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Cracking the code on podcast advertising for customer acquisition

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Of the various channels available to growth marketers, podcast is among the most misunderstood.

Brands like Dollar Shave Club, Squarespace, and ZipRecruiter have deployed podcast advertising for user acquisition for years, but it’s still a channel that flies under the radar. We have managed tens of millions of dollars in podcast ad spend for challenger brands and market leaders alike, and are eager to share some tricks of the trade.

If you want to test in a channel where early adopters are being rewarded with both attractive CAC and scale, here’s what you need to know:

  1. Podcast advertising is used very successfully as a direct-response channel with CAC on par with other consideration-stage activities. It is not just for awareness.
  2. Podcast reach is very good, reaching 51% of US audiences aged 12+ monthly.
  3. Ads read by hosts outperform canned “programmatic” ads.
  4. Tracking is harder than most digital channels and the cost to test the channel is higher than most digital channels.

Dive deeper on podcast ads and other growth marketing tips with Extra Crunch’s ongoing coverage of growth marketing, where Right Side Up was recently featured as a Verified Expert Growth Marketer. 

Who listens, who advertises, and why bother?

Podcast listeners are a sought after group – the audience trends towards educated, early adopters with a high household income. You can find this profile elsewhere, but what makes podcasts unique is that they are choosing to consume that particular content time and time again. The host becomes a trusted voice to deliver them not only interesting stories and banter, but information on companies as well.

Often podcast advertisers are newcomers or start-ups, and the podcast ad might be the first time the listener has heard about that company. Having the first touch with consumers be from a thorough, personal, and often funny host-read interaction is incredibly valuable and helps brands jump over the credibility hurdle. Compare that to an impersonal banner ad, and I’d choose a podcast ad every time. image2 1

Even though the term ‘podcast’ was coined in 2004, advertising in the medium has exploded in the last ~5 years. The IAB has been tracking podcast ad revenue since 2015, when the entire medium generated #105.7 million in ad sales. It recently released its third study of podcast ad revenue, which estimated the US market at $479 million in 2018, with growth accelerating to a projected  $1 billion+ by 2021.

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Andreesen Horowitz did a great investor profile on the space earlier this year, with a helpful rundown of the holistic ecosystem, from hosting mechanisms and platforms to the pace of podcast monetization.

Historically, the medium has been dominated by a mix of comedians doing their own thing, radio entities simulcasting sports shows, and otherwise popular shows that had a devoted niche following relative to other mediums. Most advertisers bought podcast ads as an extension of their other audio acquisition campaigns.

Podcasts go mainstream

Then Serial came along, in 2014, exploding into popularity and pop culture. They ran a MailChimp ad that had someone mispronouncing the name of the company as “MailKimp”, which was a funny inside joke for those in the know. Nina Cwik and David Raphael, co-founders of Public Media Marketing, explain the initial conversation around this now iconic spot.

“While discussing a launch sponsorship with sponsors there wasn’t a huge amount of interest in taking a risk on a new show even with the amazing This American Life provenance. MailChimp was committed to supporting Serial. The talented production team at Serial and This American Life created MailKimp and the sponsor was rewarded for believing in the show.”

Not only were they rewarded by being a launch sponsor of one of the most successful podcasts in history, but once Serial and the medium itself expanded, a loving impersonation of Serial host Sarah Koenig and the MailKimp joke eventually made its way into a Saturday Night Live skit. Serial also appealed to a female audience, helping to bring new listeners into the channel, and podcasters and advertisers followed.

Over the past 5 years, the space has diversified. We now see so many different shows with all flavors of true crime, news and politics takes that you don’t hear in the broader media picture, women talking to other women about literally everything, comedy and pop culture pods as diverse as Bodega Boys, Who? Weekly, and RuPaul: What’s the Tee with Michelle Visage, and a podcast to go with every reality and television show you can think of. There are too many shows to talk about; there are over 750,000 shows indexed by iTunes.

How to engage for growth advertising

So how do companies start testing in podcasts? And how do they do so successfully?

Start with a strong (but doable budget) and take your time

We advise companies to start with a test spend that you consider meaningful in the context of your other customer acquisition efforts. Initial tests in the channel that are properly diversified typically vary from $50,000 to $150,000 in media cost. If the idea of a testing budget in the high five figures makes you gasp, don’t rush it. If you under-invest, you run the risk of a false negative, i.e. you didn’t spend enough to validate performance, or a false positive; when you buy tiny shows, one or two sales may pay back. If you make media decisions at scale based on that data, you may find yourself in deep water. If the risk of testing a new channel and having a dip in your CAC is too great, we recommend you exhaust other channels, like Facebook, before jumping into the podcast space.

Podcast offers advertisers a low barrier to entry. Creative production is limited to producing copy points for hosts to use as they record their ad reads. However, it is quite manual relative to digital channels, and can take weeks to put into place. Most purchasing is done through a show’s sales representation or network, via calls and emails, and set in advance (sometimes way in advance depending on inventory levels). It entails RFPing multiple network partners, doing research and outreach to independent shows, gathering rates and evaluating content, and finally making decisions based on budget and inventory availability. We often describe this as the media puzzle – making sure that the ideal shows, with favorable pricing are available when you want them to be. This can take time and some back and forth with your network rep to set in stone, so give yourself room to plan ahead.

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What’s the media landscape look like and how do you pick shows? 

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Image via Getty Images / venimo

We buy with a lot of direct shows, sales representation firms, and ad networks. We’re starting to see the beginnings of programmatic and exchange-based inventory become available, but it’s largely impression-based media, which isn’t yet a proven tactic that direct response-oriented advertisers can consistently use for customer acquisition. There are some managed service-like buying partners in the space, that work to varying degrees of efficiency for customer acquisition.

When it comes to choosing what types of shows to partner with, beyond budget and availability, it’s important to remember the obvious choice may not be the best one.

One of the most consistent, and pleasant, surprises in podcast advertising is how well shows that are seemingly unrelated to a product work well for customer acquisition. We’ve worked on products that had a primary target demographic of suburban moms, but guess what? Gamers want to stay at home and order snacks and food delivery, too; they have disposable income and are harder to reach via traditional channels.

If you’re advertising a product targeted to parents, you shouldn’t just test into parenting shows, you should also consider testing into shows with hosts who are parents, but have content not at all or tangentially related to parenting, like Your Mom’s House, with Tom Segura and Christina Pazsitzky. Sure, it’s a comedy podcast, and it’s NSFW (and hilarious). They’re also human parents who they do amazing reads, and their fans are legion.

Ryan Iyengar, CMO of HealthIQ, notes that “hosts with wildly different backgrounds were able to find a through-line to connect ad reads with their audiences, regardless of product line.” Of course, contextual advertising is worth consideration, and there are sometimes unique opportunities, but most successful shows aren’t a bullseye for content.

We’ve also seen the inverse, on contextual fit; food products can either do amazing or not well at all on food-related podcasts. If you have a food product with mass appeal, but one that (for example) many home cooks may already be familiar with, you may be better off doing just about any other popular genre of shows besides food.

Plus, these hosts are pros; they’ve been doing ad reads for everything from mattresses to meal kits for years. They know how to talk about your product in an engaging way.

Doug Hoggatt, the VP of Marketing at Betabrand, agrees, mentioning he would also coach new advertisers to “take the time to test across genres and hosts, you’ll be surprised at the results.” Iyengar is also the former VP of Marketing at ZipRecruiter; if you’ve ever heard a podcast, you may have heard the company advertised once or twice. He also notes, “[regardless of] content of the show, audiences can be interested in all sorts of topics, and are still potential customers. Yes, even hiring managers listen to comedy podcasts!”

Many business-to-business (B2B) advertisers do well in the channel, in part due to higher allowable CAC and high lifetime value (LTV). And the same point about show selection holds true for those audiences, as well. Visnick noted, “[HoneyBook] originally focused on testing industry-specific podcasts as those seemed to be the most natural way to target our prospective customers. We discovered that by diversifying our podcast mix into non-industry content we could still reach our target audience while also growing our reach and overall program performance.”

If we hear something that we think can help us at work, we’re amenable to that message, especially when it comes from our favorite host. Having an open mind to testing has helped so many advertisers unlock additional shows, and possible customers. You can take those insights back to other channels, too, and begin to integrate your campaigns and establish cross-channel frequency.

Pricing in the channel is unstable, and demand-based because inventory is finite; effective CPMs for host read, embedded mid-roll advertisements — by far, the most consistently performing ad unit for customer acquisition in the space — vary from $10 to $100. Yes, really.

Worrying too much about CPMs could mean that you’re leaving behind some of the best inventory in the space. So while it could make sense to cut higher CPM placements from a media plan, you want to be cautious. You could inadvertently cut out potential volume drivers or otherwise highly effective placements.

Allow for the host’s personality to shine through

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Image via Getty Images / TwilightShow

The listener is there for the hosts. They relate to them, laugh with them, or laugh at them. They come to expect a performance from them, and often that performance bleeds into the ad reads. Whether it’s a semi-NSFW jingle about MeUndies from Bill Burr, or Joe Rogan recommending his mind-blowing NatureBox snack combination, or Levar Burton delivering an oh-so soothing Calm read.

Alan Abdine, Senior Vice President of Business Development for Rooster Teeth, a network with geeky, gamer shows with a hint of irreverence, said “the best ads are the ads that are organic, natural, and originate from the voice of the show talent. When brands allow our hosts to be themselves, there are more opportunities for entertaining side stories and commentary related to the brand.”

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He continues to say his “belief is that if an advertiser is willing to spend money to reach out audience, then let us be the experts on that audience and let us use our own voice to share their message and talking points!  They will always get better results in that scenario.”

There is a certain special trust that goes into podcast ads. And to allow hosts to be themselves while also being a positive brand advocate often mean striking a balance between scripting and giving space. The most commonly purchased ad unit for customer acquisition advertisers is a host-read, embedded, mid-roll advertisement, typically :60 in length, but many hosts go over.

Overly scripting the copy can lead to an ad sounding inauthentic and infringe on their creativity. Kate Spencer, the co-host of Forever 35, notes that “often there are a lot of required talking points to hit in a short amount of time. We’re always happy to oblige, but I think it takes away from the organic and conversational nature of the ad, which is what makes podcast advertising especially unique. ”

On the flip side, not scripting enough could lead to a disjointed read where the host is trying to piece value props together on the fly. Nick Freeman, Chief Revenue Officer at Cadence13, explains that “some hosts do like the perfectly written out :60 script, while others like bullets they can riff off of.” Because podcast campaign test across multiple shows and personalities, it’s best to find a starting point in your copy where hosts can be guided, but not stifled. Freeman says “that doesn’t necessarily mean trying to make jokes for comedy hosts, for example, so much as it’s giving the hosts who do well with it the freedom to ad-lib.”

And for those that want to get a little more creative, the space is primed for custom integrations. Recently DoorDash partnered with Rooster Teeth for an ad on a livestream in celebration of a new game their studios were releasing. Since there was a visual element, DoorDash and Rooster Teeth partnered on a creative spin to the ad.

Instead of the typical copy, food would be delivered to the group of hosts while recording. Grant Durando, Senior Marketing Consultant at Right Side Up, works with DoorDash on their podcast campaign and stewarded this unique partnership. “[Rooster Teeth] approached us with the opportunity to engage with the live stream in a deeper way than just a regular podcast ad. It was definitely an unorthodox integration, but exciting to be in front of the right audience for DoorDash, at scale, and in a meaningful, memorable way. Many conversations about chicken nuggets later (which I never thought would be part of my job), Rooster Teeth and Vicious Circle delivered a superb ad experience, [integrating] multiple brand mentions and actually making DoorDash a part of the content itself.”

Zack Boone, Senior Director of Sales at Rooster Teeth, added there is, “nothing better than having clients that understand how impactful utterly stupid things like this can be for a brand.” DoorDash “[offers] industry-leading selection to our customers,” said Micah Moreau, VP of Growth Marketing at DoorDash. “It was incredibly effective to bring the DoorDash experience to life with Rooster Teeth in a highly differentiated, yet relevant way.”

How do you measure response?

Ads almost always end in some sort of call to action, like use the show’s promo code to save money, or visit a URL to get a free trial of a product for listeners of the show. It’s a way for shows to get credit for their listeners taking some sort of action, usually a purchase, related to hearing the ad.

And it’s how advertisers can figure out if their ad investments are paying back, too. Along those lines, Hoggatt was happy to see “how direct response the channel could be. I was surprised at the lift in site visits and follow-on orders that correlate so closely to when our podcasts drop.” Consumers have been conditioned to listen for that call to action at the end of an advertisement so we can measure a direct response in the channel.

That isn’t to say podcast advertising should displace a highly effective channel like paid social or paid search in your paid marketing testing priorities. We often ask advertisers information about their overall CAC or CPA  from other paid marketing efforts like Facebook or Google advertising, and use that data to benchmark target CAC for podcast.

As a general rule of thumb, if you can’t make Facebook or Google work for customer acquisition at meaningful scale, think twice before you engage in testing podcasts at a scale meaningful to your business. But if you’re looking for demand generating channels, podcast is an excellent contender.

“The success we’ve seen from podcast advertising has proven that we can drive sales through paid media outside of “traditional” direct digital response campaigns,” said Visnick. “We’ve significantly grown our podcast budget every quarter since we started testing the channel and it’s now a core part of our overall acquisition strategy and an important part of our media mix.

Don’t under-account for breakage or indirect activity

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Image via Getty Images / Olivier Le Moal

Another challenge for advertisers that aren’t used to offline channels is managing indirect activity, also sometimes called breakage. It’s imperative to look at indirect activity to help triangulate response, as another way to get a false negative is to only look at direct response, i.e. direct redemptions of a promo code or sales from only users who visited the vanity URL.

A decent analog is like view-through conversions, but without the technology enablement. You can tell, via tracking, what actions site visitors have taken after exposure to ads on Facebook and Google, etc.

However, there isn’t a way for a consumer to tap or click on your podcast ad, so you don’t have a direct action correlated to ad download or exposure, nor can you track indirect activity (view-through) via pixels or other technology enablement. The aforementioned promo code/vanity URL combo is what generates that direct response.

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To get around this breakage and triangulate a full response, advertisers commonly use a post-conversion attribution survey, colloquially referred to as a How Did You Hear About Us? or HDYHAU survey. This allows for a crude, but effective, translation of the impact that podcasts had on that user’s activity.

It helps you determine how much of the activity you’re capturing in paid search, for example, may have actually been driven by podcasts, streaming audio, or television. It’s self-reported data from users, sure, and it can feel a little shaky when you’re used to more precise digital measurement, but it’s how virtually every scaled advertiser in the channel has discovered a path to scale.

It also helps you determine benchmarks before you get into other channels, and can provide a solid look at multi-touch attribution if the survey is designed with best practices, and served to enough of the population to achieve stability.

Why can’t we use measurement techniques from other mediums?

We already talked about why, even though podcasts are digital audio, we can’t track conversions digitally (we know, it’s a little crazy). Unlike television, where you can use spot-based attribution, or radio, where you can achieve consistent ad exposure and but according to average quarter-hour (AQH) ratings, there’s a delay in both download of an episode and media consumption.

For advertisers, that means performance comes in over time, and it takes a minute to build reach and frequency (R/F). You may see very little activity for the first week or two of a campaign, and then as R/F builds and crescendos, you’ll see conversion activity catch up. That’s when you can start to get a solid picture of return on ad spend (ROAS); you should have structured your tests so you have a good sense of performance by the third or fourth drop with a show.

Looking at results sooner is possible but largely inadvisable. “Give it time,” says Dan Visnick, CMO at HoneyBook, “It can take a few weeks to see the impact from a single podcast, and months to build a strong portfolio.”

One of the biggest mistakes new advertisers in the channel make is getting a false positive, by testing into tiny shows that back out because 2 people bought their product, and then quickly scaling in the same genre only to find out that the content doesn’t scale.

False negatives are also common, when advertisers get cold feet in the first few weeks of an integration, and cancel shows after one ad insertion in a single episode. The channel requires diligence in testing, and if you have other business challenges to navigate, using digital growth channels can help iron out your messaging, landing pages, etc. before you launch offline channels.

Although you may have honed your messaging in other channels, you should expect to be flexible when it comes to podcast creative.

Opportunities to expand to other audio acquisition opportunities

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Image via Getty Images / Anastasiia_New

Positive signals in podcast campaigns can also indicate that other audio channels may be ripe for testing, which can help diversify your marketing mix and minimize the pressure on individuals channels. Hoggatt says his “success in podcast advertising proved that it is possible to invest in offline channels and find measurable success.”

SiriusXM and streaming platforms, whether pureplay like Pandora or Spotify, or aggregators like Westwood One and ESPN, are great next steps for advertisers who see the right signals in podcast. For SiriusXM, it’s a high household income audience that are used to paying for a subscription (any subscription model companies out there?), and streaming audiences are choosing to listen to their content, similarly to how podcast listeners choose their content. The podcast landscape is the perfect arena to play in to learn more about how your brand works in offline media and allows there to be a stepping stone into other mediums.

Be good stewards

We know that podcast advertising can have a powerful impact on the marketing mix for companies of all sizes. As more and more players get involved in the space, it benefits all involved, from advertisers, to networks, to marketers.

It’s rare to have an opportunity to participate in a nascent medium, and be good stewards of one of the last remaining mediums on earth with finite inventory and listeners who actually respond to ads. And along the way, we hope to change the way people think about traditional offline media channels, like how they can be held to high growth performance standards, and where they intersect with popular digital growth tactics like paid social.

You’ll have to get creative, but with some trust and patience, and adherence to best practices, advertisers can reap significant benefits and customer acquisition, at scale, from podcast advertising campaigns.

9 things growth marketers should do when getting started:

  • Create the team (and time!) needed to execute a campaign, whether in-house or via partnership with a subject matter expert like a consultancy or agency
  • Learn the language of podcast advertising, terms like download carry a lot of baggage and understanding them can impact your campaign’s performance
  • Budget your initial test(s) appropriately to avoid a false negative or positive result
  • Have an open mind on show selection; make sure you test across multiple genres and formats
  • Measure direct and indirect activity, to triangulate performance and business impact, and make optimizations and decisions on renewals
  • Support, don’t stifle, the personality of the show hosts
  • Get comfortable getting creative, and take time to onboard hosts
  • Keep an eye out for additional opportunities, not only in podcast, but in other audio channels as well
  • Be a good partner to shows, networks, and others in the space. It’s ours to nurture

MARKETING

What is marketing automation?

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What is marketing automation?


Marketing automation software can improve marketing productivity and increase lead quality. Here’s what you need to know before adopting a marketing automation platform.

Marketing automation is the use of software and web-based services to execute, manage and automate repetitive marketing tasks and processes to more effectively market through multiple channels (i.e., email, mobile, social media, and websites). Marketing automation focuses on the definition, scheduling, segmentation and tracking of marketing campaigns, allowing the marketing and sales organizations to nurture leads with highly personalized content aimed at attracting and retaining customers.

Today, marketing automation is one of the core activities of a marketing department — whether for a small local business or a large consumer or B2B enterprise. But the platforms that power these activities continue to evolve.

Estimated reading time: 13 minutes



What is marketing automation?

Investments in marketing technology continue to be a priority for businesses across the board, as they strive to meet increased demands for personalization and a need to collect, authenticate and analyze rapidly increasing amounts of consumer data to improve the customer experience (CX). For B2B players, this often means using a marketing automation platform.

Most marketing automation solutions provide tools for email campaign development and execution (including landing pages), as well as lead capture, scoring and nurturing. The platforms also typically provide centralized marketing databases and a basic level of reporting on web traffic, visitor behavior and campaign results.

Combined, the core features offered by most marketing automation platforms profiled in this report include:

  • Email marketing and landing page development;
  • Lead management (i.e., capture, scoring and nurturing);
  • Native CRM integration; and
  • APIs or app marketplaces for faster martech system access.

The more basic functions of marketing automation have become somewhat commoditized, so platform vendors mostly look to differentiate their offerings based on the ability to scale (especially to new marketing channels), usability, ease of implementation and customer experience features. One area growing especially quickly involves the use of artificial intelligence and machine learning to suggest audiences or messaging.

Platform vendors are also looking to differentiate themselves by offering more support for increasingly sophisticated customers who have adopted the software and who are looking to justify the investment by proving ROI.

All of this means market is quickly evolving, as marketers demand integrated marketing functionality that rapidly translates into bottom-line return. Vendors continue to add more advanced features to provide marketing end-users with the ability to build, track and manage campaigns across channels and/or devices, and monitor the flow of leads as they move from marketing to sales.

These features include, but are not limited to:

  • Dynamic content generation (email, landing pages and/or website);
  • Email deliverability tools;
  • Account-based marketing (ABM);
  • Mobile marketing;
  • AI-based predictive analytics; and
  • Social/lead profile integration.

Dynamic content generation

Virtually all marketing automation platforms provide the ability to create, send and measure personalized email campaigns. Where they differ is in how email, landing page and website content created and personalized. Some vendors offer wizard-based campaign design or content templates, while others provide a more customized approach.

There are also differences in static vs. dynamically generated content, which adjusts on the fly as prospects interact with a website or form. Progressive profiling is often offered to pre-populate forms with known data and uses a drip approach to capture additional prospect information each time they interact with campaigns.

Message deliverability is also an important factor to consider. Some B2B marketing automation vendors offer dedicated IP addresses to improve deliverability, and/or monitor deliverability by including their own email deliverability services or those from partners. Email previewing is an advanced function but may be critical to marketers that want to reach their audience through mobile devices and see what their message will look like on smaller screens.

The market is quickly evolving, as modern marketers demand integrated marketing functionality that rapidly translates into bottom-line return.


New features are making marketing automation platforms more powerful than ever. Learn about trends and capabilities of marketing automation software in the latest edition of this MarTech Intelligence Report.

Click here to download!


Lead management

Lead management comprises three functions: lead capture, lead scoring and lead nurturing. Leads are captured from a variety of sources that feed the marketing automation database, including (but not limited to) website visitors, social media, paid digital campaigns, email marketing respondents, trade show attendees and purchased third-party lists. Tools will vary based on the ease with which additional lead sources can be captured, such as through an open API, or whether the software offers landing page optimization.

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Lead scoring assigns a value to each lead based on a predetermined set of rules or criteria. Traditional lead scoring models are generally based on two sets of data values: behavior (i.e., site purchases, browsing, social posts) and demographics/firmographics. Many digital marketing automation tools now offer predictive scoring driven by machine learning, which can incorporate hundreds of data points by sourcing websites, social networks and internal systems such as the CRM and marketing database itself to calculate scores.

Lead nurturing is the process of keeping prospects engaged with the brand through periodic, personalized communications or campaigns until they are ready to buy. Marketing automation software may offer a number of pre-built nurturing steps or actions, as well as allow users to customize their content and process. These efforts are meant to build a relationship between the brand and its prospects, and drive interaction with sales if and when the prospect is ready.

Predictive analytics

Virtually all of the marketing automation platforms profiled in this report provide a standard set of analytics that track quantifiable data such as website visitor activity, pages viewed, time spent on site, emails opened, content downloaded and campaign responses. More vendors are offering predictive analytics and models based on machine learning, which uses algorithms to process data and surface trends or insights that enable marketers to customize visitor experiences and marketing campaigns.

Several platforms have invested in artificial intelligence (AI) to go a step beyond machine learning and use technology to “mimic” human intelligence and recommend marketing actions or outcomes. These may include highly personalized website content or product recommendations based on analysis of consumption trends, on-site behavior, firmographics and CRM data. Other vendors rely on plug-and-play integration with predictive analytics tools to offer greater analytics and personalization capabilities.

Mobile marketing automation

Creating an engaging experience for mobile prospects and customers is a must-have capability. As a result, many B2B marketing automation software include responsive templates for email, landing pages and web forms. Several vendors integrate with email testing tools such as Litmus, to allow users to preview email marketing messages across email clients and devices.

More advanced mobile marketing features include SMS/texting, in-app marketing and remote platform management from mobile devices. In-app marketing features can include “push” notifications or ads based on geography (i.e., geo-fencing or beaconing) or during events. Marketing automation vendors have also expanded platform access to mobile users, moving beyond automated alerts and remote data collection to full platform management.

Most marketing automation software profiled in this report provide a standard set of analytics that track quantifiable data such as website visitor activity, pages viewed, time spent on site, emails opened, content downloaded and campaign responses.

Lead nurturing is the process of keeping prospects engaged with the brand through periodic, personalized communications or campaigns until they are ready to buy.

Account-based marketing (ABM)

Aligning marketing initiatives with sales teams has become a leading account-based marketing (ABM) priority for marketers. The goal is to target marketing programs to prospect or customer buying teams, rather than individuals (who may have moved into new positions or firms.) Most of the time, a B2B buyer is not a single person but a buying group. The larger the purchase, the more people and departments are involved. Marketing automation vendors continue to add new ABM features to their platforms to enable marketers to address the buying group as well as individual members, including enhanced account nurturing and predictive scoring capabilities.

Social/lead profile integration

Most of the B2B digital marketing automation vendors profiled in this report provide some level of social media publishing, sharing and tracking within the platform for networks such as Facebook, Instagram, Twitter and LinkedIn. Some platforms provide more advanced social media tools to monitor social posts and add social behavior to lead profiles, often using social engagement as a scoring factor. Other platforms enable the use of social media sign-on to capture social profile data and build lead profiles.

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Native CRM integration

With more businesses seeking to align marketing with sales, native or out-of-the-box integration with CRM systems has become a critical feature for marketing automation systems. Salesforce, Microsoft Dynamics 365, Oracle NetSuite and SugarCRM are some of the most commonly available connectors.

Data is synchronized between the two systems and shared in both directions at frequent intervals. For example, data that is added by a sales rep to an account record in the CRM will be automatically added to the record in the marketing automation tool for marketing end-users to view and act upon, as well.

Third-party software connectivity

B2B marketing automation vendors continue to open their platform architectures through APIs and app marketplaces to offer customers access to an expansive array of third-party software systems. The app marketplaces provide faster “plug-and-play” access between the systems, although there may be additional fees to purchase the marketplace apps.

If a preferred app is not available on a digital marketing automation vendor’s marketplace it doesn’t mean that the two systems won’t connect – it means that some customization will be required. API use does incur additional charges, generally on a per-call basis for each data download

Proactive recommendations based on AI

Martech vendors in many categories, including B2B marketing automation, are working to incorporate functionality that smooths the workflow for marketers using their software. One significant focus is providing users with proactive recommendations or suggestions for best next steps based on aggregated data and historical usage patterns.

Why do you need a marketing automation platform?

Marketers at companies of all sizes can gain these benefits from a marketing automation platform:

  • Increased marketing efficiency. Automating time-consuming, manual tasks around content creation, management and personalization; campaign scheduling and execution; data hygiene (i.e. duplicate or inconsistent data residing in various silos); communication with sales; and lead nurturing saves time and improves productivity.
  • Enhanced ability to generate more and better qualified leads. Marketing automation can combine multiple criteria, including demographic, firmographic and behavioral data (pages visited, downloads, filled out forms) with a lead scoring system to generate and identify sales-qualified leads.
  • A multichannel view of prospect behavior. Today’s digital marketing automation platforms are integrating multiple channels and devices – including social media and mobile — to create more comprehensive prospect profiles and holistic views of prospect behavior.
  • Better alignment of sales and marketing goals. Marketing automation software can help align sales and marketing efforts to ensure that sales reps are working with sales-ready leads. By working cooperatively to set scoring parameters and define qualified leads, sales and marketing become one team. Marketing works on building relationships with early stage leads to enable sales to focus their efforts on the most highly qualified prospects.
  • Improved lead conversion and ROI. Numerous studies have found that using a marketing automation system can increase conversions. Forrester found that B2B marketers implementing marketing automation experience a 10% increase in their sales-pipeline contribution. Marketing automation can result in a 15% increase in sales productivity as well as a 12% decrease in marketing overhead, according to tech research firm Nucleus Research.

Explore marketing automation solutions from vendors like Marketo, HubSpot, Salesforce and more in the full MarTech Intelligence Report on marketing automation platforms.

Click here to download!


The role of marketing automation platforms

In May of 2019, Forrester’s Laura Cross, VP and principal analyst for demand- and account-based marketing, speculated that MAPs have “not evolved to keep up with the needs of the modern demand marketer.” Indeed, marketing automation platforms are so well-established as to be rarely discussed. For example, it’s difficult to find independent projections on marketing automation spend, with the latest numbers from Forrester projecting global spend to reach $25.1 billion by 2023, up from $11.4 billion in 2017. However, that was published in April of 2018 as its Marketing Automation Technology Forecast, 2017-2023.

As of yet, though, there’s no sign of marketing automation platforms going extinct. However, companies in the MAP category expanding into areas like “multimedia marketing hubs” or “CRM lead management” or “account-based marketing.” Notably, marketing automation platforms had no spot at all on Gartner’s Hype Cycle for Digital Marketing, 2021. Could this be because it has already transitioned to what Gartner calls the “plateau of productivity”?

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Where marketing automation providers seem to be giving up a little bit of territory is from customer data plaforms, which are sometimes taking over the data management and audience segmentation tasks previously handled by MAPs.

At the same time, these CDPs also still feature integrations with marketing automation platforms because they still perform functions that other systems lack.

Will CDP’s replace marketing automation platforms?

The must-have, much-hyped customer data platform (CDP) appears to have its eyes on B2B marketers, promising to handle vast amounts of data to deliver highly-personalized customer experiences. 

Adobe’s Real-time CDP announced new features aimed at B2B brands in November 2020, which include a pre-built connector to its B2B Marketing Automation Platform, Marketo Engage. Dun & Bradstreet, with its D&B Lattice CDP, also understandably has a primarily B2B focus.

Though CDP platforms are still relatively new, adoption has been rapid and these tools could eventually pose a threat to marketing automation platforms as they provide some of the same tools and functionalities.

Who’s who in B2B Marketing Automation: The vendor landscape

The enterprise B2B marketing automation market is concentrated among a few cloud vendors, including Salesforce, Oracle and Adobe. Acquisitions by these players aimed at consolidating their positions at the top of the market have now been largely integrated.

Oracle made its acquisition of Eloqua in December 2012, becoming the first to add this capability to its offerings. Salesforce followed by adding Pardot in 2013 when it acquired ExactTarget, which had purchased Pardot the year before. The foundation of Adobe’s capabilities in the space is its 2018 purchase of rival marketing automation platform Marketo for $4.72 billion. It had previously bought Magento Commerce for $1.68 billion.

2019 saw a great deal of action in the space. The year saw Acoustic formed as a standalone company after IBM spun off its Watson Marketing operation. IBM’s Unica marketing automation platform went to HCL Technologies that year.

Among independent martech providers that year, we saw the acquisition of Mautic by open-source cloud platform Acquia for an undisclosed sum in May of 2019, only to have the parent purchased by Vista Partners in September for $1B. Also in May, SugarCRM picked up Salesfusion and re-branded it Sugar Market, in a deal in which terms were not publicly disclosed.

The pandemic year of 2020 saw acquisitions of smaller players, for the most part. CRM company Pipedrive purchased Mailigen for an undisclosed sum in March of 2020. Facebook picked up Kustomer, largely described as a CRM firm but also boasting messaging automation functionality, in November 2020 for a reported $1 billion.

December 2020 saw marketing automation/attribution player Springbot acquire Matcha, giving it content management capabilities. Meanwhile, Thryv Holdings acquired Melbourne, Australia-based Sensis in March 2020, rebranding it as Thryv in September 2021.

Date Transactions
2021 – Maropost acquires e-commerce platform Neto in March 2021 for $60M plus additional consideration,
subsequently rebranding the platform Maropost Commerce Cloud.

– Constant Contact purchases SharpSpring for $240M, adding to its stable of offerings for SMBs.

– ActiveCampaign raises $240M in Series C funding that values it at more than $3B, following a 2020 round of $100M. The company says it plans to invest in product development, expansion and building its partner ecosystem.

2020 – Springbot buys Matcha. Deal terms weren’t disclosed.

– Facebook acquires Kustomer for a reported $1B.

– Pipedrive buys Mailigen for an undisclosed sum. Thryv Holdings buys Sensis for $200M,
later rebranding it as Thryv.

2019 – Acquia acquires Mautic (terms not disclosed). Vista Equity Partners later (Sept 2019) buys Acquia for $1B

– SugarCRM buys Salesfusion (undisclosed amount); rebrands it to Sugar Market. The acquisition followed the company’s buy of Collabspot and preceded its purchase of Corvana. These units are now called Sugar Connect and Sugar Discover, respectively.

– Mailchimp acquires Sawa (undisclosed sum)

– Infusionsoft rebrands as Keap; launches CRM

– j2Global acquires iContact for $49M

2018 – Salesforce acquires Rebel (undisclosed sum)

– Infusionsoft (now known as Keap) secures $20M in Series E funding led by ORIX USA Corp.

– Adobe acquires Marketo for $4.75B

Salesforce acquires Datorama for $800M

– Adobe acquires Magneto Commerce for $1.68B

– Salesforce acquires Mulesoft $6.5B and CloudCraze (undisclosed sum)

Source: Third Door Media, Crunchbase

There will likely be more acquisitions and positioning shifts to come, as marketing automation capabilities are combined with categories like CRM, lead management and campaign automation.

The consolidation kept coming in 2021, with Maropost acquiring e-commerce platform Neto in March 2021 for $60M plus additional consideration, subsequently rebranding the platform Maropost Commerce Cloud. In September, Constant Contact purchased SharpSpring, adding to its stable of offerings for SMBs.

Get the in-depth scoop on B2B Marketing Automation in our buyer’s guide. Download it now!

 


About The Author

Pamela Parker is Research Director at Third Door Media’s Content Studio, where she produces MarTech Intelligence Reports and other in-depth content for digital marketers in conjunction with Search Engine Land and MarTech. Prior to taking on this role at TDM, she served as Content Manager, Senior Editor and Executive Features Editor. Parker is a well-respected authority on digital marketing, having reported and written on the subject since its beginning. She’s a former managing editor of ClickZ and has also worked on the business side helping independent publishers monetize their sites at Federated Media Publishing. Parker earned a master’s degree in journalism from Columbia University.



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What is a customer data platform (CDP) and why do marketers need one?

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What is a customer data platform (CDP) and why do marketers need one?


A customer data platform, usually called a CDP, is a marketer-managed system designed to collect customer data from all sources, normalize it and build unique, unified profiles of each individual customer. The result is a persistent, unified customer database that shares data with other marketing technology systems.

The idea of a single view of the customer has been on marketers’ wish lists for years. But disruption caused by the global COVID-19 pandemic has raised interest in precisely the types of solutions that CDPs deliver, which includes that single-view of the customer. With pandemic concerns spurring the movement of customer interactions – both B2B and B2C – to digital channels, marketers are increasingly interested in technologies that collect data from those interactions, unify them, deliver insights and enable campaign orchestration.

CDPs enable marketers to create a single view of the customer by gathering data from software deployed
throughout the organization. High expectations, along with the proliferation of possible customer touchpoints, make cross-device IDs and identity resolution — the ability to consolidate and normalize disparate sets of data collected across multiple touchpoints into an individual profile that represents the customer or prospect — critical for helping marketers, sales and service professionals deliver the ideal total customer experience. CDPs offer this consolidation and normalization and also make the data profiles freely available to other systems that deliver campaigns, webpages and other interactions.



What is a customer data platform (CDPs)?

As the marketer appetite for CDPs has grown, existing companies with various backgrounds — from tag management to analytics to data management — have seen the opportunity and refashioned themselves in the CDP mold. Meanwhile, others have started up with the CDP category in mind from the start, and some well-established players have responded to market pressure and developed a CDP capability.

A CDP is not a CRM, DMP or marketing automation platform. A CDP provides a unified, persistent customer database that provides data transparency and granularity at the known, individual level. A CDP can identify customers from many different data sources by stitching together information under a unique, individual identifier. The CDP then stores its own copy of the data.

CDPs also give marketers control over customer data collection, segmentation and orchestration through native (out-of-the-box) integration that minimizes the need for IT or developer involvement. And lastly, CDPs offers data integration of both known and anonymous customer data with any external source or platform, including CRM, point of sale (POS), mobile, transactional, website, email and marketing automation.

We support the CDP Institute’s definition of a “RealCDP,” which requires it be able to do the following five things:

  • Ingest data from any source.
  • Capture full detail of ingested data.
  • Store ingested data indefinitely (subject to privacy constraints).
  • Create unified profiles of identified individuals.
  • Share data with any system that needs it.

Virtually all of the CDP vendors that meet that criteria provide the following core capabilities:

  • Data management (collect, normalize and unify customer data in a persistent database),
    often after IDs have been matched by other systems.
  • Features designed for use by the marketing organization and other departments, without the
    aid of IT or data science resources. (Though some functions, like building connections to other
    platforms and performing sophisticated data modeling, still require additional resources.)
  • Connections to and from all external systems on a vendor-neutral basis.
  • Structured and unstructured data management.
  • Online and offline data management.
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CDP vendors differentiate by offering more advanced capabilities that include, but are not limited to, the following:

  • Native identity resolution to stitch customer data snippets from disparate sources.
  • The number and breadth of robust pre-built connectors to other martech systems. The near-universal availability of APIs means connections are always possible (with more or less developer involvement), but offering pre-built, tested integrations adds value.
  • User interface (UI). The vendors differ in the user-friendliness of their interfaces and the methods people use to do things like create segments, view profiles, etc.
  • Analytics, including those powered by machine learning and artificial intelligence, that surface insights, enable journey mapping, audience segmentation and predictive modeling.
  • Orchestration for personalized messaging, dynamic interactions and product/content recommendations.
  • Compliance with vertical industry and international data regulations.

Now, let’s look at the key considerations involved in choosing a CDP.

Customer data management

Data collection and maintenance is a core CDP customer data management platform function. All CDPs provide a central database that collects and integrates personally identifiable customer data across the enterprise.cFrom there, however, CDPs vary in their abilities to manage the following:

  • Data ingestion capabilities: CDPs use various mechanisms to ingest the data that goes into the unified customer profile — mobile SDKs, APIs, Webhooks or built-in connectors to other platforms. Identity resolution: The platform “stitches” together customer data points, such as email addresses, phone numbers, first-party cookies and purchase data, from various channels matching them to create a single customer profile.
  • Identity resolution: The platform “stitches” together customer data points, such as email addresses, phone numbers, first-party cookies and purchase data, from various channels matching them to create a single customer profile. Some players partner with other providers for this capability, while others have their own systems.
  • Online/offline data: The platform leverages identity resolution or an identity graph to stitch together behaviors in order to create a unified profile.
  • Data hygiene: The platform enables users to clean and standardize customer records.
  • Structured/unstructured data: CDPs differ in their capabilities to manage unstructured data (i.e., social media feeds, product photos, barcodes), which may comprise up to 80% of all data by 2025, according to IDG.

The importance of each of these data management capabilities will depend on a particular organization’s business goals, and whether it has a significant mobile presence, direct mail budget or brick-and-mortar stores and/or agents.

Analytics

CDP vendors offer data analytics capabilities that can do some or all of the following: allow marketing end-users to define and create customer segments, track customers across channels and glean insights into customer interest and intent from customer behavior and trends.

The functionality provided can include predictive models, revenue attribution and journey mapping. To one extent or another, many of these capabilities may utilize machine learning or artificial intelligence to surface insights about audiences and proactively offer suggestions about the best next step to move a prospect through their purchase journey.

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Orchestration

A select group of CDPs provide campaign management and customer journey orchestration features that enable personalized messaging, dynamic web and email content recommendations, as well as campaigns that trigger targeted ads across multiple channels.

The customer data platform often automates the distribution of marketer-created customer segments on a user-defined schedule to external martech systems such as marketing automation platforms, email service providers (ESPs), or web content management systems for campaign execution.

For example, the CDP could deliver targeted content to a web visitor during a live interaction. To do this, the CDP must accept input about visitor behavior from the customer-facing system, find the customer profile within its database, select the appropriate content and send the results back to the customer-facing system. A customer data platform may also facilitate digital advertising through an audience API that sends customer lists from the CDP to systems (i.e., DMP, DSP, ad exchange) that will use them as advertising audiences.

Data regulation compliance

CDP vendors vary in the support they provide for compliance with the wide range of vertical market and international regulations that safeguard customer data privacy. Some build compliance features into their platforms, while others rely on outside systems. The European Union’s GDPR was implemented in May 2018 and impacts all U.S. marketers and data firms handling European data or serving customers in the EU. Brands marketing to Canadian consumers through email must also comply with the country’s CASL (Canada Anti-Spam
Legislation). Meanwhile, the California Consumer Privacy Act (CCPA) went into effect in January of 2020.

Marketers in the highly regulated healthcare market must follow HIPAA and HITECH regulations. In addition, all organizations that accept, process, store or transmit credit card information must maintain a secure environment that meets Payment Card Industry Data Security Standards (PCI DSS), as well.

Third-party systems integration

CDPs streamline integration of customer data by providing out-of-the-box (or native) connectors for many martech systems, including CRMs, DMPs, marketing automation platforms, DSPs, and campaign analytics and testing tools. Most marketing organizations have assembled a marketing stack that contains many of these types of platforms. But integrating the data that resides in the martech ecosystem is a huge challenge — one that costs U.S. brands millions of dollars annually. The majority of CDPs profiled in this report also provide at least a basic API to enable custom integrations.


Explore platform capabilities from vendors like Blueconic, Tealium, Treasure Data and more in the full MarTech Intelligence Report on customer data platforms.

Click here to download!


What are the benefits of using a CDP?

Marketing executives today are in charge of dozens of martech applications to manage, analyze and act on a growing volume of first-party customer data. But despite increasing efficiency, the emerging martech ecosystem has created problems with data redundancy, accuracy and integration.

Automating customer data accuracy and integration through a CDP can provide numerous benefits to marketers and to other functions across the enterprise.

These include the following:

Expanded enterprise collaboration. A CDP fosters cooperation among siloed groups because it gathers data from throughout the enterprise and supports customer interactions across many touchpoints. The unification of data allows enterprises to see how strategies for audience, customer experience and execution all fit together – and enables audience portability to ensure a more consistent, informed customer experience.

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Improved data accessibility. A CDP is a centralized hub that collects and houses customer data from every corner of the enterprise. Pieces of data are normalized and stitched together to build unique, unified profiles of each individual customer. The result is a persistent customer database whose main purpose is to gather and share data more easily and efficiently across the organization

Streamlined systems integration. A CDP unifies data systems across the enterprise, from marketing and customer service, to call centers and payment systems. By creating a single “system of record” for first-party customer data, data redundancies and errors can be minimized, and data can flow more quickly into — and out of — marketing automation platforms, email service providers (ESPs), CRMs and other martech systems.

Increased marketing efficiency. A CDP unifies individual data with unique IDs that create more robust customer records. Many manual tasks are also automated by the CDP, allowing marketers to focus on the creative and analytical tasks they are trained for. The result is more accurate modeling, targeting and personalization in marketing campaigns, and more relevant customer experiences with the brand across channels.

Faster marketing velocity. In many cases, CDPs are “owned” by marketing, minimizing the need for IT or developer intervention to collect, analyze and act upon data. With control in marketers’ hands, the time to segment and build audiences, execute campaigns and analyze results significantly decreases. That said, engineers may still be needed to perform deep data analysis and facilitate integrations. This is especially true as CDPs extend beyond marketing and into sales and service functions.

Stronger regulatory compliance. A CDP creates greater internal control over customer data, streamlining data governance to comply with the many regulations now impacting brands worldwide. Marketers in the healthcare industry must comply with both HIPAA and HITECH regulations. Businesses that handle European data or serve customers in the EU must also comply with GDPR and those dealing with Californians must deal with CCPA
(California Consumer Privacy Act). The majority of CDP vendors are both ISO and SOC certified for best practices in handling personally identifiable information (PII).


About The Author

Pamela Parker is Research Director at Third Door Media’s Content Studio, where she produces MarTech Intelligence Reports and other in-depth content for digital marketers in conjunction with Search Engine Land and MarTech. Prior to taking on this role at TDM, she served as Content Manager, Senior Editor and Executive Features Editor. Parker is a well-respected authority on digital marketing, having reported and written on the subject since its beginning. She’s a former managing editor of ClickZ and has also worked on the business side helping independent publishers monetize their sites at Federated Media Publishing. Parker earned a master’s degree in journalism from Columbia University.



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Real Story on MarTech: Beware of vendor bullying

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Real Story on MarTech: Beware of vendor bullying


Let’s say you work in martech for a large, well-known enterprise. It’s a global firm, a recognized brand. Ideally, you’d want to follow a structured, test-based approach for how you bring new technology into the enterprise, and you’d expect participating vendors to follow your lead in the vetting process — out of respect, if nothing else.

Well, reality can prove itself quite different. In Real Story Group’s role as a buyer’s advocate for martech stack leaders, we’ve noticed a recurring trend where larger software companies often disrupt well-reasoned martech selection strategies through aggressive and frequently questionable tactics.

Of course, none of this is new, and perhaps vendor bullying today is more subtle than in years past — but it remains just as persistent.

A typical scenario

Imagine this scenario: You and your team go through a proper technology selection process. You do everything right. Your team comes to an educated consensus decision. Based on empirical testing, you are on the verge of selecting a platform not sold by one of the big vendors.  However, these big vendors are aggressive, publicly-traded companies, not used to getting turned down.

So they approach a board member or senior exec at your firm, trying for an end-around your process. Unfortunately, there’s a long history in software sales of “selling up the chain.”  Back in the day, this meant deals on the golf course; more recently, it’s cajoling over lunch, at executive councils, and boardroom get-togethers.

Now it might seem anachronistic to talk about a supplier bullying a customer. As the buyer, don’t you have power in this situation? But that’s just the point. Large martech vendors employ specific methods to disempower enterprise selection teams.

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How it works

Here’s what I often see:

  1. High-ranking executives from the major software vendor demand a meeting with your boss’s boss or a C-level executive. Given that this vendor may work with other parts of your enterprise and everyone wants to maintain this relationship, they typically get the meeting. Or they have already networked with your leadership at industry events.
  2. The vendor touts traditional, one-size-fits-all analyst rankings to prove they are “a leader.” If you select anyone other than a leader, it means a risk to the customer’s business (and, by implication, valuations and careers).
  3. They belittle the enterprise selection team: “They’re not strategically thinking like you need to do…”
  4. They belittle the selection process: “They got lost in the weeds and focused too much on functionality.” (This is a particularly ugly allegation because the most bully-prone vendors tend to carry the most technical debt, so they often want to avoid test-based selection processes.)

If all else fails, the vendor may dramatically slash their pricing at the last minute as a defensive move or even give something away cheaply or for free. This isn’t exactly bullying, but it warps the process for sure. Just remember, technology is never truly free.

A tale of two enterprises

Recently, I’ve witnessed two dramatically different outcomes to these tactics taken by one of the most notorious of these vendors. (If you’re an RSG subscriber, contact me to hear the gory details.)

The vendor bullied Enterprise #1 into selecting an ill-fitting solution against the wishes of an interdepartmental selection team, persuading a senior executive sponsor that only that vendor’s array of platform offerings would prove robust enough. The implementation was so difficult and expensive that it did not launch after two years. They’re now engaged in a multi-million dollar lawsuit.

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Enterprise #2 said no to the same bully. The alternative system they selected has recently launched, and while no technology is perfect, the reception has been positive so far. The losing vendor’s calls and threats haven’t stopped completely. But when questions come from upper management, because the process was grounded in user-centered design thinking, the activation team can prove that their choice will lead to the best adoption and drive better business value.

Ultimately the fate of your enterprise is often going to depend on the strength of your leadership and, by extension, your ability to connect your decision to strategic business objectives. If you can cast your decision in terms of key metrics you’re trying to move, it becomes less susceptible to outside manipulation.

What you should do

First, recognize that often the biggest martech vendors carry the biggest risks.  That doesn’t mean you should avoid the über-players in these markets, but it does mean you have to prepare for them to try to bulldoze over you should you not tip things their way.

Since the bullying is real – and so are the long-term consequences of making bad technology decisions – you need to give your team and leadership the ammunition to push back. Let me know if I can help. In the meantime, feel free to share your experience with this phenomenon via the hashtag #VendorBullied on LinkedIn or Twitter.

Real Story on MarTech is presented through a partnership between MarTech and Real Story Group, a vendor-agnostic research and advisory organization that helps enterprises make better marketing technology stack and platform selection decisions.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About The Author

Jarrod Gingras is Managing Director and Analyst at Real Story Group, a customer-focused technology analyst firm. Jarrod specializes in DAM and Content Technologies, as well as helping large enterprises make good decisions around martech of all kinds. Twitter: @jarrodgingras LinkedIn: https://www.linkedin.com/in/jarrodgingras/

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