Why Marketo’s CEO is predicting the martech bubble will burst
- 17 May, 2017 07:01
There’s a pin coming to pop the martech and adtech bubble, according to Marketo CEO, Steve Lucas. And it’s going to be platforms focused on engagement and integrated revenue generation, over adhoc experience apps and execution engines, that will feel it least.
In an in-depth, one-on-one interview at the recent Marketo Marketing Nation Summit in San Francisco, Lucas told CMO he expected to see martech, adtech and salestech converge into a category of ‘revtech’, focused on how brands generate revenue end-to-end, from advertising through to marketing, sales and customer service.
“I don’t think this hyper-accelerated situation we’re in where someone invests a new app for the marketer every five minutes is going to slow down. But I do think there is a bubble in terms of the technology that’s out there,” he said. “There are something like 190 social listening enterprise tools available right now. How many do you really need? Those companies are going to run out of gas, investors will get impatient, marketers will get frustrated.
“Across every category in martech, you’re going to see if anything, a bubble burst.”
What Lucas is counting on is marketers increasingly turning to open platforms that focus on wider engagement, such as Marketo’s, to meet their needs. He was quick to point out many of the vendor’s competitors still haven’t integrated core capabilities acquired in the quest to build out a Marketing Cloud proposition.
“Take Oracle: There’s Responsys here, Eloqua there, and they haven’t made the effort to integrate them” Lucas claimed. “If you look at Salesforce, you have Pardot and ExactTarget and they’re separate. We have a lot of customers coming to us saying these are two totally different systems, whereas you guys have it integrated and consolidated, so we’d rather use you.
“What we’re saying is there is a big difference between an open, engaged platform, and a captivity cloud. We’re not going to try and sell you the CRM you might not be interested in, or the database you don’t want.”
One thing that’s clear right now is that the martech landscape is confusing the marketer, Lucas added. “Our simple message is we have the platform, a suite of applications you can use, then we have 650 partners that are deeply integrated and will just get more so.
“I have seen this movie over and over, and I know how it ends. That’s why I joined Marketo – I know the good end to the movie is that the open platform wins.”
Redefining marketing’s role
Lucas’ views on the state of technology landscape tie into a wider-held belief that marketing must become the owner not just of customer experience, but engagement. The Marketo CEO said it’s time for a redefinition of the role of marketing, noting that for hundreds of years and all the way up to the advent of digital marketing, marketers have been asked to do the same thing, just more of it and with more scale.
“The marketer needs to be the second CEO – the chief engagement officer,” Lucas claimed. “If the CEO comes in with the mindset of that person being in charge of engagement across customer, prospect, employee, partner, and product, with marketing and sales organisations having accountability to you for the topic of engagement and how we engage and the experience driven underneath it, then I think it’s a profoundly better role and position for a CMO.”
But to harness engagement as a strategy, traditional methods of marketing need to be rejigged, Lucas said. As an example, he pointed to the all-too-common retail experience of pushing offers, loyalty cards and sign-ups on consumers in-store.
“I still can’t believe that I’ll walk up and put clothes on a counter in a store, and someone asks if I want a credit card, that I don’t need, for 10 per cent off my purchase that day,” he said. “That represents the laziest form of marketing physically possible.”
Lucas’ also saw disparity in how marketers are embracing the notion of science and uniting this with the art of marketing.
“You’re seeing marketers that are embracing the notion of science, then there are marketers that believe they can overcome that with traditional means. There are marketers stuck in the world of art, who are oriented around brand, what you feel and what you see, but then you have the people who have woken up and seen it’s about value and values, not about volume,” he said.
“Then there are people in the middle bombarding the world with emails, tweets, and getting a 1 per cent hit rate. It’s just not precision guided, it’s lazy. There is more to marketing in this engagement economy and digital world we live in. It’s about making touchpoints more scarce, not more voluminous.”
Marketers need to pick the right moments to engage based on value and relevance, Lucas said.
“A brand like Amazon.com doesn’t have the most beautiful site in the world, but they’re market cap is two times that of Walmart. So you could argue Amazon, which has clearly embraced the science of marketing, is way less concerned with the art,” he continued. “My point is that relevance matters and it trumps art.”
Marketers also need to consider the longer-term game plan, Lucas said. “Ten years from now, we will have that single global social network – we don’t know if it’s Facebook, Amazon or cluster of all those systems – and as a marketer, I’ll be able to peer into the preferences of every connected human being on the planet. It will happen,” he said.
“For marketers, the reality is the art can be the most beautiful thing in the world, but if no one hears you or sees you, it doesn’t matter. That’s where the science ultimately trumps art, but I’m careful not to dismiss art, because it will always be an important element of marketing.”
The key to engagement
Lucas identified three core rules to engagement marketing: Listen, learn and inspire. Where marketers most commonly falling down is the listening part, he said, noting the recent furore over a Pepsi TV commercial featuring Kendall Jenner that made light of the Black Lives Matter movement.
To tackle this, the remit of marketing needs to extend from customers and prospect engagement, but engagement across employees and partners, Lucas said.
“The systems to drive a better engagement and experience are here, companies are either fundamentally unaware of these things, which I can’t fathom, or they’re just choosing not to put the marketer in charge of engagement. That’s the next step for the marketer,” he said.
Lucas agreed one of the challenges CMOs have faced is that they’re often being given the responsibility for transforming their organisation’s customer engagement approach and mindset, but don’t control all the levers necessary to make institutional change happen.
“It’s narrow minded of the CEO to go to the marketer and go ‘I want you to drive change, so I want you to be accountable, but I’m not going to give you any of the capability to create change’,”
he said. “Then they create roles like the chief digital officer, which to me is just a cop out. Ultimately, the marketer should be in charge of digital and engagement.”
Which is why Marketo is repositioning away from the concept of ‘marketing automation’ to ‘engagement platform’, Lucas said.
“I believe this category of engagement platform doesn’t exist today – we’re pioneering that and it will be a category,” he claimed. “People will gravitate towards an experience or engagement platform. Adobe has jumped on this bandwagon, and is calling it ‘Experience Cloud’. My notion of experience is that it’s kind of an enabler of a broader engagement. For the marketer, we want to be aspirational for them. We want them to own more than just experience.
“The reality is if you go and tell the marketer they own the experience, welcome to the bun fight between product, marketing, sales, customer service and so on. We have to be careful with that term. But a great experience is key to engagement.”