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THE RISE OF THE PLATFORM MARKETER: CONNECTED CRM IN A DIGITAL WORLD
© 2014 Merkle Inc. | Confidential 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
1995+ Age of channel
2013+ Age of the customer
Direct-to-consumer business model transformation
Addressability At Scale Creation of national brands
National media and mass marketing
Internet and eCommerce
Social networks & digital media
Contenders we see
© 2014 Merkle Inc. | Confidential 3
In 2012, we introduced the concept of The Connected Consumer and how we believed it would be the new battleground for competitive advantage
Social Print
DM & EM
Display
Search TV/Video
Mobile
Site
Product
LTV Segment
Demographics Life Events
Call center
Meetings
© 2014 Merkle Inc. | Confidential 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
Experience Delivery
Financial Management
Customer Strategy
Financial management informs customer strategy and experience delivery decisions as a closed loop process
These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences
Portfolio Strategy
Segment Strategy Program Strategy
Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation
Media Planning Channel Planning Targeting & Personalization
Measurement & Attribution Budget Allocation In
frast
ruct
ure
& Bu
sine
ss P
roce
ss
Leadership & Organization
What data, processes,
systems, tools and
technology will be necessary?
What outcomes
are we trying to
create and how do we organize to
enable them?
© 2014 Merkle Inc. | Confidential 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
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.
© 2014 Merkle Inc. | Confidential 7
Introducing the addressable
audience platform
© 2014 Merkle Inc. | Confidential 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 4.0 Cookie & Device ID
1990 2014
AAS 3.0 Email Address
AAS 2.0 Phone #
© 2014 Merkle Inc. | Confidential 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
Anonymous Partially Identified Identified Identification:
Knowledge: Unknown Some Knowledge Well Known
© 2014 Merkle Inc. | Confidential 10
Auto
mat
ion
Audience Platforms
Addressability is reaching new levels of sophistication and scale due to the rise of the Addressable Audience Platform
1st Party Data
Automation
Individual Level
Delivery
Audience Owners
CRM Database
3rd Party Data
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
© 2014 Merkle Inc. | Confidential 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
But these will become closed networks forcing the advertiser to answer how to create a single customer view using first party identity management
Third Party Inventory (exchange, ad network, etc.)
© 2014 Merkle Inc. | Confidential 12
The Audience Platform has revolutionized digital and paid social media in the last four years
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 • 1st party data targeting (name and address)
Optimization • Publisher performance • Anonymous cookie data Performance by customer
• 1st & 3rd Party Cookie • Device ID • Known individual
Level of insight
Platforms & Format
• PC • Banners
• PC • Display & Video • Channel specific
• Cross Media/Cross Device • PC • Mobile • Tablet
Anonymous and Individual
CRM Data Driven
Anonymous Individual
Place Place Place
Digital & Social Media Evolution 2009 - 2013
© 2014 Merkle Inc. | Confidential 13
But this is not just happening in media – search is evolving very quickly as well
Universal Platform Differentiated by Device Integrated Media and Site Targeting
How many people are searching and for what terminology
Increased options controlled by the
search engines for delivery Use of Remarketing programs in search
and display to customize
Targeting
Optimization
Level of insight
Formats
Location/Device/Time
Audience Driven
Location/Device/Time
Keyword Keyword Keyword
Search Evolution 2010 - 2013
• Based on exact keyword search behavior with not personalization
• Anonymous by device type and carrier • Geography, day of week and time
functions
• Audience profile data from prior site visitation • Unique experiences based on user profiles
• Match type and keyword • Extended match types • Device Targeting for Mobile • Location specific ads and costs
Performance by customer • Segment • Value • Intent
• 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 14
Why does this matter?
© 2014 Merkle Inc. | Confidential 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 16
For most organizations, the impact of effectively leveraging this platform is in the hundreds of millions of dollars
$39MM $104MM $201MM $452MM NPV of Revenue Impact
Year 1 Year 2 Year 3 Years 4+
Acquisition of new customers
Reduction in churn
Improvement in NPS Scores over Baseline*
$15MM $43MM $93MM $256MM
$24MM $61MM $109MM $196MM
+5 +25 +10 +5
• Use Connected data to understand/predict/model NPS results across subscriber base and target subscribers for Promoter maintenance or Detractor intervention strategies
• 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
• 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 Email
© 2014 Merkle Inc. | Confidential 17
Today, most of the market is constrained in its ability to scale its addressable spend and make a significant impact
Adverse selection is a big problem in non-addressable media – “people I don’t want are the one’s I get to respond”
This results in lack of quality and scale of the remarketing pool
Inability to use addressability to engage high value leads in a relevant experience drives down conversion of those that are quality
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
Unqualified Leads & Waste
Customer Remarketing
Awareness
Consideration
Remarketing
Conversion
© 2014 Merkle Inc. | Confidential 18
Impact of AAS 2.0
+400% Addressable Media Spend: +300% Cost Per Lead: -30-40% Targetable Re-Marketing Pool: +500%
Cost-Per-Conversion: -40% Average LTV per Customer: +60%
% Personalized Interactions +300%
Available Addressable Impressions:
Marketers taking advantage of AAS are “widening the pipe” and driving greater scale and effectiveness through the funnel
Unqualified Leads & Waste
Customer Remarketing
Audience 1 Auto
Property Multi-line
Audience 2 Audience 3
Addressability at Scale
Unknown High-value customer Low-value customer
© 2014 Merkle Inc. | Confidential 19
A new kind of marketer
© 2014 Merkle Inc. | Confidential 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
• Marketers must evaluate their own competency level and decide how best to fill gaps internally and with external expertise
• 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
© 2014 Merkle Inc. | Confidential 21
The Platform Marketer™ embodies the collective competencies needed to successfully exploit addressability at scale
Identity Management
Audience Management
Consumer Privacy & Compliance
Media Optimization
Channel Optimization
Experience Design & Creation
Platforms Utilization
Measurement & Attribution
Marketing Technology
Platform Data
Platform Execution
Platform Enablers
There are 9 critical competencies that must be mastered
© 2014 Merkle Inc. | Confidential 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 23
The Platform Marketer – The Audience Platform Expert
Content & Context Intent & Behavior Anonymous Individual Identified Individual
Context Custom content
Intent Geo-location
Behavior 3rd party segments
The Platform Marketer is a master of the ever evolving Audience Platform targeting and optimization capabilities
Device ID 1st party cookie
Name & email
Probabilistic ID
© 2014 Merkle Inc. | Confidential 24
Twitter handle Cookie 3rd party
ID address Digital set top ID
Mailing address IB ID Pinterest ID
GooglePlus ID Device ID
70’s 80’s 90’s Today
12 Main Street Philadelphia, PA
Email Phone number
00’s
617-555-0728 12 Main Street Philadelphia, PA 617-555-0728
12 Main Street Philadelphia, PA
617-555-0728
12 Main Street Philadelphia, PA
#JohnnyDoe
011001000100110001 //asdohs.hhd.net 617-555-0728
12 Main Street Philadelphia, PA
#JohnnyDoe
011001000100110001
//asdohs.hhd.net
Pinterest: jdoe
JD’s iphone 011001000100110001
011001000100110001
//asdohsd.asiudhscns/html
The Platform Marketer – The Addressability Expert
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?)
Platform marketers bring addressable data skills that facilitate the exchange of identity and data for personalization and relevance.
© 2014 Merkle Inc. | Confidential 25
The Platform Marketer – Programmatic Media Buyer
Programmatic Media Buyer: The Platform Marketer brings programmatic buying skills to the enterprise
© 2014 Merkle Inc. | Confidential 26
The experience blueprint elaborates on the segment plan and provides a detailed view of the customer journey
MOVERS & SHAKERS
Nurtured
Experience
Personalization Enabler
Touch points Engagement Tactic
Offer, Motivation
Evaluate Decide Apply Familiarize Awareness Connect Journey Stage
© 2014 Merkle Inc. | Confidential 27
The Platform Marketer – Media & Channel Optimization
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 bi-directionally back forth from the Conductor to the end point execution apps
The net result being a singular, highly relevant consumer experience
Similarly, The Platform Marketer implements and manages a cross-channel personalization platform that creates a singular consumer experience
The Conductor – Cross Media Decisioning Site
Decisioning Media
Decisioning Search
Decisioning Call Center Decisioning
EM/DM Decisioning
$
Real Time Data and Integration Services
Targeting Currencies
The Platform Marketer
© 2014 Merkle Inc. | Confidential 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 29
Audience Platforms
Wor
kflo
w
Channel Execution Media Execution
Marketing Database
Identity Management
Analytics
Integration
DMP Decision Management
DSP Search Ad Serving Site SFA/Contact Center
Business Rules Engine Personalization Engine Decisioning
Algorithms
Audience Management
RT Data Transfer Syndication
Connected Attribution Forecasting/Simulati
on Business Intelligence
Onboarding CDI/DDI Event Management
Customer 360° Preference Center Event Stream
Cam
paig
n M
anag
emen
t C
onte
nt
Man
agem
ent
MR
M
Messaging Mobile
Web Services APIs Tag
Management
Wor
kflo
w
Channel Execution Media Execution
Marketing Database
Identity Management
Analytics
Integration
DMP Decision Management
Audience Platforms
Media specific platforms that manage the execution and optimization of consumer experiences across media including
search, digital media, and messaging
Channel specific platforms that manage the execution and optimization of consumer experiences across media including site,
app, POS, and contact center
Enables real-time interaction between the DMP and decision management platforms and media/channel execution
The orchestration of marketing tactics via algorithms and business rules across interactive media and
channels
Enables creation and management of audiences for real-time
marketing and syndication to first and third party audience platforms
Transforms data into actionable insights to inform relevant
marketing executions and enable measurement strategies
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 management.
Aut
omat
es th
e m
anag
emen
t of c
onte
nt a
nd th
e m
arke
ting
busi
ness
pr
oces
s ac
ross
the
orga
niza
tion
and
partn
ers
All of these enabling capabilities are managed by the design and integration of the technology stack
© 2014 Merkle Inc. | Confidential 30
The Platform Marketer – Measurement & Attribution
3% 14% 3% 5% 5% 5% 15% 5% 5% 40%
100%
Day 8-30 Day 1-7 Day 0-1
New Customer
Actual experience
Direct or Rules Based
Modeled
$
TV view Direct mail sent Alt Media Display view Email Website visit Paid search click
Mass and Offline Digital @
@
@
@
@ 5%
Credit over applied to bottom of funnel touches. Other touches often ‘invisible’
Creates flawed financial view of performance
Model-adjusted interaction
Most accurate and actionable
Leverages a fractional approach to attribution and quantify the incremental impact of each marketing activity
© 2014 Merkle Inc. | Confidential 31
The Platform Marketer - Consumer Privacy and Compliance
Federal Regulators
State Regulator
s
Global Regulators
Certifications Organizations
Industry Trade
Associations C
onsu
mer
Plat
form
Mar
kete
r
Standards Organizations
Privacy Advocates
Privacy Enforcement & Protection Unit
Associazione Italiana Direct Marketing
Global Legislative
Stakeholders
U.S. Privacy Laws
SB 27 California Civil Code : Shine
the Light
U.S. Legislative Stakeholders
Senate Committee on Commerce, Science &
Transportation
Global Industry Trade Associations
CA Readers Privacy Act
CA SB 1386
© 2014 Merkle Inc. | Confidential 32
Implementing customer centric business strategy in
an addressable world
© 2014 Merkle Inc. | Confidential 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
The specific data assets, technology, analytics, business and optimization process that drive customized experience cannot be easily observed or copied
Brand, media and channel can be observed by the marketer
© 2014 Merkle Inc. | Confidential 34
Connected CRM is the framework through which we aid our clients in the organizational transformation to required to exploit AAS
Enterprise segmentation, which includes value and lifecycle dimensions, forms the foundation of CCF
Experience Delivery
Financial Management
Customer Strategy
Financial management informs customer strategy and experience delivery decisions as a closed loop process
These strategies are then translated into actionable media and channel plans that result in highly personalized, targeted experiences
Portfolio Strategy Segment Strategy Program Strategy
Experience delivery performance is continuously attributed across media and channels which, in turn, drives optimized budget allocation
Media Planning Channel Planning Targeting & Personalization
Measurement & Attribution Budget Allocation In
frast
ruct
ure
& B
usin
ess P
roce
ss
Leadership & O
rganization
What data, processes,
systems, tools and
technology will be
necessary?
What outcomes
are we trying to
create and how do we organize to
enable them?
The Connected CRM Framework (CCF)
© 2014 Merkle Inc. | Confidential 35
It’s not just about capabilities, we need to develop capabilities and define the proper operation model
Operating Model
Single campaign, simple data, little offer and customer
customization
Basic multi-channel, model integration, and campaign
automation
Contact Optimization, multi-touch campaigns, integrated measurement platform
Customer Value Optimization fully integrated programs & campaigns
Over-invested (poor return on capital)
Under-invested (poor return on management bandwidth)
Cap
abili
ty M
atur
ity
Ideal investment zone
Bottom-up path builds infrastructure and seeks to leverage incremental gains to expand effort and drive organizational
change (requires permission)
Top-down path compels Organizational change and rapidly
enables infrastructure for efficiency and effectiveness
(requires sponsorship) [Vice President]
[CMO]
[C-suite]
[CEO]
[Key decision maker]
Infrastructure focus, basic capabilities
[Director]
Level 3
Level 4
Level 5
Level 2
Level 1
© 2014 Merkle Inc. | Confidential 36
Phased Evolution: Leveraging a Customer Centric Business Strategy
Fully Integrated Experience
Offline Channel
Integration
Digital Channels
Integration
Mass Media Integration
Digital Media Integration
Email and DM
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
© 2014 Merkle Inc. | Confidential 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
Measurement & Optimization Audience Mgmt Experience Strategy & Planning Technology
Portfolio Management
Segment Leadership
Experience Design & Planning
Consumer Preference & Governance
Product Management
Brand Leadership
Addressability Optimization
Audience Platforms
Innovation and Testing
Measurement & Attribution
Decision Science
Marketing Stack
Consumer Data
1st Party Platform Leadership 3rd Party Platform Leadership
Digital Attribution Personalization Portfolio Strategy
Financial Management
Segment Leadership Machine Learning Consumer Advocacy
Identity Management
Consumer Data Governance
Programmatic Media Mgmt
CIO CMO CCO COO CFO CEO
© 2014 Merkle Inc. | Confidential 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.
Why change
What’s changing
Make changes
A B
C
Use Case Development (Outside-In)
Assessment (Inside-out)
Phase 0 Business Case Benefits Realization
Blueprint & Roadmap
Change Integration
Executive Sponsorship and Governance Team
© 2014 Merkle Inc. | Confidential 39
Key Takeaways
The audience platforms have become highly addressable and are reaching massive scale
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
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
Identity Management
Audience Management
Consumer Privacy & Compliance
Media Optimization
Channel Optimization
Experience Design & Creation
Platforms Utilization
Measurement & Attribution
Marketing Technology
Platform Data
Platform Execution
Platform Enablers
© 2014 Merkle Inc. | Confidential 40
Thank You and enjoy the Summit!
David Williams
Chairman & CEO [email protected]
443-542-4175