Redpoint was founded with a vision to create a platform that could elegantly solve marketers’ complex data challenges and enable them to persist customer relationships with relevancy. With today’s Series C funding, Redpoint will expand our market footprint in doing exactly that.
We have been developing data-driven technologies to address an “audience of one” in B2C marketing before the phrase was uttered by the talking heads in our space. It’s an exciting time to develop B2C marketing technology. The market is finally ready, and let me explain why.
The marketing function is broadly seen as the last bastion of the enterprise that requires a complete re-architecting with new technology platforms, processes, analytical approaches, and frankly just better ways of doing everything. The proliferation of channels and explosion of data, combined with new workflow, have emerged to disrupt important aspects of marketing at big and small companies alike. CMOs are buying — roughly $23 billion in marketing technology (martech) spend in 2015, growing to $32.4 billion 2018.
To better understand the market, it is useful to categorize the space since it is large, there are many vendors and the cacophony is deafening. According to Bain & Company, while there is some degree of overlap, the martech market can be organized into three categories, each requiring a different “stack” of software: advertising technology, B2B marketing technology, and B2C marketing technology.
Below are some of my thoughts on what each of these categories means to Redpoint:
1. Advertising Technology
- Solutions tend not to be sticky – switching costs are low
- Must contend with the power and leverage of the underlying supply platforms, primarily Google, Facebook and Apple/iOS
Advertising technology (adtech) is being rapidly commoditized. With Google’s recent announcement to significantly expand capabilities in this space, it is going to be difficult for pure play adtech companies to effectively compete. But we think there are a few companies in the market that already do this pretty well. To that end, we recently announced a partnership with LiveRamp, an adtech market leader, and our software now connects us to over 250 digital marketing and data platforms. More key partnerships are forthcoming.
2. B2B Marketing
- These technologies focus on sales force automation and marketing automation for companies with sales people, not marketers
- The bulk of “front office” spend by B2B companies is in sales, not marketing, with a 10:1 ratio between sales and marketing spend typical
B2B marketing automation is almost exclusively focused on managing the sales funnel for sales people selling to businesses. They carry short records and are not architected to contain anywhere near the volume of data required to do effective B2C marketing. Additionally, those tools do not accommodate complexity well because marketing to businesses is all about funnel management. It does not make these tools bad in any way, it’s just that they don’t support the robust requirements of the ongoing, ever changing, data-dependent consumer engagement.
3. B2C Marketing
- The bulk of “front office” spend by B2C companies is the opposite ratio of B2B – 10:1 in favor of marketing over sales
- The challenge is the ability to create a “golden record,” employ real-time decisioning, and optimize orchestration to persist a customer relationship underpinned by relevancy
The B2C martech space is significantly different than B2B. B2C companies have tens or hundreds of millions of customers and prospects in their database. Even mid-market B2C companies have millions of customers and large prospect universes. With the exception of a relatively few outliers, B2B companies have a small fraction of that number.
The key to effective B2C marketing is the ability to create a “golden record” about a person and persist that record over the life of the relationship. In addition, B2C companies use – on average – five channels for communicating with their customers and with the emergence of the Internet of Things (IoT), the number of touch points per person is exploding further complicating the marketer’s life.
There is no dominant B2C martech vendor today. The reason is that for the longest time not much really changed. Software products architected in the mid ‘90s have been the standard bearers. With the addition of social networks and mobile phones in the first decade of the 21st century, marketing got a lot more complicated. But that was just the start.
The need to support real-time decisioning and the emergence of the Internet of Things (IoT) has obsoleted traditional products because they cannot scale and do not offer the flexibility and power to support the next generation of marketing needs. Some of those legacy providers simply have no good answer for the new and evolving world of the B2C marketer. For others, the answer has been to create marketing clouds. But arguably, today’s leading marketing clouds are nothing more than a mashup of disparate products that are expensive to implement, hard to learn, and inflexible to meeting users’ ever changing needs.
Businesses today are exploring ways to exploit big data and capitalize on new opportunities from the IoT. Redpoint’s customer engagement technology harnesses the power of data through our market-leading customer data platform and then optimize engagement through an orchestration layer that has been architected for speed and scale – all underpinned by machine learning to drive real-time decisioning. Our technology has been created for today’s B2C marketers and future proofs them for tomorrow, leaving our growth path wide open. And that is golden opportunity for both Redpoint and our customers.