There’s A $10 Billion Opportunity As Marketing Hits The Big Time

Pinterest Acquires Team From Hike Labs, Including Google Reader, Blogger Veteran Jason ShellenEditor’s note: Ajay Agarwal is a managing director at Bain Capital Ventures in Palo Alto where he focuses on early-stage SaaS and mobile investing.
Marketing is no longer the forgotten stepchild of enterprise software. Traditionally underserved and under-penetrated, marketing is finally receiving its fair share of attention by technologists, founders and investors alike. Gartner famously predicted CMOs would spend more on IT than CIOs by 2017. IDC estimates $32.4 billion in marketing technology spending by 2018, growing at 12.4 percent CAGR. Hundreds of new companies are emerging every year, and thanks to Scott Brinker, marketers now have their own dedicated technology conference.
Three years ago, I wrote a post that called marketing “the next big money sector in technology,” and predicted it will “give rise to several multi-billion-dollar companies.” At the time, Omniture had sold to Adobe for $1.8 billion but was the only marketing-focused technology company with an exit north of $1 billion. All other enterprise categories over the past 30 years have created several multi-billion-dollar software companies across functional application areas: SAP (manufacturing), Oracle (financials), PeopleSoft (HR), Siebel (sales) and Salesforce (sales/CRM).
What’s changed in three years?
While we have yet to see a dominant >$10 billion company emerge in marketing technology, we have seen tremendous changes and progress in this sector driven by digital, mobile, social, analytics and commerce technologies. We have also seen several big exits in the last three years. A quick snapshot:
CompanyValueAcquirerExacTarget$2.57 BillionSalesforceCriteo$2.54 BillionIPOResponsys$1.50 BillionOracleHubspot
Marketo$1.23 Billion
$1.07 BillionIPO
IPOEloqua $871 MillionOracleNeolane$600 MillionAdobe
Note: For public companies, these values are as of March 26, 2015.
The hottest standalone category to date has been marketing automation, which has become a “must have” solution for B2B CMOs. The two largest independent players, Hubspot and Marketo are both valued north of $1billion and are growing at rapid rates. Salesforce with its acquisition of Pardot is now a formidable player in the space as is Oracle through its purchase of Eloqua.
What’s next?
All of this progress now sets the stage for my next prediction: We will see the first $5 billion-plus marketing tech company emerge over the next four years (and likely more than one). Three key drivers will get us there:
Predictive analytics and machine learning: The sheer volume of data about buyers, channels and communities that marketers can now harness is astonishing – and it’s the largest opportunity ever seen for CMOs and vendors alike. With sales and marketing automation in place to provide core workflow and plumbing, an ecosystem of new startups and categories has emerged to deliver added value and insight across marketing functions and channels. The best of these companies use machine learning and data science to tap into the marketing and sales automation data sets – and troves of external third-party data – to deliver insights and capabilities. This is especially valuable for B2B companies, where lead times are longer and purchase decisions are more considered. Early pioneers in predictive marketing include Infer, Lattice and 6Sense*.Consumer identity and personalization: For B2C companies, identity is emerging as the backbone of user experience and digital commerce – similar to what lead management and marketing automation are doing for B2B. Most consumer purchases are quick, ephemeral in nature, and done with limited research. New B2C marketing competencies focus on user identity data and personalization, with a goal of having the right content and experience for each user (during the three seconds they are looking at that page on their tablet or mobile device). It’s the difference between a sale and a bounced user. Key players include Bloomreach*, Sailthru, Monetate, Optimizely*, Kahuna, and Appboy – all of which focus on optimizing web pages, mobile apps and/or email to drive the highest conversion and revenue per visitor.Consumer behavior and targeting: Beyond identity, consumer behavior data is becoming increasingly critical for B2C marketing and commerce – location, past purchase behavior, demographics, preferences, household information, etc. This challenge has become increasingly difficult in a cookie-free mobile world, which makes traditional desktop targeting techniques useless. As a result, marketers are relying on vendors that bring cross-device targeting capabilities and others that can ingest anonymous consumer behavior on your website. The best marketers are leveraging this rich information to build massive in-house databases of customer purchase and browsing history. Companies like Agileone, SmarterHQ, TellApart*, Retention Sciences and others are leading the way on this front.What this means for marketers
The core infrastructure is now in place to manage online and offline marketing: website and e-commerce management; customer relationship management; mobile applications; email marketing; and sales force and marketing automation.
The new frontiers for CMOs in the coming years will be data science, machine learning and behavioral insights, which then drives optimization and personalization. This represents the largest opportunity ever seen for both vendors and CMOs alike. All of which should set the stage for the first $10 billion-plus marketing tech company.
Note: 6sense, Bloomreach, Optimizely and TellApart are Bain Capital Ventures portfolio companies.

By: Unknown On 11:12

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Mobile Marketing Trends To Follow From The Israeli Elections

The Sharing Economy Is On The Brink Of Disrupting Business TravelEditor’s note: Gilad Bechar is the founder and CEO of Moburst, a global mobile marketing agency helping first-tier startups and brands grow their mobile business. He serves as a mentor to startups at Microsoft Accelerator, The Technion, Tel-Aviv University and Unit 8200.
The impact of mobile and social media on every aspect of our lives is nothing new, but certain events can really shine a light on how mobile has changed our way of conduct. The presidential elections do just that.
During the 2012 elections, mobile was already at the center of everything, but the smartphone industry was relatively in its diapers and smartphone shipment has since grown by almost 40 percent. We now spend more time and money on mobile devices and get the majority of content from them. These game-changing facts are about to transform the biggest game of all – politics.
To keep up with the ever-changing mobile arena, we have decided to take a look at how mobile is about to change our political process by examining the current political race in Israel, which has been a tech leader for many years now — particularly in the mobile media arena. We investigate the influence of mobile on the Israeli elections and learn a few lessons that will most likely be relevant to the presidential race towards the 2016 U.S. elections.
Media targeting is better than shaking hands and kissing babies
The key advantage of mobile media is the possibility of high-quality targeting, allowing advertisers to get a hold of an incredibly specific target audience. The clever campaign manager studies its audience and finds a sophisticated way to reach relevant users.
Parties’ media budgets are bigger than ever and almost every candidate hires dedicated agencies to do the job. Facebook’s mobile-only user base recently reached half a billion, and with new advertising platforms popping up all over the place, campaign managers can reach their target audience virtually every step of the way.
For instance, during the Israeli elections, one of the burning topics was youth’s inability to purchase an apartment. Parties that ran on a social platform would have been wise to target users searching for details on mortgage loans, or families looking to rent apartments on a budget.
Another example for clever media practice would be location-based targeting, which in the U.S. plays a particularly important role, given the electoral system. Parties can trace users in specific states where they know they should increase their advertising efforts and reach the right target audience with a custom message.
Speaking of messages, targeting specific groups should always be accompanied by the right creative content. Candidates should prepare many different versions to fit each segment specifically. This will enable candidates to highlight topics that are relevant to a certain group and let voters know that they are truly in the center.
Gamification turns politics into a form of entertainment
Sharp campaign managers are well aware that the battle over users’ attention has become more cutthroat than ever. To stand out, we’ve seen great usage of gamification techniques in the Israeli elections, with ads that are less focused on directly transmitting the message, and more on creating an experience that indirectly depicts this message.
Another great use of mobile during this election season was in crazy mobile games that were entertaining but also sent a very strong message. In one game, users were asked to play a “temple run” style game starring their favorite candidates. Other games presented a very specific agenda and were used to criticize the opposite party, but even those not focused on a specific candidate play an important role in encouraging people to vote and participate in the political discourse.
In other words, gamification helps turn politics into a more fun and engaging experience and allows parties to approach and become more relevant to a younger crowd.
Mobile video turns everyone into an activist
With U.S. mobile video ad spend doubling during the past year, the vast usage of video content during the Israeli elections should come as no surprise. Facebook native video is now at 3 billion views per day and other social networks are headed in the same direction.
Israeli candidates managed to generate attention and buzz by creating videos that were widely shared on social media. We’ve seen this media tool in play by basically every party, including orthodox religious ones.
Chances are the upcoming U.S. election will be video focused, as well, which will affect not only budgets, but also content. Video content tends to be more entertaining and less formal than what we are used to seeing on national TV. The boundaries between official messages and indie political activists’ creations are blending, and content becomes not only user-focused, but also user-generated.
With mobile becoming the device of choice for all age groups, campaign managers must pay extra attention and develop a mobile-first approach the sooner the better. We cannot predict the outcome of the U.S. elections, but we can say one thing for sure: It’s going to be interesting, and it’s going to be on mobile.

By: Unknown On 01:11

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Main Street Hub Lands $20M To Bring Social Media Marketing To Small Business

Main Street Hub, a company that helps mom and pop businesses run social media marketing, customer relationship management (CRM) and marketing automation recently announced it has received $20M in debt financing from Silicon Valley Bank.
The company has raised a total of $40M. The most recent funding before this announcement was $14M in Series B in January, 2014. It has 6000 subscribers who are paying an average of $350 per month using a tiered pricing model, according to company officials.
Most small business owners are swamped just trying to keep their businesses running. They have little time to deal with modern online marketing or monitoring their Yelp page reviews. That’s where Main Street Hub comes in.
For a monthly fee, Matt Stuart, co-CEO at Main Street Hub says his company does all the heavy lifting across online channels for these businesses.

By: Unknown On 01:11

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Alibaba’s Latest Marketing Campaign Supports Same-Sex Marriage

Alibaba marketplace Taobao will celebrate Valentine’s Day by sending gay couples to the U.S. and other countries where same-sex marriage is legal. To be sure, the event, We Do, is a publicity ploy like Alibaba’s recently announced drone pilot program. We Do, however, is much more notable because it is unusual for a Chinese company to publicly support gay rights.
Taobao, China’s largest online marketplace by far, will team up with Danlan, a gay-focused website, as well as advocacy groups including Beijing LGBT Center and PFLAG China, for We Do. Public votes will narrow down the 20 couples listed on We Do’s site to ten, who will receive a free trip to California, one of the states in the U.S. where same-sex marriage is legal.

By: Unknown On 03:57

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