Who will own the future of the trillion dollars or so spent on marketing every year? Many people believe this arena will be dominated by whoever controls the most and best consumer data, combined with the most and best opportunities to connect that data with massively scaled touchpoints
These companies will have lots of consumer data and lots of chances to capture value from that data in the targeting, measurement and optimization of all forms of commercial communication, from email, digital banners, digital video and TV ads to e-commerce personalization, snail mail and telemarketing.
Providers of these capabilities of late have taken on the moniker of “marketing cloud”: a not inappropriate label, given the importance of cloud storage and computing in making this all happen at massive scale. These companies' platforms will enable marketers to find and convert high-value prospects into customers predictably, provably and cost-effectively at significant scale.
What kinds of companies will win the marketing cloud race? Here are some of my thoughts:
Great data, software and application tools won’t be enough. The one company with the smartest and best-performing marketing cloud platform won't necessarily win. Nor will the platform with the most and best data. No, the winner will be the company that can control, extract and keep the most margin from each and every marketing communication.
Watch what happened in search. The marketing cloud competition will play out like the search advertising market did. Search advertising as we know it today wasn’t invented by Google, nor was Google’s search advertising platform the best when there was still competition in the search ad market. Goto.com (Overture) pioneered the model and had a bigger and better marketplace than Google did for years.
However, Google owned searches and Overture had to rent them, so Google could take more margin from each search ad, offering better pricing. Ultimately, it won the entire market. Then it built lots of great tech and aggregated tons and tons of great data, both of which have enabled Google to continue to hold and grow market share.
Owning media and marketing touchpoints will matter. Applied to the marketing cloud world, this means that the winners are likely to be companies that not only have smart clouds, great technology and massive data, but that also control or own direct consumer relationships and communication touchpoints: media. Like Google did in the early ‘00s, they will be able to make impressive margins and profits on their own inventory, better competing with those that don’t.
Companies like Oracle, Neustar, Adobe and Salesforce are leaders today in the still-nascent marketing cloud marketplace. However, as the market develops and even bigger money starts moving in, I expect these companies to come under severe pressure from telecos that own content -- AT&T/Time Warner, Comcast & Verizon/Oath -- and FAANG (Facebook, Amazon, Apple, Netflix and Google), the large, data-driven and fast-growing digital marketing platforms. All those companies can generate 10X the margin from each and every data-enabled transaction as a stand-alone marketing cloud, since they own media and touchpoints to directly deliver optimized marketing messages.
What do you think? Who will own the marketing cloud of the future?