Commentary
Who Will Own The 'Marketing Cloud' Of The Future?
- by Dave Morgan , Featured Contributor, September 21, 2017
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.
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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?
Paula, I agree that we'd all like to be marketed at less and positively informed more. I am hopeful that as marketing becomes more precise and transparent that we will see its postive societal benefits get better and better. While much marketing and advertising that we get today can be annoying, I am heartened that it largely pays for our free press and the crucial Fourth Estate counter balance to governement in the US. Without ads, the US might be like so many countries around the world where the press have been largely controlled by governments in power and the business and policcal interests of a few.
Ads certainly have their importance and may they continue forever. However, my personal business is not theirs. When I want more info, the sellers should provide it to gain and keep their customers. As advertising becomes more complicated and expensive, it has shoved the small local businesses out of directly reaching their customers. $100-200/month gave them a couple of ads in the local papers with enough reach to be seen and get a response. As larger companies become conglomerates and those conglomerates which influence government to push their voice (deforestation, polluters e.g.) onto customer decisions. There are no reliable safeguards and limitations. See fbeast (the worst is yet to come).
Dave, at the risk of being a bit too futuristic, do you think there will be "personal clouds" interacting with the other major "clouds" in the not too distant future? Consumers already use cloud services (e.g., from Google and Microsoft) but consumers also have to manage a batch of digital comm on a channel by channel basis...set email preferences with one provider, search and social with others, etc. Having your own cloud, that works with AI assisted instruction sets, could centralize digital activities and interact with other "cloud" services--the ultimate digital assistant.
If your personal cloud says "no more emails or ads from brand X" or "always order pizza on Thursday nights @ 6pm...the personal cloud simply takes care of that for you, across all your digital channels.
Privacy issues aside, for the moment, it seems logical and beneficial for both marketers and consumers. A next generation concept perhaps but at least an interesting one.
It's an important ponit you make James. I do think that there is a good chance that we will see some sort of personal data mediating technology or service that lets people control data about them to a degree and become participants in the marketing decisioning systems. It has been tried many times without success, so far, but I di believe that we will see it eventually.