Chief Marketing Technologist

Balancing marketing technology and IT at a Fortune 500 firm

Marketing technology management can look straightforward on paper, when analysts and pundit-bloggers such as myself draw simplified diagrams of new organizational structures with a few quick brushstrokes.

But the real work of implementing these organizational changes for "the new marketing" — and the cultural shifts entangled in that mission — especially at a major Fortune 500 company is considerably more complicated. I have tremendous respect for the people tackling that.

Therefore, it was my pleasure to be able to interview Mayur Gupta, the Global Head of Marketing Technology at Kimberly-Clark, to glimpse behind the curtain of that transformation in his organization.

Tell us a little about your background and what your role as Global Director, Marketing Technology at Kimberly-Clark entails.

I'm a marketing technologist who is part creative, part strategist, and part technologist. I recently joined Kimberly-Clark in August 2012 as the Global Head, Marketing Technology, a role that sits and fits within the CMO's world and the global marketing organization.

It's a bit difficult to pen down any role in marketing because it almost has to evolve at the pace of everything happening around us. But as we speak at this very moment, it involves curating, identifying, and establishing an agile marketing technology mindset, behavior, and a global culture — to not only execute but innovate our brand strategies.

"This group almost operates as a 'change agent' within our organization."

I intend to do this through a Marketing Technology Group (MTG) that works very closely with our IT organization. I am part of a Digital & Relationship Center of Excellence (DRCOE), which is packed with some incredible leaders across digital strategy, creative, commerce, and now marketing technology. This group almost operates as a "change agent" within our organization. I see the MTG defining the global vision, and blueprint to enable our brands' strategies and eventually deliver that most desired and relevant consumer experience.

Prior to joining KC, I pretty much spent most of my career at SapientNitro. The first few years there, I did everything from being a core Java developer to being a DBA, Unix administrator, and solutions architect. However, the last 7-8 years have been completely focused on digital marketing and marketing technology. From architecting and engineering a multi-channel integrated marketing automation and ad serving platform and running an innovation and digital production studio to playing a more thought leadership and marketing technology strategist role for a number of Fortune 500 clients.

How has it been making the transition from an agency to a dedicated role on the client side — especially around marketing technology? What did you expect? What has surprised you?

Interesting would be an understatement. I think it's more empowering in a lot of ways. Working on the services side in a leading agency, you are are more or less guided by certain boundaries or parameters. At times these are financial constraints from clients and sometimes very specific business challenges or priorities.

On the client side, it's a white canvas, which is a challenge — and an even bigger opportunity — especially if you're working in the evolving and rather chaotic space of marketing in a digital world. I don’t think I went in with any kind of expectations. I went in like a sponge ready to absorb with a very open mindset.

I have been pleasantly surprised though with the agility and the spirit to adopt and adjust to changes for a big organization like ours. I think we are pretty uniquely positioned in the way we have the DRCOE as an "idea engineering" layer that drives changes and strategic thinking, helping to mould the new norms and conventions.

"It is a gradual mindset shift, an effort to strike a balance between [IT and marketing technology]."

I give a lot of credit to our leadership overall, specifically in the marketing organization, to have the foresight a few years back to establish an "agency" of sorts within a bigger organization. It is an effort to bring digital strategy, creative and consumer experience, e-commerce and marketing technology together — something that a lot of agencies still struggle to adopt.

There is a long road ahead, especially the emergence of marketing technology within a pretty strong and widespread IT footprint. It is a gradual mindset shift, an effort to strike a balance between the rigor, process and focus on standardization, scale and globalization of an IT organization and the need for agility, nimbleness, and innovation of marketing technology to deliver excellence for our consumers.

What do you think the relationship should be between a marketing technology group that lives within the marketing department and the IT department? How has that been playing out in your organization?

This is where it gets really interesting. Firstly, I don't think we can draw a firm line that puts the Marketing Technology Group (MTG) in the marketing organization. I totally believe that it needs to exist, but where it lives, is very dependent on the organization, its leaders, and their mindset and culture.

The more important aspect is the recognition of evolution from a more conventional IT world. In my mind, an MTG can never replace IT. I see the MTG as a more strategic, innovative, and pretty lean layer. IT, on the other hand, is a more robust and scalable layer focusing on delivery and execution. One cannot replace the other. It's collaboration vs. competition.

An analogy that I use is the process of building a tall, multi-story building. There is a crucial role played by the architect to create the "blueprint." This is the role of a marketing technologist. But arguably a more important role is played by the actual builder — the IT organization — with a large team to transform the dream into reality. Irrespective of where the architect and the builder live, same organization or different, as long as they collaborate and understand each other, the building won't collapse.

"Both IT and marketing leadership are working very closely together to lay down the foundation for marketing in a digital world."

This journey at KC has been inspiring. We are in an evolutionary phase where both IT and marketing leadership are working very closely together to lay down the foundation for marketing in a digital world. It's a conscious effort to strike a balance and avoid either extreme. Needless to say, such cultural and behavioral shifts are hard to adopt, but we are on the right path and moving ahead with lightening speed to bring the right changes.

How does your marketing technology team interface with the rest of the marketing department?

The MTG is still in its infancy to be honest, but the engagement model is fairly simple — basically drop all lines and be part of the team from inception to delivery. The key aspect is a belief that technology (marketing or information) is no longer a commodity. It is as strategic as digital strategy and as creative as anything else we design.

The MTG plays a more proactive role in defining technology strategy and vision, rather than a reactive one. The recipe for success is a tight collaboration and ideation across strategy, creative, and technology to deliver a consumer experience. That is how I see the MTG operating with rest of the marketing organization, as well as brands and our digital partners and agencies.

"The recipe for success is a tight collaboration and ideation across strategy, creative, and technology."

From a technology perspective, what are some of the biggest challenges that you see marketing departments facing over the next year? How should they tackle them?

I personally feel that the well-known technical challenges, like big data or attribution and modeling, are easier to solve. There are enough really smart people out there that will solve these through technology. The challenges I see lie outside of the core technology.

The first is what I'd call "The Challenge of Too Many." There are too many shiny disco balls out there. Difficult to say if this is a bubble, like the one we saw in the 90's, but the marketing world is definitely seeing more movement and innovation than any other sector at this moment. I think many marketing organizations are sucking things in like a vacuum — a tendency to pick up every shiny object out there. Big data, mobile first, predictive modeling, and so on.

The challenge is a lack of a connected thinking that brings all these different pieces together in a cohesive and well-knit machinery. We all seem to be on the soccer field. It's time for someone to go into the stands and have a top level view, to be able to orchestrate and position the right players to be at the right position at the right time.

"The challenge is a lack of connected thinking that brings all these different pieces together in a cohesive and well-knit machinery."

Secondly, the diversity in the digital space is bliss, but if it does not move towards a more consolidated foundation, it will be a big challenge. I'd like to see the likes of Adobe, IBM, Oracle, and Salesforce come up with an open standard that allows marketers to focus on new and creative strategies and consumer experiences — and not worry about connecting 10 commoditized technology layers. A solid and standardized marketing operating systems — analogous to Android and iOS — with an open standard and framework to allow experiences through "apps" to be seamlessly installed.

Lastly, there's a challenging in shifting mindset and behavior in the way we perceive and deliver technology. Adapting to the fast pace of the digital world, adopting agile marketing, believing that — at times — done is better than perfect. I mean these are interesting times for marketing technology and very easy to fall into the trap of thinking of technology as an end and not an enabler.

If you could offer 30 seconds of advice to other CMOs on marketing technology, what would you say?

It's time to break free from the CMO-CIO barrier. Marketing technology demands a mindset, a behavioral and cultural shift, that goes beyond organizational boundaries.

"It is not a curriculum that's taught, but an experience that's gained."

Unfortunately it is not a curriculum that’s taught, but an experience that’s gained through collaboration and a common vision towards impactful consumer experiences. The sooner you adopt it, the faster you will respond to the ever-changing digital and consumer landscape.

See first what others see eventually and don't hesitate to fail.

Thank you, Mayur!

3 epicenters of innovation in modern marketing

Here's another way to visualize the relationship between big data and the other innovations happening in the marketing department.

I propose that there are three epicenters of innovation in modern marketing:

The first is customer communications and the revolution brought about by social media. Marketing communications has, rather quickly, moved from being a one-way broadcast to a more personal, two-way interaction with customers, prospects, and influencers, all interconnected together.

Organizations have had to embrace operational and cultural changes to adapt — many are still wrestling with those changes. But while technology certainly triggered this wave of innovation in customer communications, the software in this space is probably the least technically challenging for marketers to adopt. There is great innovation in this sphere, but it's not primarily technical in nature.

The second is customer analytics, using analytics and big data to better understand and measure customer opportunities. There is unquestionably a lot of value to be unlocked here, which is why the "data revolution" in marketing is so big right now. However, these innovations are generally much more technical in nature.

While there are some easy first steps here — high-level dashboards, basic web analytics, and data visualization tools such as Tableau — the technical water quickly gets deep. I picture it like a "continental shelf" of shallow data analytics. Once you drop off the edge into the deep data ocean, the software is considerably more complicated and isn't nearly as plug-and-play.

To really master customer analytics requires harder skills, such as statistics, modeling, predictive analytics, programming, data mining, etc. Acquiring these skills and integrating them into the marketing team will likely take more time and effort than the adoption curve associated with social media.

The third is customer experience, delivering remarkable customer experiences at every touchpoint in the customer lifecycle. In our digitally-malleable world, marketers can now wield technology to craft customer experiences that are powerfully differentiated — on a scale that was impossible to conceive not too many years ago.

I believe that the scale of this "experience revolution" will dwarf the other two.

There's already a growing customer experience movement in the marketing department — with the embrace of user experience and design (not just art/graphic design) professionals. But ultimately code is the clay from which most of these experiences are sculpted. It's with a mix of pre-packaged marketing software, custom developed applications, technical configuration, and plenty of "script" glue to tie everything together that these experiences are actually built and delivered — leveraging the state-of-the-art in hardware technologies (e.g., the latest smartphones and tablets) and major web services (e.g., the latest capabilities in Facebook).

Understanding how these technologies can be synthesized into compelling customer experiences — and having the technical capabilities to execute on those visions — presents a significant challenge for most marketing teams. But the opportunity is huge, strategically elevating marketing from communications to experiences. Marketing is still the champion of the brand. But the brand is now fully a direct function of customer experience.

This mission is "big experience."

Big experience is nearly unlimited in the innovations that lie ahead. They're not all technical in nature, but a significant portion of them are rooted in technology. To pursue these opportunities, marketing must expand its technical capabilities beyond data analytics. This is why marketing technologists, not just data scientists, should be a part of every marketing team's growth plans moving forward.

Of course, some of the most fascinating areas in marketing are at the intersections of these three domains. For instance, the intersection between customer analytics and customer experience, where personalization and big testing are sprouting.

Fundamentally, modern marketing is about combining all these innovations into a cohesive strategy and operational structure.

That is why, although big data is big, it shouldn't distract marketing leaders from constructing an organization that is capable of orchestrating all of these innovations together into a powerful and differentiated brand for the 21st century.

CMOs must become systems thinkers and culture champions

There are few companies that are witness to The Great Digital Transformation of the world at the scale of IBM.

And as that transformation overtakes the marketing department — an epic collision of cultures like no other in the history of business — I envy the court-side seats they have seeing this play out across many different organizations, in many different industries, all around the globe.

So I was excited by the opportunity to interview John Kennedy, IBM's Vice President of Corporate Marketing, on his perspective of this transformation — both with their customers and within their own organization.

Can you start by telling us a bit about your background and your current role as VP Corporate Marketing at IBM?

I'm IBM's Vice President of Corporate Marketing, where I'm responsible for the company's global brand development and marketing programs. I also lead marketing for IBM’s “Smarter Planet” initiative, which will reach its 5th anniversary this fall.

I started my marketing career at Procter & Gamble, where I worked on brands such as Downy, so my career has run the gamut from B2C to B2B.

I often quote IBM's CMO study from last year stating that marketers felt they were facing enormous complexity and that many of them didn't feel prepared for it. Would you say that's still true today? Why?

Yes and what's more, we're still at the beginning of this journey. The digitization of business and the growth of mobile commerce are in their infancy, especially when you look at emerging markets. For a few years now, IBM has been describing this concept of the world becoming more instrumented, interconnected, and intelligent — that the planet is getting smarter. We are now seeing this happen.

"IBM has been describing this concept of the world becoming more instrumented, interconnected, and intelligent."

Businesses are performing at new levels as a result of data — much of it customer data. This growing amount of data — which customers are generating from an increasing variety of sources — present a huge opportunity for CMOs. Marketers are analyzing big data to gain nuggets of insight into what customers want, which enables companies to deliver better products and services.

That changes the role of the CMO. So rather than focus on advertising campaigns and promotions, today's CMOs can use big data to understand how people connect, what they desire, and what motivates them to make a purchase.

We're seeing the marketing function change in three powerful ways. Marketers must get to know each customer as an individual; they must create what we describe as a "system of engagement" to create seamless experiences for customers across channels; and finally, marketers need to create a brand and company culture that are authentic and inseparable.

This is a big change from the past, when marketers planned and executed on the basis of aggregated demographics and broad campaigns. Big data provides marketers new visibility to their customers at the individual level, and to make marketing feel like a welcomed service instead of a promotional pitch. Content-oriented marketing models enable this shift since marketers are connecting with customers in new ways beyond demand generation and brand awareness.

"This is a big change from the past, when marketers planned and executed on the basis of aggregated demographics and broad campaigns."

How is the organizational structure and talent composition of the marketing department changing to adapt to this complexity, especially around its increased dependency on software and data?

Data-driven marketing is still in its infancy and some industries, like retail and banking, have a head start. Don't forget that marketing is probably the last C-suite function to be integrated with its own enterprise IT stack, playing catch-up to areas such as finance, HR and supply chain.

But CMOs are responding by integrating new kinds of capabilities on their teams. We're seeing new job titles. Not just to analyze and model information, but to create insights in new ways and better understand preferences. Within IBM, my teams are now working much more closely with IBM Research on areas like front-office transformation and social media. We're working with several scientists right now to understand the evolution of commerce and to improve our ability to quantify the business outcomes from some of these trends.

"CMOs are responding by integrating new kinds of capabilities on their teams."

How does this affect the relationship between marketing and IT?

It is creating a new partnership that is becoming essential to the company's performance. Technology is increasingly determining the customer experience in almost every industry.

This is driving CMOs and CIOs to align their strategies and create new working relationships. It's also helping CMOs and CIOs gain new visibility into the new realities of their mission — CIOs must move beyond a "firewall mentality," and CMOs must become "systems thinkers" so their ideas can scale across multiple customer sets, markets and countries.

"CIOs must move beyond a 'firewall mentality,' and CMOs must become 'systems thinkers' so their ideas can scale across multiple customer sets, markets and countries."

Since last spring, IBM has convened hundreds of CMOs and CIOs at events here in the U.S. and Europe. What we're hearing is that CMOs and CIOs know they must join forces. Because of their lack of technology training, CMOs are finally starting to look in-house to their CIOs to get a better handle on this new landscape. Conversely, more CIOs are looking for ways to work with CMOs as marketing continues to evolve.

So despite their different backgrounds and cultures, CMOs and CIOs need each other more than ever. We're definitely seeing that.

How are these changes impacting the culture of marketing?

Certainly, marketers are maturing as "technologists" and you can see that from the kind of work we are doing.

But there is another another aspect that is getting more attention. Because of the transparency of social media, CMOs are beginning to realize that they have to become involved in building a company culture that's in sync with the brand.

Every day, consumers are judging brands by what they do and what they say, and people don't hesitate to tell their friends — or tell the world — about gaps between the marketing promises and the actual experience. So much of a company's operations are shaped by its culture. As a result, we're finding more CMOs engaged in discussions about the company’s culture and how this impacts the brand.

"So much of a company's operations are shaped by its culture."

If I may ask, what has that transformation looked like at IBM? Can you share one of the challenges and how it was overcome?

A cornerstone of our transformation is to make IBM a social business in every aspect of the organization. This improves our ability to collaborate and innovate, to stay connected with clients, partners, universities and other communities, and to train the next generation of leaders.

This dates back to 1997, when IBM recommended that employees get out onto the Internet, at a time when many companies tried to restrict access. In 2005, we encouraged employees to embrace blogging, and in early 2008 became the first big company to issue social computing guidelines for employees. Today, we have the largest presence on any social platform you can think of, and we continue to provide resources, training and encouragement for the global workforce.

It's also transformed the way we reach out to clients. There's a lot of noise in social media, and it's a challenge to translate social touch points into sales leads. IBM has transformed its sales organization into a social selling juggernaut. In addition to lead generation and market basket technologies and active personal engagement on channels such as LinkedIn and Twitter, we use social listening tools such as sentiment analysis to identify opportunities and sales leads.

If you could offer just one, 30-second piece of advice to CMOs today, what would it be?

Reach out to your CIO. Help influence your technology strategy to migrate from the back-office to the front-office. Raise the awareness of your C-suite colleagues on the impact of a company's culture on customer experience and therefore the brand. Be a role model for change and transformation since that's the only constant on a smarter planet.

"Be a role model for change and transformation since that's the only constant."

Thanks, John.

The big data bubble in marketing -- but a bigger future

Let's face it: marketing is in a big data bubble.

That's both a "big data" bubble and, more generally, a big "data" bubble. Everyone is talking about data, big data, data analytics, big data analytics. Vendors, analysts, consultants, pundits, bloggers, etc., are all falling all over themselves to squeeze these terms into their propaganda content marketing.

As just one example, three out of the Top 10 predictions for CMOs by IDC revolve around data. How CMOs must have a strategy for how market-driven data will contribute to corporate objectives (#1). How CMOs will be in jeopardy if they fail to produce a robust data analytics function (#4). How 50% of all new marketing hires will now have a technical background as the CMO scrambles for data analytics proficiency in the department (#5).

In fact, the subtitle of IDC's accompanying webinar was Today's CMO Becomes a Master of Data.

Now, I love data as much as the next techy-geeky-marketing-wonk-with-a-blog. But what strikes me about all this explosive data chatter — in no small part, driven by the peaking hype cycle of big data as a miracle drug — is how little recognition is being given to the operational implications of actually using data.

For instance, IDC's predictions for 2013 state that the CMO will be given full responsibility for "data analytics" — and, in some unspecified way, required to tie that to business growth. The hiring of people with technical backgrounds in marketing is expressly for "data analytics proficiency." The wholesale replacement of legacy CRM infrastructure is justified by "greater insight into the revenue impact of marketing and sales."

That's an awful lot of data, analytics, and insight — but not much committed action beyond observation and fodder for internal meetings with PowerPoint. It's as if the plan is roughly:

1. Analyze data — preferably big data.
2. ???
3. Profit.

This feels eerily analogous to the dot-com bubble of the late 90's to me (substitute "analyze data" with "capture eyeballs") in two ways.

The bubbly part of the big data bubble

First, the expectations of what big data will deliver on its own, especially in the short-term, are massively overblown. Lots of people are throwing lots of money at the promise that big data will, somehow — I don't know how exactly, it's technical and mathy — tame the fractured, fragmented, frenzied landscape that is modern marketing and crunch all of those complications into more customers. All as a well-oiled machine.

Regrettably, it's not that simple.

A smaller set of articles — alas, reasonable pragmatism doesn't generate nearly as many page views as wide-eyed prognostications of marketing data rapture — have explained why. Michael Wu, an analytics scientist, wrote a great piece on The Big Data Fallacy on TechCrunch, explaining why data is not the same as information, which is not the same as insight — a good place to start.

Gord Hotchkiss tackled the question of whether big data will replace strategic thinking (short answer: no), writing, "There seems to be one assumption that I believe is fundamentally flawed, or at least, overly optimistic: that human behaviors can be adequately contained in a predictable, rational, controlled closed-loop system." He draws upon Justin Fox's book, The Myth of the Rational Market, which illustrates the dangers of oversimplifications inherent in modeling — and how that disastrously played out in the financial crisis of 2008.

Actually, it turns out that this debate about the limits of data goes back 200 years. Media researcher Yaakov Kimelfeld recently wrote a Metrics Insider column titled A Demon Under the Streetlight that explains how this overreaching data-has-all-the-answers delirium is a reincarnation of Laplace's demon. The 19th-century mathematician Laplace postulated that if you knew everything about the exact state of the universe at any one moment in time, you could then perfectly extrapolate everything about the past and the future. As Kimelfeld points out in his article, however, "Big data is not all of the data." Not even close.

Even The New York Times felt the need to point out the inflated expectations of data in marketing in a Sunday feature, Can Social Media Sell Soap? (Short answer: maybe, but not necessarily the way people first thought.) Stephen Baker calls "the belief that with enough data, all of advertising could be turned into quantifiable science" a trap. "Even as researchers swim in data that previous generations would have swooned over," he writes, "They struggle to answer crucial questions regarding cause and effect. What action can I take to get the response I want?"

You get the point. Big data is not a panacea. Beware of tulip mania.

The real revolution: from big data to big testing, big experience

However, there's a second way in which this big data bubble resembles the dot-com bubble: underneath the hype, a truly major revolution is happening.

For all the silly dot-coms that skyrocketed to great fame — and then self-imploded when reality intruded on their business models — the Internet did go on to fundamentally transform business on a massive scale. Amazon, Facebook, and Google — all pure Internet companies — are widely considered three of the four horsemen of the global tech world today. But their businesses are about more than capturing eyeballs. Eyeballs are there, but it's a small piece of a bigger picture.

The real data revolution in marketing won't be a sugar-coated miracle pill that anyone can adopt simply by buying some software, hiring a data scientist, and pointing them at a cloud full of data. The real revolution in data will be a change in organizational behavior and culture — and those changes are hard and take time. Many organizations will struggle with the shift, and frankly, many will be usurped by new competitors who grow up natively with this new worldview.

So what exactly is the real revolution?

It's not data. It's not even data analytics. It's being data-driven.

I know, that sounds pointlessly subtle, but bear with me. As Mark Twain would say, this is the difference between the lightening and the lightening bug. Being data-driven is not the same as just embracing data and analytics. Data and analytics are small pieces of a bigger picture.

The bigger picture: creating an organization that can confidently experiment, innovate, and adapt on a broad scale. Being truly data-driven embeds this deeply into an organization's culture.

There are three parts to this, which I've illustrated at the top of this post:

1. Collect and organize data and wield tools to extract information and insight from it. This is the part that big data has to offer. But some of the most valuable output from such data analytics will be mere hypotheses — interesting correlations of factors and behaviors in ever-more-finely-sliced customer segments that may have meaningful impact. But these are only seeds of ideas, possibilities
2. Take those hypotheses and be able to quickly and effectively test them to prove cause-and-effect: that those factors can indeed be leveraged to influence customer behavior. Empowering many people throughout your organization to run these tests — and to fearlessly test big ideas — is a large-scale transformation to organizational behavior and culture that we can call big testing.
3. Apply your targeted data and proven tests towards delivering better customer experiences — through the web, mobile devices, call centers, in-store and in-person interactions, etc. It's not just making the same experience better for everyone. It's delivering more specialized experiences to many different customer segments. This mission is big experience.

There's plenty written about big data out there, so we won't elaborate further on that part — other than to reemphasize that it is predominantly about analysis, not action. It's by connecting big data to big testing and big experience that you turn that analysis into action. That's modern marketing alchemy: transforming lead (data) into gold (better, more profitable customer experiences).

But it's worth expanding a bit on what's meant by "big testing" and "big experience" — and why they're such a big leap for most marketers.

Making a big deal out of big testing

A few months ago, I wrote a post, "We want to test bold, new ideas that always work." It highlighted recent research by the Corporate Executive Board showing that the far majority of Fortune 1000 marketers think their organizations are not effective at test-and-learn experiments. One reason why: at least half didn't think an experiment should ever fail.

I believe this is the single biggest obstacle most organizations face: their culture and politics dissuade people from trying experiments because failure of an experiment implies failure of the tester. Who wants to stick their neck out in that environment? So either people don't test anything, or they test in a non-controlled manner so that outcomes are comfortably subject to caveats and interpretations.

Or — and I've seen this in landing page optimization for years — they limit themselves to extremely minor, in-the-weeds tests, such as tweaking the words in a headline or changing the button color on a shopping cart. Such superficial tests risk little, but they rarely gain much. Perhaps the greatest damage they do is that they give people the illusion of engaging in real experimentation. ("Sure, we run tests all the time!") The Shakespearean label for that kind of testing: full of sound and fury, signifying nothing.

Big testing is qualitatively different.

There are three ways in which big testing earns its "big" label:

First, it's about testing big ideas. Headlines and button colors are fine, but they barely scratch the surface. The real power of testing is unleashed when you use it to learn ways of engaging entirely new segments of customers or to pioneer innovative new ways of selling or delivering your product or service. It's about taking the surprising insights that big data may reveal and proving (or disproving) their value and efficacy.

There's a classic post by Eric Ries, author of The Lean Startup, that explains why learning is better than optimization. "The right split-tests to run are ones that put big ideas to the test. For example, we could split-test what color to make the 'Register Now' button. But how much do we learn from that? Let's say that customers prefer one color over another? Then what?"

A good way to know if a test is truly meaningful or not: state out loud what the hypothesis is. If there is no hypothesis, or it's something patently banal — like "chartreuse green buttons will have at least a 0.01% increase in clicks over forest green buttons" — then you're just rearranging deck chairs on the Titanic.

Second, big testing is not restricted to a tiny priesthood of test-masters who jealously guard the data, tools, or governance rights for running tests. Big testing empowers and encourages an open, big team of testers across the organization. Many different people are given the capability to run tests in the context of their particular work.

Big testing is analogous to social media marketing in this regard. The best social media programs today thrive when they have contributions from a wide array of participants throughout the organization. Of course, this is usually best when there's a strong shared vision and some basic training — enough to keep people loosely coordinated and out of trouble. But harnessing a (relatively) large and distributed force is a source of great power — both in sheer manpower and in rich diversity of ideas.

I think of this as massively parallel marketing — a nod to massively parallel computing that makes the processing of big data feasible. Massively parallel marketing makes the taming of the fractured, fragmented, frenzied landscape that is modern marketing possible.

Massively parallel marketing covers a much broader set of possibilities much faster, but it is a fundamentally different kind of organization than the traditional command-and-control hierarchy.

Third, and perhaps most important of all, big testing is a big deal in the organization. It's championed by executives from the top-down. Experimentation isn't a risk to your job. On the contrary, not experimenting — in particular, not experimenting with big ideas — will put you out of favor.

I was at a big data conference a month ago where Gary Loveman, CEO of the Caesars casino empire, gave a presentation about how important meaningful testing is in his organization. "There are three ways to get fired from Caesars," he states matter-of-factly. "You can steal from the company. You can harass a co-worker. Or you can fail to have a control group for an experiment."

That's making a big deal of testing.

At that same conference, Hal Varian, the chief economist at Google shared that Google runs around 10,000 experiments per year, with about 500 experiments going on at any one time. Testing is an integral part of their company culture.

It's worth pointing out that both of these companies are superstars when it comes to big data, but in both cases, they strongly emphasized the criticality of running real-world tests to capture the value buried in that data. As Hal Varian said simply, "Experimentation is the gold standard of causality." It tells you which actions generate the best response.

Big experience makes a big impression on the customer

"It's completely meaningless when the fulcrum point between big data and big experience is a 120x120 pixel banner ad vying to interrupt your game of Paper Toss," wrote Adam Kleinberg in an insightful AdAge article titled Don't Let Growth Fool You: Mobile Advertising Is Still Failing. Amen, brother.

The incredible potential of big data — and big testing, for that matter — is near worthless if an organization can't employ it in the service of delivering remarkable customer experiences. Big experience should be the big tent under which big data and big testing sing and dance.

There are three important connections between big experience and big data/big testing:

First, data and testing give direction to the burgeoning customer experience movement. Customer experience is becoming the banner under which modern marketing marches to victory. It's why everything is now marketing. The tectonic shift of marketing's responsibilities, from mostly customer communications to increasingly lifecycle customer experiences, is one of the 5 meta-trends of modern marketing.

It's an opportunity for marketing to shine at the highest level of the organization.

But as marketing seeks to qualitatively improve customer experience — to differentiate themselves from the competition in big ways in the minds of their audience — they face a dilemma. Building amazing customer experiences is a lot of work, time-consuming, and expensive. Taking a "build it and they will come" messianic approach may have worked for Steve Jobs, but that's hard to replicate predictably.

Using big data and big testing provide a structured and systematic way to hone in on the right experiences to build big. Designers and customer experience professionals can leverage these capabilities to identify rich, new pockets of opportunity for exploration, as well as to refine their productions along the way. Done properly — where big data and big testing are employed in the service of remarkable customer experiences — the relationship between these parts can be harmonious, not contentious.

Data and testing minimize the downside and maximize the upside of pursuing big, new customer experience innovations.

Second, big testing is often only valid if the customer experiences in which it's executed are good. If you run a split-test of two concepts, say offer A (a price emphasis) and offer B (a quality emphasis), testing a hypothesis of which will motivate a particular customer segment more — but both experiences are kind of crappy — then the results of your test are useless.

Probably both will perform poorly, but maybe offer A gets slightly more traction. But it's not unequivocally because the market prefers price over quality. The audience exposed to offer B may have found the offer of high quality, juxtaposed with an experience that stunk of low quality, to be incongruous and have no credibility. Superficially claiming "quality" is not the same as truly exuding quality.

At the very least, the customer experience can't detract from the test. But it's far better if big testing is a comparison of two very good customer experiences to see which is best.

Third, possibly the most profound, is that big data and big testing give us a way to construct amazing customer experiences around customers rather than products.

See, even though we know we're largely past the age of mass marketing — at least in terms of channels and touchpoints — the mindset and organizational structure of most businesses still revolves around fixed products and services. Even as they try to embrace a more customer-centric way of selling those products and services, they're still anchored to segmenting their market by product at their core.

"Most companies count their profits in terms of products, not customers," remarked Gary Loveman at that conference in answer to the question of why most companies are so bad at using analytics to drive better results.

The real vision of big experience is using data and testing to reconfigure our organizations around our different groups of customers, finding and favoring the most profitable and crafting ever more tailored experiences to each. I'm not saying that lightly — I appreciate how big of a challenge that is. But ultimately, that is how businesses will unlock the massive value that the big data movement is promising.

Data is fuel — invest more in the engine

So let's circle back to where we started.

In the face of all this data mania in marketing, the real revolution is shaping a data-driven organization. Wrangling big data is an important part of that, but big testing and big experience are the ways in which that data lead is turned into customer gold. While there is certainly cool technology available to power that entire "big stack," the biggest part of embracing this revolution will be shifting your organizational structure, behavior, and culture to truly leverage it.

Let me wrap up with this analogy:

Data is like fuel. It's certainly valuable, and there's a big industry emerging around the extraction, refinement, and distribution of that fuel. Hey, Exxon Mobil is a $400 billion mega-corporation.

But the big oil companies would be nearly worthless without the transportation industry. Because it's the engines and the cars and the jet airplanes that use that fuel to move the world. An engine without fuel is fairly useless; but a barrel of fuel without an engine is equally pointless.

It's only the two together — the fuel and the engine — that unleash the potential of both.

If you want to really harness the power of big data, build the organizational engine to use it. That's the bigger future that marketing is headed towards. And it will be as big of a worldwide revolution as the rise of the Internet.

50% of all new marketing hires will be technical

"Starting in 2013, after the CMO realizes that he/she does not have the skill sets in place for data analytics proficiency, 50% of new marketing hires will have technical backgrounds."

That is prediction #5 on IDC's Top 10 CMO Predictions for 2013, released last week by analysts Rich Vancil and Kathleen Schaub.

I dream about bold declarations like that from mainstream analysts, validating the central hypothesis of this blog: marketing is now a technology-powered discipline, and therefore marketing organizations must infuse technical talent into their DNA. According to my wife, I even talk about this in my sleep, which is an entirely different context for "disruptive" innovation.

But really? 50% of all new hires in marketing this year will have a technical background?

That's a mighty bold declaration. Okay, I buy the premise: for many CMOs, 2013 will be the tipping point in recognizing just how much their destiny is wrapped up in data and technology. Survival instincts will kick in, and yes, we'll see a widespread movement to technolog-ify marketing departments from the top-down.

But there will be limits to how quickly this transformation can occur.

First, there's a real scarcity of technical professionals, even more so for those with passion and aptitude for marketing. And there will be enormous competition for those unicorns, not just from other marketing departments, but from marketing software vendors, consulting firms, agencies, and a whole new bumper crop of start-ups, all of whom need this talent in pursuit of their missions. Expect some serious inflationary pressure on these salaries.

Obviously some of this depends on how you define the word "technical." For now, let's assume it's more than a superficial label for anyone who can use Excel and WordPress.

Second, marketing departments have to develop the capability to successfully manage and culturally integrate technical professionals. This is harder than it may seem. Managing technical talent is challenging enough in an all-tech discipline, such as engineering or IT. Managing such talent in a rapidly evolving, cross-discipline environment — the emergent "new marketing" — will have many more nuances to master. Most marketing executives don't have that experience yet.

Start with the hiring: how do you know who to hire? What skills to look for? How to validate them? Do the recruiters you work with understand this new breed? Know where to find them? Appreciate what kind of opportunities and incentives will motivate them to want to work with you?

Once they're hired, how do you organize them in the department? How will they structurally collaborate with other parts of the marketing team? What's their interface to IT? Who reports to who, direct or matrixed? What budget do they have — is it net new or reallocated from somewhere else? How do you measure their performance? What should you expect? What other confounding variables in the organization may hinder that performance? When there are conflicts, what factors should you weigh in resolving them?

How do you acclimate the rest of your marketing team to their new technical peers? How do you synthesize a culture between brilliant marketers who are non-technical — your creatives, your evangelists, your product managers — and these new technical and analytical additions to the team? How do you promote learning and growth from cross-pollination of ideas and experiences and avoid infighting and turf wars?

How do you coach and lead technical marketers to greater success — for your organization and their careers?

Developing this new kind of management capability in the marketing department is essential. But in the rush to hire technical talent, don't underestimate the work required to build an environment where that talent can be successful.

My recommendation would be to start with a seed crystal: hire someone who can be a leader around which a technical marketing team can be grown. This is the role of the chief marketing technologist — or whatever "marketing CTO"-like title you prefer. The role is about more than being responsible for marketing technology strategy and operations.

More than anything, a chief marketing technologist should be the champion of making marketing an environment in which other technical professionals can thrive and contribute to their full potential.

I know, now you're looking for the triple threat: someone with technical skills, marketing skills, and good management skills. Rare, but not impossible to find. I talked with two great candidates who fit that profile just last week (email me if you'd like an introduction). And one strong person in this role, with the mandate from the CMO, can go a long way towards building the capability to be successful with a larger cohort of technical marketing hires.

Only then will marketing truly be ready to ramp up its technical hiring.

New species of marketers in the marketing kingdom

"As a marketer, you have two choices: adapt and survive, or stand still and die. The ones who do the first the best will emerge at the top of the marketing food chain."

That's the concluding quote from Gord Hotchkiss's latest article on MediaPost: Evolving On The Fly: Growth Hackers, Agile Marketers, Bayesian Strategists And CMTs.

Gord's Search Insider column is my weekly go-to source for big picture thinking in the evolution of marketing. This week he proposed that such evolution is following a pattern known as punctuated equilibrium, which I've illustrated above.

An explanation from his article (emphasis added is my own):

If you believe, as I believe, that evolution happens in spurts, then it's important to understand what causes those spurts. Among many contentious alternatives, one that seems to be more commonly accepted is a sudden dramatic change in what evolutionists call the adaptive landscape. This is the real world that species must adapt to in order to survive. "Flat" landscapes create an even playing field for all species to survive, resulting in relative stasis. "Rugged" landscapes significantly favor some species over others, accelerating evolution dramatically. "Rugged" landscapes generally emerge after some big event, like a catastrophe.

I propose that marketing is currently a very rugged adaptive landscape. Some marketers are going to thrive, and others are going to disappear from the face of the earth. We're already seeing exciting new species emerge.

Gord then goes on to list several examples of "new species" of marketers:

• Growth hackers
• Agile marketers
• Bayesian strategists
• Chief Marketing Technologist — thanks for the mention, Gord!

The metaphor really resonates with me. Although marketing, like all business, is constantly evolving, the reality is that from the 1960's through the late 1990's, marketing was in a period of relative stability. Most changes were small and incremental. But with the confluence of all things digital — global connectivity, ubiquitous computing, an explosion in software, the cloud, social media paradigms, etc. — marketing has been disrupted by the quintessential big event.

The geological scale of this event has thrown marketing into a rapidly changing environment.

Earlier this week, IDC gave a presentation on predictions for CMOs in 2013 where one of the analysts, Rich Vancil, said, "Without exaggeration, I've seen more change in the CMO suite in the last year than perhaps the last 30 years combined." He expects that there will be more "rapid change" in the year ahead, particularly in the organizational dynamics surrounding the roles of marketing officers and departments.

Quoting the write-up on that presentation in Information Management:

Tying all of these CMO organizational challenges with data in 2012 and looking ahead exposes the marketing department to a coming wave of "dynamic" budgeting and personnel decisions: a.k.a. job replacements and cuts, and shifts in finances. Even with data-based plans in place, Vancil says 2013 could play out with express changes in the faces and functions of enterprise marketing.

Or in other words, new species of marketers in a rapidly changing environment.

Are you adapting?

The drama that swirls around data in marketing

Great article in The New York Times this past weekend, Can Social Media Sell Soap?, sheds some light on the war in marketing between the "humanists" of Don Draper's world and the "quants" of the digital marketing revolution.

The essence of the story: data-driven marketing is incredibly promising, but it is not all-powerful. Those who polarize themselves into one camp or the other, rather than seeking the best of both worlds, find themselves on precarious footing.

Here is an excerpt that I found particularly compelling (emphasis added is my own):

While the rise of search battered the humanists, it also laid a trap that the quants are falling into now. It led to the belief that with enough data, all of advertising could turn into quantifiable science.

This came with a punishing downside. It banished faith from the advertising equation. For generations, Mad Men had thrived on widespread trust that their jingles and slogans altered consumers’ behavior. Thankfully for them, there was little data to prove them wrong.

But in an industry run remorselessly by numbers, the expectations have flipped. Advertising companies now face pressure to deliver statistical evidence of their success. When they come up short, offering anecdotes in place of numbers, the markets punish them. Faith has given way to doubt.

This leads to exasperation, because in a server farm packed with social data, it’s hard to know what to count. What’s the value of a Facebook “like” or a Twitter follower? What do you measure to find out?

In this way, marketing resembles other hot spots of data research, including brain science and genomics. In each one, scientists are combing through petabytes of data, trying to discern whether certain genes or groups of neurons cause something or simply correlate with it. It’s not clear, because these are immensely complex systems with millions of variables — much like our social networks.

Even as researchers swim in data that previous generations would have swooned over, they struggle to answer crucial questions regarding cause and effect. What action can I take to get the response I want?

Read the full article.

Marketing services and technology M&A increased 67% in 2012

The Jordan, Edmiston Group, Inc. (JEGI) investment bank released their report of 2012 M&A deals in media, information, marketing, and technology sectors last week. Overall, the number of deals and the total value of deals were way up — a 50% increase in the number of deals and a 43% increase in total value over 2011.

A few highlights worth calling attention to:

The sector with the largest number of deals and the highest total value — by a large margin — was Marketing Services & Technology. There were 485 deals in that category with a total value of $20.5 billion, up 67% and 36%, respectively, over 2011. This sector accounted for 9 of the 30 largest deals of the year.

Two deals in that sector that I believe are particularly important bellwethers for the marketing technology space were Oracle's acquisition of Eloqua for $871 million and ExactTarget's acquisition of Pardot for approximately $95 million. Consolidation in the marketing automation category is heating up — but I remain convinced that this will ultimately feed more overall diversification around a more standardized set of core platform providers.

Interestingly, 90% of the transactions covered by this report were smaller deals, less than $50 million in value. This is consistent with an environment where the costs of creating and deploying high-quality web-based software have dropped dramatically over the past 7 years. For many ventures, it's not necessarily a "go billion, or go home" environment. It is now easier than ever for entrepreneurs with a great idea to launch and grow with a minimal amount of capital. I believe this is one of the key forces that will continue to drive the ongoing diversification of marketing technology in the years ahead.

Global agency holding companies (Dentsu, WPP, Publicis) and large technology companies (Microsoft, Oracle, Salesforce.com) were naturally the most active buyers, but so were many companies from the marketing services world: Gannett, Rakuten, Sapient, INFOR, Advisory Board, and UBM. More strategic players are looking to have a role in this new age of the ever-more-powerful, technology-driven marketing department.

Looking forward to seeing some incredible growth in 2013!

A striking example of the power and peril of data

Here's a parting story from 2012 that I think sets the stage for a major theme of 2013: data has power.

Last week a newspaper in New York published an interactive map of gun permit owners in Westchester and Rockland counties. It made it effortless for anyone to see who has a gun permit in their neighborhood, with names and addresses.

While this is not the first time such information has been put online, this particular incarnation was a perfect storm with an easy interface (thank you, Google Maps), distribution with an emotional accompanying story, and a viral wildfire in social media at the exact moment when advocates on both sides of the gun control debate are on high alert.

Controversy promptly ensued, from CNN to TechCrunch. An angry blogger in turn posted the names and home addresses — and in some cases phone numbers, Facebook pages, and other personal details — of every staff member on the paper he could find.

For the purposes of this post, let's set aside the rabid brawl over gun control. This is a blog about marketing and technology, not politics or public policy. The facet of this story that I want to call attention to is the incredible impact that this data had when presented with a highly usable visualization in a highly relevant context.

See, the data about gun permit owners was already — technically — public information. But aggregating that information and putting it into a compelling visualization — and associating that with crimes committed with guns — made a powerful story. It also enraged many people who considered it a "violation of their privacy."

Yet how could it have been a violation of privacy if the information was already a matter of public record?

The reality was that the barriers to acquiring that information before — filing Freedom of Information Act (FOIA) requests with different local bureaucracies — were high enough to dissuade, well, pretty much everyone. Getting that data, processing it, and then turning it into something useful was either too much work or something that no one had really imagined doing before. So while technically it was public information, for all practical purposes, it might as well have been private. (Those of you with reams of data buried in silos throughout your organization can surely relate.)

Taking that "public" data hidden in the bowels of government and making it readily viewed by anyone with an Internet connection therefore felt like a huge change to the status quo.

In the same vein, I'm not sure how many of the names and addresses of the newspaper's staff were in the public domain already, but I suspect that most of that information was already out there — as that's how that angry blogger found it. But by putting that information in the context of this story, he clearly was encouraging people to inundate them with, um, opinionated feedback. En masse.

I'm not morally equating these two moves. My point is that the collection, organization, and sharing of previously obscure data on both sides had a powerful effect.

Circling back to the realm of marketing technology, I think there are two important takeaways for marketers:

First, the difference between data and applied data is huge. Marketers collect a ton of data these days, and they have access to even more through a myriad social networks, audience data exchanges, the public domain, etc. The challenge is now how to effectively apply that data to making a positive impact on customers and business management. This isn't just about "big data" either. Note that the datasets used in this story — the gun permits and the newspaper's staff — were both small. But the right data, in the right context, presented in the right application can be incredibly persuasive.

Second, the more data is applied, the more people will care about privacy. Most people haven't paid any attention to privacy policies and terms of service. But that is likely to change as data is increasingly turned into applied data. Even if your use of data is modest and respectful, more and more stories of data abuse will certainly raise concerns. More people will care about exactly what data you collect from them and why. While you can deliver some amazing new features to customers using data well, keep in mind that one person's feature might be another person's fear. (Take the Instagram brouhaha from a couple of weeks ago as another example.)

As the superhero motto goes, with great power comes great responsibility.

5 thoughts on Oracle's acquisition of Eloqua for $871 million

Wow, this certainly tops off a spectacular year in the marketing technology space: yesterday, Eloqua announced that it was being acquired by Oracle for $871 million. Reflecting on this last night, five thoughts came to mind:

Thought #1: Congratulations

First, big congratulations to Joe Payne, Steven Woods, and the rest of the Eloqua team! I've been a big fan of Steven's thinking around digital body language for many years. They've done an amazing job of executing on that vision.

Thought #2: Customer Experience

Second, the language around this announcement is very telling because it emphasizes customer experience so heavily. The headline for the press release expressly frames this acquisition as a part of a comprehensive mission "to help companies deliver exceptional customer experiences."

The graphic at the top of this post was included in the presentation deck released along with the announcement, and it positions Eloqua as the "marketing" component of The Oracle Customer Experience Cloud. Most of the rest of the deck focuses on this unified customer experience mission, as the following slide declares that "great customer experience is the sum of all interactions."

The rise of customer experience as the overarching umbrella for modern marketing has been one of the great themes of 2012, and this deal will certainly place that thesis at the center of many CMO-level discussions in 2013. "Every customer experience is a brand moment of truth." This is why everything is now marketing.

Thought #3: Post-Digital Marketing

According to Oracle EVP Thomas Kurian, Eloqua "will become the centerpiece of the Oracle Marketing Cloud." What's particularly striking about that statement to me is that Oracle is one of the giants of the traditional, pre-digital marketing world. Eloqua, in contrast, is one of the stars of the native digital marketing world. This merger — if executed in the way in which it's presented — will be a true mash-up of those two worlds at the enterprise level.

Customer experience may be the rallying flag for this, but there's something noteworthy purely about Oracle championing the vanishing boundaries between traditional and digital channels and methods. The Oracle-Eloqua deal is not the first move in that direction — IBM has clearly been pursuing this as well — but it is a major step forward in that transition.

This is what David Cooperstein of Forrester recently called post-digital marketing.

"Like the shift from modern to post-modernist art and architecture," David wrote, "where we encountered architects like Michael Graves and Richard Meier who blended modern purity with classical touches, we are entering a world where digital innovation is merging with traditional marketing fundamentals to create new approaches, new brand leaders, and new models for success."

Thought #4: Race to the Top

This is generally good news for Eloqua's larger competitors, especially Marketo and Hubspot, as they advance towards their own IPOs, as this acquisition further validates the scale of this market — and heats up some very attractive valuation ratios.

For the biggest strategic buyers though, this speeds up the tempo of the music. IBM and Oracle have now staked their claims with the Unica and Eloqua acquisitions respectively. Adobe and Salesforce.com — the two other largest contenders in the enterprise digital marketing space — are both missing this "marketing automation" backbone piece in their portfolios.

Now that Eloqua is off the table, I imagine they're taking a closer look at Marketo, Hubspot, Act-ON, Neolane, Infusionsoft, etc., as well as the publicly-traded ExactTarget (which now owns Pardot). Aprimo, which is owned by Teradata, is probably out of reach given the parent company's market cap. But maybe not for the likes of SAP or Microsoft? Good times in the corporate development office, I'm sure.

Remember those rumors of Microsoft acquiring Adobe a while back?

Thought #5: More Investment & Innovation Ahead

Given the major marketing software acquisitions that have happened this year, there's no doubt that we're in a wave of consolidation in this space.

But unlike other consolidation phases of other industries, I don't think this is the end game of the marketing technology landscape. On the contrary, I believe these deals will create a chimney effect that causes the start-up fires of new marketing technology ventures to burn even brighter.

We're experiencing simultaneous waves of consolidation and diversification in marketing technology. And I predict more investment in this space in 2013 than any year before.

Why? Because this new era of marketing — the post-digital marketing era of customer experience — is just at the beginning of a 10 to 20-year revolution. The world in which this new approach is emerging is still tremendously in flux, with new innovations appearing at an accelerating rate. There's no lack of opportunity for new ventures in this remaking of the world.

That being said, I do think this deal moves us closer to a market structure that has a consolidated marketing backbone supporting a diversified marketing body. This is the third possibility I discussed in my post on 3 different futures for marketing technology: a few consolidated platforms with highly diversified ecosystems of specialized apps.

According to the FAQs released by Eloqua and Oracle, "Eloqua will continue to be an open platform for marketing automation and integrate with third-party systems including sales force automation solutions and social platforms." It remains to see how open Oracle really is with their customer experience cloud. But given the open platform strategies that Salesforce.com, Marketo, Hubspot, and others are pursuing, they have incentive to accelerate towards a dominant position as an ecosystem player — or risk that being a weak spot in which competitors will surely attack.

It's going to be an exciting 2013.