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1 IS THE MARKETING CLOUD? SPONSORED BY

2 Table of Contents 3 Introduction First Things First, What is The Cloud? Origins of the Marketing Cloud 6 The Cold War Cloud 7 The Business Cloud 8 The Consumer Cloud 9 The Marketing Cloud Elements of the Marketing Cloud 15 Grey Skies: Marketers 4 Cloud-Induced Pain Points 16 Complexity and Integration 17 Security 18 A Tricky Relationship Between IT and Marketing 19 The Cookie/Mobile Device Problem 20 Glossary 11 The Hub: One Cloud to Rule Them All

3 3 / WTF IS THE MARKETING CLOUD? Introduction In 1999, the Wachowski brothers debuted what was to become a seminal science fiction classic of the Internet age: The Matrix. In it, our hero Neo is invited to look beyond the collective conscious into the film s titular stream of 1s and 0s. And while humanity s life force isn t being harvested by a mind-altering supercomputer, marketers can be forgiven for thinking we re headed that way. In the 21st century, humanity s most prolific effluvia is data. Our buying preferences, our Internet search histories, our playlists, family photos, and friend networks are all translated into 1s and 0s. And that data is being deposited, skimmed and otherwise collected in The Cloud. For marketers, it is a treasure trove at once inspiring and terrifying. For legacy software companies and data management platforms, helping marketers put that trove to use is the biggest business opportunity of this age. They re calling it The Marketing Cloud. So what is the cloud? WTF is the marketing cloud? And how do the two fit together? Digiday created the WTF series to parse murky digital concepts just like these. To paraphrase Morpheus: Take the red pill, and we ll show you how deep the rabbit hole goes.

4 4 / WTF IS THE MARKETING CLOUD? First Things First, What is The Cloud? Quincy, WA Seattle, WA Lulea, Sweden Hamina, Finland Dublin, Ireland Chicago, IL Umatilla, OR The Dalles, OR Astoria, OR Prineville, OR Eemshaven, Netherlands Amsterdam, Netherlands Lockport, NY Mayes County, OK Arlington, VA Northern, VA San Francisco, CA Newark, CA Santa Clara, CA Cupertino, CA UK London, UK Lenoir, NC Maiden, NC Forest City, NC Douglas County, GA Reno, NV It is a global network of data centers constructed by some of the most powerful Internet companies of our time. It has a terrestrial home, many in fact, in places like The Dalles, Ore. (Google), Santa Clara, Calif. (Facebook), Maiden, N.C. (Apple), Ashburn, Va. (Amazon). Below is a (very) incomplete map of the major player s centers around the world. Council Buffs, IA Des Moines, IA Altoona, IA West Jordan, Utah Let s start with what the cloud isn t. It isn t an ephemeral atmosphere of data. It doesn t shift in the air. It doesn t look like a dinosaur or an elephant or, weirdly, your Aunt Barbara. France Frankfurt, Germany Germany Saitama, Japan Tokyo, Japan Osaka, Japan St Ghislain, Belgium Hong Kong Changhua County, Taiwan Berkeley County, SC Dallas, TX Austin, TX San Antonio, TX Houston, TX Singapore Sao Paolo, Brazil Apple AWS Facebook Google IBM Microsoft Oracle Rackspace Salesforce Yahoo! Quilicura, Chile New South Wales, Australia Sydney, Australia

5 5 / WTF IS THE MARKETING CLOUD? Origins of the Marketing Cloud Unlike Athena, the ancient Greek goddess of data er, wisdom the cloud didn t spring whole from Zeus head. It developed over time and in different ways for different users.

6 6 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Cold War Cloud During the Cold War, key military and government data centers were spread across the U.S., largely unconnected to one another. Any enemy attack that wiped out any computer bunker would take all of that site s data with it. To prevent such a catastrophe, the US Defense Department launched its ARPANET, a computer network that ensured data could be shared between sites. The packet-switching technology the U.S. government used in 1967 laid the foundation for all network computing and the Internet itself.

7 7 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Business Cloud Meanwhile, hardware manufacturers like IBM, GE and Honeywell were churning out giant mainframe computers, fondly referred to as big iron, for the business needs of corporations. These powerful machines allowed businesses crunch swaths of data, making many projects that required huge amounts of computation feasible for the first time. But they were incredibly expensive. Smaller businesses responded by running direct lines to machines owned by the manufacturers, universities and other third parties and renting computing time. This hardware as a service model could be seen as an early entry into the cloud concept tapping into computing power as if it was a utility. Moving into the PC age, packet-switching network technologies derived from ARPANET made computer resource sharing even more common and cost-effective. First, in-house terminals gave workers access to central computer processing units, usually located in a cooled room below ground. Later, those spaces were converted to in-house server rooms that powered internal networks running software by Microsoft, Adobe and Salesforce, among others. But that didn t last long. Servers, like mainframes, are expensive. And once the Internet bloomed, those software companies found that by building their own server farms, they could free up hardware budgets and instead sell many more subscriptions by running their software over remote computing networks aka, the cloud.

8 8 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Consumer Cloud Unsurprisingly, consumers were quick to embrace the cloud. While businesses utilized private, purely proprietary clouds to solve organizational problems, consumers called on the public cloud, comprised of generally free services. Dropbox, Google Drive and Amazon Cloud Drive allow consumers to store and share files through the cloud, while Apple s icloud ensures that all of your devices files are synced with a cloud-based account. Some of these companies operate the largest server farms in the world. Other consumer cloud-based services, from Spotify to Netflix, have helped to create a digital economy of instant gratification. And along the way, the cloud has created reams of behavioral data giving marketers penetrating insight into the consumers who use them.

9 9 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Marketing Cloud The web is now flooded with a ton of useful data and intelligence, and marketers quickly hungered for ways to use it to sharpen their campaigns effectiveness. Marketing cloud services, many from the legacy software companies themselves, sought to give companies the ability to draw on a diverse array of production and data analytics tools without dealing with their maintenance or overhead costs. They aim to deliver in a few main areas: uniting first- and third-party data to flesh out complete audience profiles; streamlining workflow and fostering collaboration between teams by making resources more widely available; firing off messages to the right places in the right sequence to achieve maximum effect across , social and other channels; and providing the opportunity for unified metrics and analysis across engagements. The interconnected nature of these steps in the process gave an advantage to services that could be holistically coordinated or integrated into larger platforms. Cloud-based marketing hubs have become very attractive. The surge in data available to marketers, not to mention a boost in consumers going mobile, has quickened the adoption of marketing cloud services.

10 10 / WTF IS THE MARKETING CLOUD? Elements of the Marketing Cloud

11 11 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD The Hub: One Cloud to Rule Them All As marketing solutions migrate fast to the cloud, the rush to get a piece of the action is shifting into hyperdrive. Smelling money, legacy software giants like Oracle, Salesforce, and IBM have in recent years pulled off a number of acquisitions of estimable smaller cloud-based marketing tech outfits. Each giant s goal? To put together the One True Cloud Marketing Hub, the model that will encompass all necessary cloud marketing solutions and serve as the marketing-tech alpha and omega for the new generation of marketers that will subscribe to its services. Other big guys are taking different routes towards the same goal of hegemony. SAP, for instance, has partnered with Adobe to sell the latter s marketing cloud in conjunction with certain SAP solutions. Problem is, much like the ad tech industry before it, these providers have created deep market confusion with their wide array of offerings, infinitely branded plug-ins and promises of subtle, shaded advantage. Moreover, not all hubs are equally good fits for every organization. Some are diversified software providers with roots in sales management (Salesforce) or creative applications (Adobe). Some are independent, mid-size players offering a digital suite of solutions (IgnitionOne). Others are programmatic ad tech companies offering DMP solutions (Turn, MediaMath). Still others are true mar-tech providers (HubSpot, Marketo). It helps, we hope, to divide these hubs into their four essential elements. Let s count em up, adhering to the order in which marketers would tend to encounter them during their progress (or should we say their journey?) through a campaign. Buckle up, here we go.

12 12 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD Workflow and collaboration Here s where you get your CMSs and your project management and collaboration tools, some of which people in other industries use, not just marketing types. But marketing creatives specifically use file-sharing tools to put together their copy, or cloud-based editing solutions to create video. Meanwhile, strategists and salesmen are tracking financial outlays across various departments, receiving real-time views of how much money they ve spent and how much is still available. Everything s flowing like cream now: your whole marketing team s enthused about life s possibilities due to the blessings that these solutions are showering down on their deserving heads. Everything s set for the next step, so it s good that the marketing clouds contains a lot of solutions one can use for Orchestrating campaigns Ruling the roost here are programmatic ad solutions, but you ll also find other useful beasts lurking in this section. Look, there are some solutions for sequencing, frequencing, and exposure in other words, for figuring out in what order, how often and for how long your ads should run, in the interests of saving money. And take a peek over there, at the dynamic creative optimization solutions that will help you change ads in real time so that they better appeal to the viewer on the basis of what you know about her. Or look over in that corner, yonder, at the SEO solutions and the tools that will help you whip up social marketing elements like sweepstakes campaigns and social polls, not to mention landing pages that will corral your desired audience. Analyzing consumer data Here s where you ll find plug-in predictive targeting solutions, which will help you aggregate first-, second-, and third-party data so you can figure out whom to market your brand to on the basis of people s previous web behavior, not to mention demographics. Or audience extension solutions, to find other potential customers with the same particular traits as your target demographic. Or customer conquesting solutions, which will help you straight-up steal other people s customers in the closest thing to high seas buccaneering that any of us, at least, will ever get up to in this lifetime. There s more solutions where these came from, and by the time you put down that bagel a couple more will have proliferated, since every ambitious young programmer out there with dreams of a fat Silicon Valley payday knows that finding the next Big Data-crunching solution is the way to go. Measuring results The solutions that fall under this grouping help you figure out whether your campaign hit its daily benchmarks; learn which of your marketing channels are firing the most effectively (maybe you want to take money away from mobile and throw it at social, for example); or study broad, financial metrics (what did we sell, and to whom, and how much did they buy?). How did your various channels stack up against each other? Is it time to maybe adjust your allocation of resources? Bottom line: is the client going to be happy? (See also: Are you still employed?) So that s it. A business environment filled with ambitious start-ups and that s starting to move towards consolidation, and a marketing cloud with an easy-to-suss quadripartite structure. Like a barbershop quartet. Or the horsemen of the apocalypse.

13 DEFINING DATA MANAGEMENT In the eye of the storm of marketing clouds sit your customers and their data. Your customers don t care about clouds or stacks or silos. What they want is consistency of experience for you to show them that you know them in the right context during each moment they interact with your brand. When it comes to the technology to support such interactions, contradictory descriptions and claims have caused some real headaches for buyers. Lack of clear understanding of terms only adds to the overall frustration. Most technology companies truly want to make it easier for marketers to engage with and convert specific audiences and individuals. Be aware, though, that just because they can ingest point-solution data into their platform does not mean that the data is actionable and can be properly leveraged for use across different systems or mined for insights.

14 THE DIFFERENT FLAVORS AND DEFINITIONS OF CLOUD-BASED DMPS Basic DMPs A basic data management platform (DMP) in its most simple form can take data from one point solution and combine it with data from another. This blending of digital marketing data seems good on the surface, but be aware that custom applications may be required in order to support broader use. Make sure that the solution to fixing today s most basic needs does not hinder future expansion as your marketing organization evolves. Media DMPs Media DMPs have roots in display media. These were initially created to support online behavioral advertising and realtime bidding markets for online display ads. Today they feature capabilities such as portfolio optimization, predictive and attribution modeling and data visualization. Because the customer journey typically begins with an online search or exposure to an ad, the ability to capture and use this behavioral data to influence later-stage interactions is becoming increasingly valuable. Because the customer journey does not begin at acquisition, advanced marketing solutions should include media capabilities to support a consistent end-to-end customer lifecycle experience. CRM DMPs CRM DMPs have roots in customer relationship database management and the fields-based data that supports sales interactions. While CRM data is extremely valuable for personalized marketing and can be imported into most DMP systems, the DMP technology should also account for unknown consumers who engage with the brand. Marketers relying on CRM-based DMPs lack the ability to connect an individual consumer s data from known interactions with data from that person s anonymous interactions. CRM data can be imported into most DMPs, but this does not necessarily guarantee that the data will flow freely to influence steps of future interaction. Clouds Cloud refers to applications, services or resources available to specified users on demand via the web. Cloud anything is a network concept, allowing companies to increase capacity, scale and functionality as needed without having to commit to potentially expensive infrastructure. A marketing cloud is an assembled set of marketing solutions accessible online. Some marketing clouds have gained expansive feature sets due in part to disparate technologies with the goal of eventual integration into a single seamless offering. Prior to investment, be sure to dig deep into demonstrations regarding the functionality of key components and integrations, especially those most important to your business. Marketing Hubs A true data management system (referred to as a digital marketing hub or cloud) provides standardized access to universal audience profile data, content, workflow elements, messaging and common analytics. The goal is the coordination and optimization of marketing campaigns across multiple channels to engage consumers in a more personal and relevant way. This can be done both manually and programmatically, using unified data available for both online and offline tactics. Marketers need to look for a system that provides a single source of truth to better engage people across the customer journey from initial search ad to final purchase and loyalty marketing. Systems typically include a bundle of native marketing applications and capabilities as well as an open architecture through which other point solutions and partners can integrate. Before there was a marketing cloud, there was IgnitionOne, providing cloud-based integrated marketing technology to its clients long before most clouds gained their fluff. Since 2004, we ve offered smarter solutions for performance-based marketers to better engage their customers throughout the complete customer lifecycle. For true data management, website personalization, mobile, search, programmatic display, reporting and analytics, , social including a flexible architecture for the integration of additional solutions count on the software, service and expertise of IgnitionOne to remove the complexity so you can do more with your data, faster. Cloud? Hub? DMP? No matter what you call it, we re here to help. Get in touch: various mergers and acquisitions of

15 15 / WTF IS THE MARKETING CLOUD? Grey Skies: Marketers 4 Cloud-Induced Pain Points Like everything in this imperfect world, the marketing cloud, whatever its benefits, brings certain challenges. Let s discuss.

16 16 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS 4 CLOUD-INDUCED PAIN POINTS Complexity and Integration A recent IDC report indicates that over 1,000 vendors are currently pumping marketing tech solutions out into a mostly unconsolidated marketplace. Expect more. Way more. As marketing becomes ever more mind-warpingly data intensive, and as the ability to aggregate information begins to separate the industry s winners from its losers, programmatic solutions will become even more crucial. Embrace them or die. But ask yourself the question: Are all your company s cloud-based solutions actually going to work together, especially if various departments acquired them in the absence of a CIO s unifying vision? Integration remains a significant challenge in the cloud tech world. Adam Heimlich, head of programmatic at Horizon Media, says the integrating tech that everyone s relying on is not that standardized. Companies change their APIs all the time and screw up ongoing integrations. The tech world just isn t quite built for always-on APIs among dozens of big companies. Or dozens of small companies, for that matter. Heimlich adds that another significant issue has to do with the internal cultures at companies. People are in favor of integration in theory but generally against sharing their work or letting others play in their sandbox.

17 17 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS 4 CLOUD-INDUCED PAIN POINTS Security Entrusting crucial information to an amorphous entity with a name that actually connotes impermanence (don t clouds... evaporate?) isn t a natural fit. But security might be a bit of a red herring at this point. Computing simply is moving to the web, period. There simply will be security issues, just like there always have been. (Your old IT system, connected as it ultimately was to the Web, wasn t safe either.) At the same time, cloud providers simply will go to great lengths to solve them, because, business-wise, they ll be screwed if they don t. Anyway, a rational cost/benefit analysis indicates that the security issues associated with the cloud can be overblown. Things are more complicated than they appear. While the cloud model comes with risks, says space150 CTO Marc Jensen, the benefits are huge. Before the days of the cloud, many organizations would be their own security experts and would have a range of success or failure with this. Security is something to be taken seriously, and hiring experts, cloud or not, is critical. The move to the cloud has eliminated the temptation for people to be their own experts. Another way to put it is that when you use cloud services you re outsourcing your security function to companies like Google, Amazon, and Apple outfits rumored to know a thing or two about computing. Then too, the cloud is making possible positive changes to security protocols on the tech side. Jensen cites Google s transition from a trusted perimeter security model to a model based on your device and your identity. The problem with perimeter models, he says, is that once you re in the network, you re really in. The Sony hack last year was a good example of this; getting into the network opened access to everything. As our mobile devices are adding things like biometric ID, they are getting increasingly secure. He adds, The cloud has enabled this approach. It would have been impossible before this.

18 18 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS 4 CLOUD-INDUCED PAIN POINTS A Tricky Relationship Between IT and Marketing One issue here, says Domani Studios CTO Evan Stark, is the speed at which marketers wish to move versus the requirements and standards that IT needs to facilitate, which take more time. Another issue is that in the cloud era most anyone can start working behind the backs of the IT department. Creative types dabbling in tech great idea, right? The burgeoning bring-your-own-device movement is a subset of this issue. BYOD happened so fast that it caught many companies and IT departments off guard, says space150 CTO Jenkins. When you have really restrictive IT policies, and people need to get things done, you see a lot of people using the tools they know best. But the cloud era has also opened up new avenues for tech/marketing collaboration. Digital marketing s first iteration was to take a traditional marketing output, like a brochure, a static image, or a 30-second video, and place it in a digital environment (a website, a banner ad, a pre-roll video), says Craig Key, SVP of Media at space150. This meant that the creative aspect still lived wholly inside of marketing s sphere, while the delivery was up to the technologist. One barely cared about the other, and there wasn t much need for them to work together. No more. In the new age of smart campaigns, Key says, creative can take advantage of technology to inform and enhance the work. What kind of device is the user on? What time of day is it? Where are they? What s their history with the brand or its products? These types of data points make marketing work better/smarter/harder, but also require the CMO and CIO to work hand-in hand. An example of such handin-hand work, Key says, is the creation of a company data management platform, which becomes the cloud to store all aspects of a business data so that it can be accessed in real time to deliver more meaningful and relevant messages that are tailored to the individual user rather than a broad segmentation of customers.

19 19 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS 4 CLOUD-INDUCED PAIN POINTS The Cookie/Mobile Device Problem The no-cookies-on-mobile problem is a perennial one, and one that s not specifically associated with the transition to the cloud. But the cloud era is going to inflect how marketers approach that problem. The fact is, people are spending more and more time using apps on their devices. Look into the future, says space150 s Jensen. The experiences we seek just work better in apps, and while people will use the web when they need to, they strongly prefer the speed of apps on mobile devices. But since there s no app equivalent to cookies, marketers traditional methods of tracking consumers are showing diminishing returns. Marketing s response will include tracking consumers using not the sorts of profiles that cookies can enable, but rather consumers own real identities. This will require data-crunching on a heroic scale, and of a sort that today s cloudbased solutions can increasingly deliver. Facebook, with its tremendous (and vaguely terrifying) access to first-party information is an example of a company that s making a go of it on this new frontier, but it s not alone. The companies that are have strong ties to identity are monetizing well, says Jensen, while networks that rely on a less personal or more anonymous system of identity are not monetizing as well. He adds, Cookies are a problem on mobile, so we need to move on. The cloud era, with its explosion of new technology, could help marketers do that.

20 20 / WTF IS THE MARKETING CLOUD? Glossary

21 21 / WTF IS THE MARKETING CLOUD? GLOSSARY A Cl Analytics Appliance program interface (API) That to which marketers subject the absolutely stupefying amounts of consumer information to which they have access in the Big Data digital era. Vendors are falling over themselves to sell marketers the analytics solutions that will help them deal with that data: sift through it, sort it, segment it, make conclusions about consumer behavior and preferences from it. A set of standards, routines and protocols that explain how a platform or software handles its data. APIs are typically opened up by a large company to encourage third parties to integrate with them. In the marketing cloud, APIs allow marketers to layer on functionalities such as marketing automation, analytics and targeting that they may need to conduct business. CIO/CMO partnership Cloud The CMO has the customer data. The CIO has the expertise in building out the large programs needed to generate insights. It seems like a natural partnership, but it s often a hard sell. Why? CMOs are spenders, tasked with generating excitement about a brand. CIOs are savers, tasked with improving processes, managing systems and supporting users in a way that drives down costs. Their working together to dig into data will ultimately drive growth, but to get there, they ll need to agree on some key purchases, including, maybe, marketing cloud services. If you ve gotten this far and you still don t know, start over. Just kidding. It s a network of servers connected in such a way to allow centralized data storage and access. Also referred to as cloud computing. Attribution modeling Modeling of how to assign credit for sales and conversions in a sales path. Some models assign credit for a sale to the last ad that the buyer clicked on during his or her path towards a purchase. Others apportion credit in different ways. Attribution modeling remains an inexact science, a fact that marketers don t like at all. Cloud architecture Everything required for cloud computing the whole kit and caboodle, as our grandmother used to say. You ve got your front end platform (like a mobile device or laptop), your back end platforms (your servers and storage capacity), your cloud-based delivery, and your network (like the Internet). That s it? Yep. That s it. BYOD This IT policy allows employees to access data hosted in the cloud from any of their personal devices, usually in accordance with restrictions that vary by company. (No sensitive data, for example, or no data storage on devices.) BYOD allows for a more mobile workforce, while saving companies the cost of purchasing company-issued laptops and smartphones for every employee. Cloud burst This one comes in two flavors, positive and negative. A positive cloud burst is when a cloud handles more traffic or a computing surge. A negative cloud burst is when it doesn t.

22 22 / WTF IS THE MARKETING CLOUD? GLOSSARY Cl Cr Cloud enabler Cloud operating system Collectively, the technologies and manufacturers that serve as the backbone for all cloud products and services. A cloud enabler is what lets an organization build and use cloud solutions. A typically fast and easy to use computer operating system that doesn t run conventional PC software, but loads all its applications from the Web. Confusingly, cloud operating system can also refer to the infrastructure necessary for setting up cloud computing services. In that second sense, it s close in meaning to platform as a service. Content delivery network Core service layer A network of servers (or server farms) strategically located to enable quick upload of web pages, files and other content. The closer the user geographically to the server, the faster her upload times. CDNs are particularly important for publishers and platforms with global reach as today s users have become accustomed to instant access to everything all the time. System software in Mac s OS X and ios that contains fundamental systems services necessary for apps that function on higher levels. Cloud security Security in cloud computing. Wait, you knew that. The point is that cloud security is going to be become more crucial, and an even bigger growth industry, as more and more data inevitably moves to the cloud. Needless to say, the well-publicized cloud data breaches of recent years haven t helped assuage anxiety on this front. Still, try to relax. Really smart people are working on this. CRM Customer relationship management. The management of a company s relationships with its current and potential customers. CRM often involves using tech solutions to handle sales, marketing, customer service, and technical support functions. Companies like Salesforce make those various solutions and offer them to customers on a SaaS basis. Consumption-based pricing model There is such a thing as too much support. While large corporations might love providing huge amounts of processing through their fixed-fee cloud services, this can be overkill for small businesses. Consumption-based pricing paired with elasticity (see p. 24) allows these smaller parties to pay only for what they use. Very cost-effective. Cross-channel attribution Attribution is what marketers call the process of keeping track of a consumer s behavior as he or she potentially approaches a purchase. Cross-channel attribution is keeping track of a consumer s behavior across both online and offline channels. The point: influence that behavior. Drive a sale.

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