After citing Q4 gross revenue of $12.4 million and a $50 million annual run rate with media costs that average in the 35-40% range, Bizo’s CEO Russ Glass said Bizo for Marketing Automation, a product launched last fall, will be a significant area of focus for the firm in 2014.
The product “went from a standing start in November to a multimillion-dollar business in just a couple of months,” Glass claimed. “The growth trajectory there … speaks to the need in the marketplace to help tie disparate systems together.”
Twenty-five customers have signed on to use the marketing automation solution. As a company overall, Bizo added 365 new customers last year, ranging from HootSuite to Hyatt Hotels.
AdExchanger caught up with Glass.
AdExchanger: What are the limitations of standard marketing automation?
RUSS GLASS: The buyer is now in complete control of their own journey where they’re doing their own research to figure out what products and services they want to buy and they’re using multiple channels and devices to do that. In the B2B world, specifically, that journey is very complex because it involves … a lot of nurturing of these long sales cycles before a decision gets made.
[Another limitation is that it’s mainly about] email. When you think about people only opening their emails about 20% of the time when they get an email from a vendor, there’s a whole 80% where those messages aren’t getting across to them. Combine that with the fact that email is going to reach a certain small percentage of your audience as a marketer and there’s a huge opportunity to take all of the intelligence of a marketing automation system and bring it out beyond just email and into all these multiple channels and devices.
Bizo worked with Eloqua (now part of Oracle) to pad out paid media in the form of AdFocus. Do you foresee these paid media partner integrations continuing?
I don’t think there’s any doubt about it, even from a market fundamental standpoint. The marketing automation/email market is a $2.5 billion industry. The largest players in marketing automation are only doing a couple hundred million dollars in revenue a year. So, when you compare that to display advertising, social advertising, and getting into mobile advertising, you can get a 10 times advantage in market size as an enterprise like an Oracle or a Salesforce.com by starting to look at these other channels.
It’s where marketers are spending money to reach their audiences. Market size alone, it’s a great incentive, but when you look at what the goals of the market are, increasingly it’s life-cycle marketing. It’s making sure you’re in front of the buyer wherever they happen to need information about your product or service pre-sale and then post-sale, making sure you’re communicating with them effectively. This can only be done today if you’ve got enough scale and reach and intelligence to put the right message in front of those people via display or on mobile or wherever they’re spending their time online. That’s why companies are thinking about this life-cycle buying.
What do you foresee happening to standalone marketing automation platforms?
I think there will absolutely be continued M&A by companies that are looking to create platforms in this space. I think Marketo is ripe for some sort of acquisition event this year. But at the same time, I think all of the core platforms when you think about email or marketing automation whether it be those that have already been acquired or those that are still independent, they’re all built on some pretty archaic technology stacks. What’s interesting about it is when we have these partnership discussions and we spend time integrating with these guys, a lot of roadblocks we come up against have to do with their ability to scale.
What’s the issue there?
One of the big limitations of marketing tech is that it’s not very scalable, whereas ad tech has been built from the ground up to do nothing but scale. And that I think will be a very interesting set of events in coming years to how you build marketing tech at ad tech scale, and ultimately, what new companies are going to come around. I like to think of us as one of them, but what other companies are going to come around with marketing technology that really do use cutting edge scalability in their technology stack?
How do you sell into a user base that historically bought in to sales or CRM? Is the narrative fundamentally different, given your B2B background?
There’s no doubt about it. Both in just the marketing organization of, "How does the marketing organization build itself so it can handle all of this data?" and having a consistent view of the data and then the interplay between sales and marketing. One example is: Marketing automation systems, for all the work they do with sales force automation and CRM, still don’t really talk well to each other. There’s like a 30-minute lag between what a marketing automation system knows and what the CRM system knows. That’s crazy. That is absolutely crazy. What Salesforce.com said with Pardot is, "We’re just going to rebuild this thing to work natively on the Salesforce.com database, until you have a single view of the world with Pardot and Salesforce.com and it will all be on the same stack." That has the potential to be a game-changing improvement. I still don’t think it’s going to scale, but at least you’re closer to real time where you have to be in this always-on space.
How is your media business doing versus your data solutions business?
The Full-Funnel Analytics product, which we launched to the market in the middle of last year, is the most important product in our [media] stack right now. …Then there’s the data that’s being extracted from our platform to power other parts of the ecosystem. Bizo for Marketing Automation would be an example of that. We work with many big publishers when they need business data to target their own media and we power large ad networks, DSPs, trading desks, and are also now fully integrated fully into the Adobe and Google stacks so marketers can sort of hit a switch and [gain insights to data] directly within Omniture [now Adobe Analytics] or Google Analytics. Marketers, now, instead of seeing pure analytics based on what’s happening on a site, can look at, "What are CEOs doing compared to average visitors on the site?" That kind of insight is hugely valuable for a B2B marketer.
What about social and mobile gains?
Personally, because we’re B2B, I would say we’re still not very scaled in the mobile space – probably about 5% of our impressions today are mobile impressions and we certainly see that increasing, but I think B2B lags B2C [in mobile] just because the use cases are not as compelling. I think the B2B mobile use case today is largely email. But for other channels like Facebook or LinkedIn, [we see a lot of success] on the Web or by the browser, especially with Facebook. We are very heavy users of Facebook newsfeed inventory on FBX and right-rail inventory on FBX. We see a cost per conversion on Facebook that is better than any other channel on the Web today for B2B [and we scale that] to reach specific titles and types of people, industries and companies within the Facebook ecosystem.
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