediaPlex (35%), MediaMind (5%)

Tag Management:  BrightTag (20%), TagMan (5%)

DSP:  AppNexus AdNexus (30%), Turn (25%), MediaMath (20%), Invite Media (20%),  AdNetik (10%), X+1 (10%), Lucid (5%), DataXu (5%), Rocket Fuel (5%)

Exchange:  Right Media (35%), AdBrite (15%), OpenX (10%)

SSP:  PubMatic (50%), Rubicon (25%), Admeld (10%)

Social Plug-Ins:  Google +1 (45%), Facebook (40%), Twitter (15%), AddThis (15%)

Site Optimization:  Omniture (60%), Monetate (20%), RichRelevance (20%), Visual Website Optimizer (15%)

I believe the Omniture & DoubleClick tag data above is a bit misleading because those are grandiose tags that can do many different things and without the right context, they could be categorized incorrectly.  I tried my best.

Conclusion

Google dominates pretty much up and down the marketing technology stack. I still think they should buy Adobe to become the monopolistic dominant player (to get Omniture), but I don’t believe the government will ever allow that.

I was actually surprised that Omniture didn’t have even higher composition of the 20 ecommerce players.

I couldn’t tease out DoubleClick AdX from their other tags so that’s why they weren’t included in the Exchange part.

And of course, since I work, play, and invest in the marketing technology ecosystem, I’m conflicted up the wazoo with many of the companies mentioned in this post as well, as, the data in the chart linked below.  I have done my best to tease out bias.  Please proceed with caution but honestly, I don’t think you need to.  Contact me if you are interested in discussing.

Thought you might find all of this data interesting.  I have included my chart here in case you want to download it and play with it.  The full report I put together is located herePlease remember to give proper attribution if you use it.

I’m curious to look at this data in 2012 and compare it to 2011 (I don’t have historicals).  I’m sure we’ll see some interesting changes.

Happy holidays.

Darren Herman is the Chief Digital Media Officer of The Media Kitchen (part of kbs+) and is President of kbs+ Ventures which is an early stage marketing technology institutional investment arm of the agency.  His tweets can be found at @dherman76 and blogging here at http://www.darrenherman.com

2010 Post Highlights

I’ve written a bunch of posts on this blog in 2010.   Not all are my favorites but below, I’ve highlighted the ones that are.  You can find a list of all-time favorite posts here ranging back to 2006.

Organizational Behavior

Data, Marketing Technology

Twitter & Social

Investing

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