Standout term from today’s show:

CDAP: We’ve build CDPs to create a unified data set about each customer, but do we have the ability to activate this data cross our disparate marketing automation systems? Remember, we discussed on this episode how integration between martech stack components is still the single largest challenge marketers today face. No matter how much great data you have, putting it to use across channels in the well-orchestrated campaign is still the winning trick. With vendors such as CDP BlueShift talking about Customer Data Activation Platforms, and many others starting to talk about the importance of activating the data in an orchestrated manner across multiple channels, this is a conversation we are just getting snuck into.

2 more terms you will hear on today’s show:

  • Stream Analytics: Streaming analytics work by allowing organizations to set up real-time analytics computations on data streaming from applications, social media, sensors, devices, websites and more. (Techopedia)
  • Kaggle Community: Kaggle is an online community of data scientists and machine learners, owned by Google LLC.

1. Report of the week: LUMA Digital Brief 024 — Market Report Q2 2019

We talk about the rise and rise of the customer data management space as well as how the need for improved data activation and platform integration is going to impact the space; the need for a D2C expert on the Talking Stack and other little nuggets from the report.

2. Facebook and the DLRM

What does DLRM- deep learning recommendation model - mean to the average marketer? How can we use it in our day to day?

3. GDPR shows some teeth with the fines on BA and Mariott

Follow us on SoundCloudSpotify or leave us a review on iTunes. Have a great week. Thank you.!

Chitra [00:00:13] Welcome back, everyone. We are officially halfway into this calendar year, and today we're going to talk about the latest on LUMA digital brief Market Report Q2 2019. So basically this gives us a handy recap of what's been happening in Adtech, Martech, digital and D2C. Lots of interesting tidbits for you to be discussing at the watercooler or through this week. But let me just say it's been a busy quarter with acquisitions funding and launches. So we're going to talk about all that in a second. And then also later in the show, we're going to talk about Facebook's announcement on the Deep Learning recommendation model may mean to us as marketers. So deep diving into this report I saw  David  Raab and Anand Thaker  that not only was Martech a frontrunner in the activity across the Adtech, Martech, digital and D2C space but specifically customer data management was the poster child of all of this activity. Let me recap for you from this quarter from the report. Google acquired looker of 2 billion. Salesforce Acquired tableau for 15 billion. Publicis took Epsilon and the identity resolution space. We also had Linkedin buying drawbridge to join its marketing solutions suite — Liveramp buying data plus math and then Dun & Bradstreet which bought Lattice Engines. So David, what do you make of all of that activity. ?

David [00:01:44] Well, it was a busy quarter that's for sure. And interestingly of the four sectors that covered Adtech, Martech, digital content, D2C. Martech was by far the largest which has not always been but almost half the deals. I think those 42 deals for Martech, and like 46 I believe it was for everything else. So so just shy of half and probably more than half the dollar volume. So you know the market is good.

Anand [00:02:14] I think one of the trends we see here too is just having the data doesn't mean anything. We saw Dun and Bradstreet buying lattice or Google with looker. I follow looker pretty closely for a long time alongside with one of the V.C. firms that invested with them and you know one of the beautiful things about why Google picked them up was Hey we got this data cloud, but We need to have those insights democratized within our organization, and certainly looker is one of the companies that sort of to promote a lot of that. And we see that in a lot of these other acquisitions as well how do we do something with the data not just house it or store it or manage it. Now, what do we do with it? Because that's going to be an incredible thing. And what I mean by doing that we're talking about orchestration we're talking about activation.

Chitra [00:03:09] it's interesting you bring that up because you know there is another piece of data in that report in the funding space about Klaviyo which is marketing automation and e-mail marketing platform. They pulled in a lot of funding. I think  150 million is what they pulled in. And I think their proposition is that they pull their smart marketing automation or e-mail marketing company because they are able to pull in all of this data .  all of these lovely data like things like CDP or any other data management platform can create for you and apply that in real-time to the marketing automation. Another CDP featured in that list of funding as well in that same list is blue shift which is also talking quite actively about activating the CDP data into your existing Martech stack. And I think they even call it a customer data activation platform a CDAP. So there's a lot of this conversation around activating the data and Anand, and I think that's a very relevant point that you brought up. Maybe we can spend a little bit more time talking about this piece, David You know you've always been very specific that the core function of a CDP is really the data engine pulling that data together and creating that unified view and now that that conversation seems to be maturing. People are now turning the attention to OK fine. I have all that data in one place now what? How can I use it or the components of the Martech stack itself are So sort of disconnected that I can't do cross-channel activation smoothly.

David [00:04:46] We've seen almost a split within the industry between the companies that focus on the core of CDP function of the building and sharing a database which is migrating from a marketing function to an enterprise-level function because everybody in the company realizes they need that data. And then there's another set of companies who would be more like a blue shift who are focusing on marketing. So it says we're good we're just going to service markers, but we're going to give the marketers a much broader set of functions that they want. So we're going to have the activation piece of it built into the system, and they're not mutually exclusive, and you're not a CDP unless you build that database. Blue Shift builds the CDP style database. But it's a different focus on a different class of user being that users need. Because part of the problem that we see people having with the CDP is was actually what you just said, they finally have this beautiful database assembled that's what the CDP lets them do. And then it turns out that their e-mail system or their web system or their mobile apps can't use that data effectively or they can use it. But there's a fair amount of integration work involved even though it's supposed to be plug and play, and it may even be plug and play, but it's still not as simple as having a one on one system to clearly start to get things like real-time where you have to have a very intimate connection to get the speed that you want. So there's a certainly a strong case to be made for having that stuff all in one system. So we see that we even see in the CDP space the next step beyond that which is to have CDP to do the deliveries that send the e-mail or include the web CMS or so on. And that's something that we always kind of drew the line as well. If you do that you're not a CDP, but we're beginning to see quite a few companies who do that and have a perfectly valid functionality of a CDP built-in. So it seems a little silly not to call them the CDP, but they're CDP among many other things.

Anand [00:06:52] So there's sort of this circle of life that's happening with how companies are acquiring each other. We see companies who deal with process orchestration start to acquire companies that have data of some sort: data and intelligence. So then there are data companies who need more intelligence out of their data. So they're in deeper analysis. And then once you have those actionable insights. Whether it comes from an A.I. or augmented human decision making, and then you'll have companies who are saying oh we've got actionable insights. Now we need to go after something that executes on this. We see process data actions.

Chitra [00:07:28] New problem for a marketer then would be the order in which they need to assemble all of this stack because you are probably already invested in some kind of marketing stack. You probably have at least marketing automation and CRM. If those components are not able to reuse what you will invest in the CDP to help you do that real-time like David mentioned real-time cross-channel delivery or activation of data and delivery.

David [00:07:59] In terms of the technology I think Chitra said correctly that people are not starting with a blank slate here. Everybody has a CRM, and everybody has marketing automation so you do want to worry very intensely about compatibility with your existing stack or you want to look at your existing stack say these are things I'm going to keep let make sure anything else I do is compatible with those and here's something else. You know what I don't mind getting rid of it, so in the future, I expect to get rid of it so I'm not too worried about compatibility with it. Now you know the CDPs are designed to work with anything designed to be neutral most of them have good connectors to the standard products but of course if you're a Salesforce shop and you know Salesforce has a CDP you're going to look at that very closely, and you'll hope and you will indeed no doubt find that it integrates quite nicely with Salesforce. Same for Adobe same for Oracle. The problem of course is most people work with multiple of those vendors different components for different things and making sure that the salesforce system cooperates nicely with the Adobe system and vice versa is something you want to at least look at a little more closely you may find it that works great you're more likely to find that at least the early iterations of those systems are designed first and foremost integrate internally with the other components of their company's stack and they'll eventually get around to building the connectors because they're recognized that they need to do that. But just as they prioritize their first release will focus on the internal integration.

Chitra [00:09:33] Any other surprises from your reading of the report?

Anand [00:09:38] I was actually surprised they did not cover the privacy angle a lot of this even though it may have been folded into the thing and I know that's not what we think you're asking about Chitra Iyer but considering how much privacy will be very costly both in terms of not just monetary fines which we could probably talk about later but in terms of just the trust and the assurances and the confidence that brands need to make the connection the digital connections they need to make with their consumers.

David [00:10:09] If you think about it kind of amazing the direct to consumer is its entire category here and that there are fairly huge amounts of money involved there are six hundred million dollars for Door Dash raises. You know I didn't use to be a thing. I mean five years ago who even thought about DTC or if they thought about it was like This Old Fashion Director consumer. Oh, you mean magazine subscriptions right. And now it's like a huge industry it's almost at the peak of its a little the hype cycle there's been some pushback against it. But the fact that it's become such a huge thing so quickly I think is something we could just sit back and kinda contemplate at least for a moment. Just take a deep breath and meditate on that.

Chitra [00:10:56] We're gonna see a lot more of DTCs being acquired as we go along as well. So my two takeaways from that one are David I think you should start shipping out your Faraday Cage handbags soon and build your own DTC  business. But also I think it's a sign that we need to get a DTC expert on our show to talk about the technology that enables DTC at scale and the quick scale of what happened from zero to hundred that we see with a lot of DTC companies. So if our audiences have any suggestions for guests who can come talk to us about D2C or want to volunteer themselves, we would love to hear from you on LinkedIn or Twitter on that one. 

Chitra [00:11:39] So it does look like we will continue to see big enterprises making more acquisitions of D2C brands with good reason. And I think the message here for us is to find an invite a D2C expert on the Talking Stack here because I think marketers will find a lot to learn from their quick, agile growth model and also the way that they are able to leverage technology not just to scale up super fast but also ability very real and authentic connections with customers that are leading to all of this trust and ultimately convergence right. How do you explain the fact that consumers are ready to let go of a brand they've known and used for 20 25 years and switch completely over to an unknown brand and still be able to trust them and recommend them. So audiences if you know a DTC  expert, or you want to volunteer yourself as an expert these let anyone of us know on LinkedIn or Twitter, and we'd be happy to move it forward because it's time to have someone who understands direct to consumer model and bring it to our audiences on the Talking Stack. But right now Anand in terms of News of the week we've had Facebook say that they're going to make their  DLRM or deep learning recommendation model public. So we've had recent similar announcements from Google and Amazon to make certain algorithms, especially in the A.I. space public so that the larger community can not only access it to do their own thing but also make the overall technology better and stronger. So what is this particular announcement from Facebook mean to marketers, and I ask that only because every marketer is invested to some extent in Facebook marketing, right? So what could this possibly mean to us?

Anand [00:13:21] Facebooks . Biggest value has been the relationships of data and information they have about everybody. I don't think there's a company in the world that maybe there's a couple of companies in the world that can match knowing you and your interests and your hidden secrets as much as Facebook is and that's part of the reason why a lot of people have a spotlight on them now. The other part of that is we talked about earlier in the episode. OK great.You get all the data. What do you do with it? And this is part of what they need to do what they're trying to do is try to make it more intelligent in terms of how you can hyper personalize to individuals and this is part of what this algorithm is doing and they're using  the Kaggle community to help them work on trying to improve that artificial intelligence at the same time as they've made this very much open source because there are always ideas of being able to use this in some capacity or another. So to go deeper a little bit what why, I think the best takeaway about this is that there are usually two parts to the data that a lot of people operate on with regards to A.I. One it's usually this categorized data the information about how we tag individuals as an example. Perhaps we've you know maybe they've self-identified some things but then there's sort of the reals in this DLRM They talk about it as sparse data and unfortunately with A.I. you unless you have like enough density of information your A.I. and your machine learnings can only get you so far in terms of how you're able to be accurate in understanding your  customer. The other part of that is the real-time aspect which I think its previous episode we talked about Stream Analytics write the Google had come out with something along those lines speaking about you know the real-time nature of information that's coming out marketers soon and the update of that information and the access of that information and this is the other aspect which is this density of data or there's real-time. So you're putting the sort of this forest and the weeds you're looking at the forest and the weeds as you're trying to figure out your strategy of how you want to reach out to the say the Facebook community or the consumers at large.

Chitra [00:15:31] So the way I see it is a handy reminder from Facebook that they have the  DLRM  and that marketers should in fact probably be thinking about investing even larger amounts of money investing on Facebook if they want a piece of that action and speaking of large amounts of money and reminders we've seen both British Airways and Marriott being fined these past few weeks by the GDPR. Authorities in Europe; in the UK 230 million for British Airways and about 123 million for Marriott both which were for data breaches and not for consent related challenges but still what is a not so gentle reminder there for Marketers do you think?

David [00:16:14] Well, that was a fascinating piece of news because that's always been the question about GDPR. How will it be enforced and all of a sudden you have these two gigantic fines, and that one was like You know one and a half percent of global revenue the other was 3 percent of global revenue. The two companies involved, so they're you know the kind of creeping towards the 4 percent limit that the law states which is a very very substantial amount of money. Prior to these two fines, the largest fine had have been a 50 million dollar one. So now you have one that's over 200 million and one that that's close to 200 million as I recall. You know we've been waiting for this shoe to drop about enforcement everybody kind said well the agency the enforcement authorities will give them a year and that year is up, and you know sure enough now they're beginning to say hey no no this is law we're serious. You've got to start paying attention to this. So I would not at all be surprised to see some consent related fines cropping up fairly soon. And that's what it's going to take to get the attention of businesses. There's simply not going to pay any attention unless they see how it's going to be enforced. So it's showing some teeth.

Chitra [00:17:25] Anand Facebook also released updates to its why am I seeing this ad piece of transparency information now. How many people do you think I am going to use that considering it's already been out there in a less advanced or detailed vision for the last four weeks. The fact I wonder how many people have used it since it's been Life I must find out. 

Anand [00:17:46] How many people would use it or not. I don't think is as important as the fact that it's there and it's available, and people can look at it and if they so desire you know a lot of people you know even with the GDPR related matters how many people are requesting their data. It's just more of the fact that there's infrastructure to be able to do that and bringing cognizance to the consumers that you can access your information and understand you know how it's being used.

Chitra [00:18:16] That's right. At least it's out there. And there will always be hope. Thankfully those vigilantes will watch over the rest of us and make sure it's not being misused right. Great. With that it's a wrap for this week folks don't forget about those D2C experts and of course, please like us or follow us on Soundcloud and iTunes if you have a minute. Thanks for listening and thanks, David and Anand. Have a great week.


The Podcast Team

David Raab

Founder, CDP Institute and Principal, Raab AssociatesWidely recognized independent expert in customer data platforms, marketing technology and analytics; David specializes in marketing trends, technology strategy, and vendor

Anand Thaker

Martech Industry and Growth AdvisorA recognized MarTech, decisioning and AI/ML expert; Anand advises growth and go-to-market leaders and investors for global brands and funds while also being active in the startup ecosystem.

Chitra Iyer

Editor-in-Chief of Martech Advisor Editor-in-Chief of Martech Advisor and marketing veteran is the host of the show.