THE RISE OF THE PLATFORM MARKETER: CONNECTED CRM IN A DIGITAL WORLD

Transcription

1 THE RISE OF THE PLATFORM MARKETER: CONNECTED CRM IN A DIGITAL WORLD

2 In 2011 we introduced the concept of the Age of the Customer and how we believed we were entering a new age of marketing 1950s+ Age of brand Creation of national brands Age of channel Direct-to-consumer business model transformation Internet and ecommerce Age of the customer Addressability At Scale Social networks & digital media National media and mass marketing Contenders we see 2014 Merkle Inc. Confidential 2

3 In 2012, we introduced the concept of The Connected Consumer and how we believed it would be the new battleground for competitive advantage Demographics Life Events Call center LTV Segment Site Product Meetings Display Mobile Print Social DM & EM Search TV/Video 2014 Merkle Inc. Confidential 3

4 In 2013, we introduced the Connected CRM framework as a structural way to implement customer centric business strategies Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Customer Strategy What data, processes, systems, tools and technology will be necessary? Infrastructure & Business Process Portfolio Strategy Segment Strategy Program Strategy These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences Experience Delivery Media Planning Channel Planning Targeting & Personalization Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation Financial Management Measurement & Attribution Budget Allocation Leadership & Organization What outcomes are we trying to create and how do we organize to enable them? Financial management informs customer strategy and experience delivery decisions as a closed loop process 2014 Merkle Inc. Confidential 4

5 Wow, has a lot changed over the last few years Facebook and Twitter rollout truly addressable platforms at massive scale CRM audience on-boarding match rates driving even more scale with partners like LiveRamp and datalogix Google launches audience based targeting and customization! Arms race has pulled in Pinterest and Instagram with others following fast 2014 Merkle Inc. Confidential 5

6 As a company rooted in direct, response and database marketing, we dreamed of a day when we could target known individuals in the digital world well that day has come.

7 Introducing the addressable audience platform 2014 Merkle Inc. Confidential 7

8 The emerging opportunity in Addressability At Scale (AAS) is the key driver of competitive advantage in the age of the customer Addressability at scale (AAS) is defined as the opportunity to create competitive advantage through the ability to deliver targeted, personalized experiences to consumers. AAS is enabled through the application of data and analytics to the digital audience platform marketplace that is now at massive scale AAS 1.0 Name & Address AAS 2.0 Phone # AAS 3.0 Address AAS 4.0 Cookie & Device ID Merkle Inc. Confidential 8

9 Amidst all of this scale and automation, the addressability of channels and media is increasing every day Addressability uses customer data (anonymous or identified) to increase the targetability and relevance of marketing impressions and experiences The Addressability Spectrum Identification: Anonymous Partially Identified Identified Knowledge: Unknown Some Knowledge Well Known 2014 Merkle Inc. Confidential 9

10 Addressability is reaching new levels of sophistication and scale due to the rise of the Addressable Audience Platform An Audience Platform is a digital technology that enables automated, targeted, personalized experiences to individuals (known and anonymous) at scale utilizing first and/or third party data Audience Platforms Audience Owners CRM Database 1 st Party Data Automation Automation Individual Level Delivery 3 rd Party Data 2014 Merkle Inc. Confidential 10

11 Each of these companies is working to extend the ability to reach their users off network which will result in absolutely massive scale Audience Platform already at scale on network Soon we will see audience extension off network at massive scale Third Party Inventory (exchange, ad network, etc.) But these will become closed networks forcing the advertiser to answer how to create a single customer view using first party identity management 2014 Merkle Inc. Confidential 11

12 The Audience Platform has revolutionized digital and paid social media in the last four years Digital & Social Media Evolution Anonymous Individual CRM Data Driven Anonymous and Individual Level of insight Place Place Place Contextual Real-Time Bid (RTB) CRM Targeted RTB How many people visit site, and their profile Cookie & Third Party data on unknown individuals Addition of data repository including all media and CRM data Targeting Based on inferred match between audience & publisher Anonymous user behaviors Retargeting Anonymous user behaviors tied to CRM data 1 st party data targeting (name and address) Optimization Publisher performance Anonymous cookie data Performance by customer 1 st & 3 rd Party Cookie Device ID Known individual Platforms & Format PC Banners PC Display & Video Channel specific Cross Media/Cross Device PC Mobile Tablet 2014 Merkle Inc. Confidential 12

13 But this is not just happening in media search is evolving very quickly as well Search Evolution Location/Device/Time Audience Driven Location/Device/Time Level of insight Targeting Keyword Universal Platform How many people are searching and for what terminology Based on exact keyword search behavior with not personalization Keyword Differentiated by Device Increased options controlled by the search engines for delivery Anonymous by device type and carrier Geography, day of week and time functions Keyword Integrated Media and Site Targeting Use of Remarketing programs in search and display to customize Audience profile data from prior site visitation Unique experiences based on user profiles Optimization Match type and keyword Extended match types Device Targeting for Mobile Location specific ads and costs Performance by customer Segment Value Intent Formats Pure text only Site Links Video Ads Image/Logo ads Click to Call Video Form Extensions Product Price Ads Maps/Location Extensions 2014 Merkle Inc. Confidential 13

14 Why does this matter? 2014 Merkle Inc. Confidential 14

15 How does addressability create business value? Short term gains in marketing efficiency Mid-term gains in growth and margin Long term gains in competitive advantage and market share 2014 Merkle Inc. Confidential 15

16 For most organizations, the impact of effectively leveraging this platform is in the hundreds of millions of dollars NPV of Revenue Impact Acquisition of new customers Year 1 Year 2 Year 3 Years 4+ $39MM $104MM $201MM $452MM 1%-3% increase in customer acquisition over 5 years Increased response/conversion from digital media efficiency by connecting Anonymous Data to CRM data for better targeting, measurement and segmentation Increased effectiveness of remarketing and personalization (offer/package) in Search, Display, Site and $15MM $43MM $93MM $256MM Reduction in churn Roughly 1bp (~31k subs) reduction in Voluntary Churn YoY over next 5 years Combine Customer service, Billing contacts with customer data to improve churn rates $24MM $61MM $109MM $196MM Improvement in NPS Scores over Baseline* Use Connected data to understand/predict/model NPS results across subscriber base and target subscribers for Promoter maintenance or Detractor intervention strategies Merkle Inc. Confidential 16

17 Today, most of the market is constrained in its ability to scale its addressable spend and make a significant impact Unqualified Leads & Waste Customer Remarketing Awareness Adverse selection is a big problem in non-addressable media people I don t want are the one s I get to respond Consideration This results in lack of quality and scale of the remarketing pool Remarketing Inability to use addressability to engage high value leads in a relevant experience drives down conversion of those that are quality Conversion As a result, marketers cannot scale budgets due to inefficiencies above in the funnel, thus, the targeting dilemma Unknown High-value customer Low-value customer 2014 Merkle Inc. Confidential 17

18 Marketers taking advantage of AAS are widening the pipe and driving greater scale and effectiveness through the funnel Addressability at Scale Impact of AAS 2.0 Available Addressable Impressions: +400% Addressable Media Spend: +300% Unqualified Leads & Waste Cost Per Lead: % Targetable Re-Marketing Pool: +500% % Personalized Interactions +300% Cost-Per-Conversion: -40% Average LTV per Customer: +60% Customer Remarketing Auto Property Multi-line Audience 1 Audience 2 Audience 3 Unknown High-value customer Low-value customer 2014 Merkle Inc. Confidential 18

19 A new kind of marketer 2014 Merkle Inc. Confidential 19

20 Introducing The Platform Marketer The Platform Marketer wears many hats and embodies the collective competencies needed to successfully operate in this world of addressability at scale In the highly digitized world of AAS, a new set of competencies must be attained by the marketer We call the personification of those collective skills The Platform Marketer While new processes, data, and technologies must be implemented (what we call Connected CRM), these digital platform competencies must first be addressed Marketers must evaluate their own competency level and decide how best to fill gaps internally and with external expertise 2014 Merkle Inc. Confidential 20

21 The Platform Marketer embodies the collective competencies needed to successfully exploit addressability at scale Platform Data Consumer Privacy & Compliance There are 9 critical competencies that must be mastered Platforms Utilization Audience Management Identity Management Media Optimization Platform Enablers Measurement & Attribution Marketing Technology Experience Design & Creation Channel Optimization Platform Execution 2014 Merkle Inc. Confidential 21

22 The Platform Marketer The Audience Management Expert The Platform Marketer has a data-driven view of its audience segments and actively manages strategies and tactics through this portfolio 2014 Merkle Inc. Confidential 22

23 The Platform Marketer The Audience Platform Expert The Platform Marketer is a master of the ever evolving Audience Platform targeting and optimization capabilities Content & Context Intent & Behavior Anonymous Individual Identified Individual Context Custom content Intent Geo-location Behavior 3 rd party segments Device ID Probabilistic ID 1 st party cookie Name & Merkle Inc. Confidential 23

24 The Platform Marketer The Addressability Expert Platform marketers bring addressable data skills that facilitate the exchange of identity and data for personalization and relevance. 12 Main Street Philadelphia, PA Main Street Philadelphia, PA 12 Main Street Philadelphia, PA Main Street Philadelphia, PA //asdohsd.asiudhscns/html Pinterest: jdoe //asdohs.hhd.net JD s iphone #JohnnyDoe 12 Main Street Philadelphia, PA #JohnnyDoe //asdohs.hhd.net 70 s 80 s 90 s 00 s Today Mailing address Phone number Twitter handle Cookie 3 rd party ID address Digital set top ID IB ID Pinterest ID GooglePlus ID Device ID The Platform Marketer knows he/she must maximize his addressable market through high coverage of consumer identifiers and knowledge in the database This requires mastery of consumer addressability in the database and constant collaboration and leadership with technology It also requires deep consumer insight and experience skills to design and implement the experiential value exchange that incents consumers to provide data (e.g, why should a identify on a site with their facebook log-in?) 2014 Merkle Inc. Confidential 24

25 The Platform Marketer Programmatic Media Buyer Programmatic Media Buyer: The Platform Marketer brings programmatic buying skills to the enterprise 2014 Merkle Inc. Confidential 25

26 The experience blueprint elaborates on the segment plan and provides a detailed view of the customer journey Awareness Evaluate Connect Decide Apply Familiarize Nurtured Journey Stage MOVERS & SHAKERS Experience Personalization Enabler Touch points Engagement Tactic Offer, Motivation 2014 Merkle Inc. Confidential 26

27 The Platform Marketer Media & Channel Optimization Similarly, The Platform Marketer implements and manages a cross-channel personalization platform that creates a singular consumer experience Targeting Currencies Site Decisioning The Conductor Cross Media Decisioning Media Decisioning Search Decisioning The Platform Marketer Call Center Decisioning Real Time Data and Integration Services EM/DM Decisioning Personalization is driven through an integrated, data driven skill set focused on the holistic consumer experience Cross-Channel planning and decisioning is the conductor that sits on the channel specific applications allowing for a singular consumer view and experience execution Real-time data and integration services allows data currencies to flow bidirectionally back forth from the Conductor to the end point execution apps $ The net result being a singular, highly relevant consumer experience 2014 Merkle Inc. Confidential 27

28 The Platform Marketer The Digital Marketing Stack Expert Platform Marketers have strong expertise in state of the art and emerging marketing technology and how it drives business value 2014 Merkle Inc. Confidential 28

29 All of these enabling capabilities are managed by the design and integration of the technology stack Content Management Workflow Workflow MRM Automates the management of content and the marketing business process across the organization and partners Campaign Management DSP Media Execution Media Execution Analytics Analytics Connected Transforms data into actionable Forecasting/Simulati insights Attribution to inform relevant measurement on strategies Business Intelligence Audience Platforms Audience Platforms Media specific platforms that manage the execution and optimization Ad of Serving consumer experiences Search across media including search, digital media, and messaging Messaging Web Services Integration APIs DMP DMP Audience of audiences Management for real-time RT Data Transfer Syndication Marketing Database Channel Execution SFA/Contact Mobile Center Channel Execution Channel specific platforms that manage the execution and optimization Site of consumer experiences across media including site, app, POS, and contact center Tag Management Enables real-time interaction between the DMP and decision management platforms and media/channel execution marketing executions and enable Enables creation and management marketing and syndication to first and third party audience platforms Identity Management Identity Management Event Onboarding CDI/DDI Management Marketing Database Customer 360 Preference management. Center Event Stream Decision Management Decision Management Business Rules The orchestration of marketing tactics via algorithms and business rules across interactive media and Personalization Engine Decisioning Engine channels Algorithms The management and association of identity attributes across all channels and media. The creation of a longitudinal view of the experience a consumer has with a brand (the consumer event stream) The core of the marketing environment including the customer data warehouse, preference management, and online/offline event 2014 Merkle Inc. Confidential 29

30 The Platform Marketer Measurement & Attribution Leverages a fractional approach to attribution and quantify the incremental impact of each marketing activity Actual experience Day 8-30 Day 1-7 $ New Customer Direct or Rules Based 100% Credit over applied to bottom of funnel touches. Other touches often invisible Creates flawed financial view of 3% 14% 3% 5% 5% 5% 5% 15% 5% 5% 40% Model-adjusted interaction Most accurate and actionable Mass and Offline Digital Direct mail sent TV view Alt Media Display view Website visit Paid search click 2014 Merkle Inc. Confidential 30

31 The Platform Marketer - Consumer Privacy and Compliance Federal Regulators Global Regulators Privacy Advocates Industry Trade Associations Global Industry Trade Associations Consumer State Regulator s Privacy Enforcement & Protection Unit Certifications Organizations Standards Organizations U.S. Legislative Stakeholders Senate Committee on Commerce, Science & Transportation Global Legislative Stakeholders Associazione Italiana Direct Marketing U.S. Privacy Laws CA SB 1386 SB 27 California Civil Code : Shine the Light CA Readers Privacy Act Platform Marketer 2014 Merkle Inc. Confidential 31

32 Implementing customer centric business strategy in an addressable world 2014 Merkle Inc. Confidential 32

33 If the marketing database and addressability are the new key drivers of competitive advantage, it will become increasingly difficult to understand what your competitors are doing Brand, media and channel can be observed by the marketer The specific data assets, technology, analytics, business and optimization process that drive customized experience cannot be easily observed or copied 2014 Merkle Inc. Confidential 33

34 Connected CRM is the framework through which we aid our clients in the organizational transformation to required to exploit AAS The Connected CRM Framework (CCF) Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF Customer Strategy Portfolio Strategy What data, processes, systems, tools and technology will be necessary? Infrastructure & Business Process Segment Strategy These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences Experience Delivery Financial Management Measurement & Attribution Budget Allocation Program Strategy Media Planning Channel Planning Targeting & Personalization Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation Leadership & Organization What outcomes are we trying to create and how do we organize to enable them? Financial management informs customer strategy and experience delivery decisions as a closed loop process 2014 Merkle Inc. Confidential 34

35 It s not just about capabilities, we need to develop capabilities and define the proper operation model Capability Maturity Over-invested (poor return on capital) Bottom-up path builds infrastructure and seeks to leverage incremental gains to expand effort and drive organizational change (requires permission) Level 1 Level 2 Infrastructure focus, basic capabilities Single campaign, simple data, little offer and customer customization [Director] Level 3 [Vice President] Level 4 Basic multi-channel, model integration, and campaign automation Contact Optimization, multi-touch campaigns, integrated measurement platform [CMO] Level 5 Customer Value Optimization fully integrated programs & campaigns [C-suite] [CEO] Top-down path compels Organizational change and rapidly enables infrastructure for efficiency and effectiveness (requires sponsorship) Under-invested (poor return on management bandwidth) Ideal investment zone Operating Model [Key decision maker] 2014 Merkle Inc. Confidential 35

36 Phased Evolution: Leveraging a Customer Centric Business Strategy Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 and DM Digital Media Integration Mass Media Integration Digital Channels Integration Offline Channel Integration Fully Integrated Experience 2014 Merkle Inc. Confidential 36

37 We will also need to get the organization aligned The new adaptive organizational approach that integrates the core competencies needed for AAS 4.0 CMO CIO CCO COO CFO CEO Strategy & Planning Portfolio Management Experience Experience Design & Planning Audience Mgmt Addressability Optimization Measurement & Optimization Measurement & Attribution Technology Marketing Stack Portfolio Strategy Financial Management Segment Leadership Programmatic Media Mgmt Consumer Preference & Governance Identity Management Audience Platforms Digital Attribution Decision Science Personalization Consumer Data Segment Leadership Consumer Advocacy 1 st Party Platform Leadership 3 rd Party Platform Leadership Machine Learning Consumer Data Governance Product Management Innovation and Testing Brand Leadership 2014 Merkle Inc. Confidential 37

38 Implementation will require a highly disciplined and structured approach Connected CRM is about re-aligning how the business operates both internally and with its partners. Executive Sponsorship and Governance Team Why change A C Make changes B What s changing Phase 0 Use Case Development (Outside-In) Assessment (Inside-out) Business Case Blueprint & Roadmap Benefits Realization Change Integration 2014 Merkle Inc. Confidential 38

39 Key Takeaways Platform Data Consumer Privacy & Compliance The audience platforms have become highly addressable and are reaching massive scale Audience Management Identity Management Marketers seeking growth and competitive advantage will now be investing aggressively on these platforms moving huge amounts of budgets from mass media and traditional direct marketing Platform Enablers Platforms Utilization Measurement & Attribution Marketing Technology Experience Design & Creation Media Optimization Channel Optimization Platform Execution We are already seeing marketers moving budget at scale and seeing 20-40% lift in yield and we are just getting started But the challenge is that today s marketer does not have the skills and tools to really go beyond the haphazard bag of tactics and gimmicks to really leverage the opportunity 2014 Merkle Inc. Confidential 39

40 Thank You and enjoy the Summit! David Williams Chairman & CEO Merkle Inc. Confidential 40