This month CEO Today had the privilege of interviewing Rex Briggs – the founder and CEO of the NYC-based Marketing Evolution, which brings together advanced analytics and cloud-based software to support message exposure at the person-level, across all media, and in-campaign. Their software represents a new generation of analytics using big data and artificial intelligence. Within the last year, Marketing Evolution has been named “a leader” by the independent research firm Forrester in their latest global “Measurement and Optimization Wave” report, won the “Gold Medal” from the Advertising Research Foundation, and has been the subject of a Best Practice report by the CEB Marketing Leadership Council. Their software increases profits by analysing advertising effectiveness of each and every message in near real-time. Here Rex tells us more about Marketing Evolution’s recent accomplishments and sheds some light on the way that the company operates.
As an award-winning marketing ROI researcher who has been helping Fortune 500 marketers improve marketing ROI by applying analytics for more than two decades – how has the sector evolved over the past 20 years?
Marketers talk about getting the right message to the right person at the right time at the right price, but until very recently, it been more talk than reality. Now, with the latest generation of analytic technology, we’ve made a major breakthrough. Today, every single message to nearly every single person can be analysed and optimized by our software.
We affectionately call the software the ROI Brain because it uses Artificial Intelligence (AI) to find patterns. The patterns the ROI Brain is searching for are which messages are influencing which people. The ROI Brain does this analysis at a scale and speed that is breath-taking. Most marketers are blown away when they see the ROI Brain in action. The biggest change in the past twenty years is the one-two punch of Big Data and AI. The implications to business are as far-reaching as the impact of the Internet.
You’ve written a couple bestselling books. Your most recent book was about how software and algorithms are changing marketing. Can you explain how Big Data and AI can be used to improve marketing results and what you are doing to educate business leaders?
When you hear the terms Big Data and AI, is it a little intimidating? I want to demystify the terms Big Data and AI by giving business people a look under the hood to see the specific data and analytics at work. At Marketing Evolution, we connect data from every media exposure, online and offline, to sales data, brand perception data, social data, digital profile data, location data and more. By connecting all this data at the person level, we can see which exposures to advertisements contribute to a sale.
This level of analysis wasn’t possible a few years ago. Most marketers and finance leaders aren’t aware of how this technology has advanced recently, or how it can improve their business. Therefore, we see a huge education need. We run a no cost private executive briefing onsite at Fortune 500 companies. We speak at a lot of conferences and do webinars to demonstrate Big Data and AI. Of course, we hope to meet like-minded marketers and finance leaders that want to become our customers, but the broader goal is education. Businesses spend over half a trillion dollars a year on advertising globally. Marketing and finance people are looking for advances in data analysis to help them improve the productivity of their spending, and reduce waste. We want business people to know what savvy marketers are doing today with Big Data and AI to improve business results.
Your company, Marketing Evolution, has been called a new generation of marketing analytics. How is what you are doing different from what came before?
The old ways of measuring advertising use brand tracking surveys and econometric mix models. These old tools provided a high-level view of how advertising increased sales overall, or improved brand awareness and preference. These tools were innovations in the 1970s, and grew in popularity in the 80s and 90s.
The old analysis was pretty superficial in its recommendations – only giving a marketer a budget recommendation, a high-level guidance of how much to put in TV versus digital, versus price promotion, and a few tactical suggestions such as the best TV dayparts to advertise on. These reports were backward looking. They came along with the caveat that differences in message quality may change the results. The reality is that one message might work five times better for a certain group of people than another message. The concept of the right message to the right people is well-understood, but the old analytic systems did nothing to help a marketer measure which message was working with which people while the campaign was live.
How helpful is it to get a report that comes out weeks after the campaign is over, giving a rear-view mirror view, and warning that the road ahead is likely to be different because you are running different advertisements?
Not helpful at all is what most marketers say.
Enter Big Data, software and algorithms. Advertising ROI analysis used to take months. With automation in our software, results come in while the campaign is still live. In the past, ROI analysis wasn’t very detailed. Now, we can take the ROI analysis all the way down to each and every impression that is delivered to each and every person. The biggest wildcard in advertising performance is the message itself. Now, real-time analysis of which messages are influencing which people lets a marketer adjust the message targeting and media mix in real-time. The software does the work, and eliminates wasted time and money. The problem is, most marketers and finance people are still using the old analysis systems. They aren’t aware of how Big Data and AI have changed marketing ROI analysis. That means a lot of marketers are missing out.
You mention waste in advertising. The Association of National Advertisers (ANA) released a report after an eight-month investigation that found advertising agencies systemically padding their profits by using non-transparent practices such as taking rebates from media companies and not disclosing them to clients. Does your software help address these issues of agency transparency?
The ANA report was a bombshell in the advertising industry. Every senior marketer and finance leader should take a read so they can protect themselves. In light of the revelations in the ANA report, we looked at this situation and said, “There has to be a better way.”
We developed a two-track approach. One track is to take our technology directly to the marketer. With our software, marketers can build their own media plans, or check the media plans their agency has proposed to them. This gives marketers and finance total visibility and control.
The second track is to certify advertising agencies to use our technology to ensure transparency. The agency builds the media plan in our software. The agency adds their expert human judgement on top of the data driven plans generated by our software. Any changes the agency makes are logged in our software so there is an audit trail. Our software creates complete transparency, and works directly with auditors.
As we started working with select advertising agencies, we saw that many of the people we met want to do right by their marketing clients. However, their approach to media planning and buying is manual, inefficent and messy – it isn’t a shock that there are problems. These agencies like the automation and labour savings from using our software. For example, if the software detects that rainy weather decreases sales by 10%, the ROI Brain automatically reads the weather forecast for the next week, and makes adjustment to media based on the weather patterns. If the software detects that one of the advertisements is working better with women who like exercising, the software has detailed profiling of every media placement, and will automatically adjust the message targeting accordingly. Can you imagine how labour intensive it would be to make all these changes manually? Agencies old approaches to media planning and buying simply aren’t fast enough to gain the benefits of real-time marketing ROI analysis.
The better agencies respect marketer’s right to have direct visibility into media planning, buying and optimization. They love the automation. There are some agencies that don’t like the power our software gives to marketers – but I can tell you, marketers love it.
You mention that better agencies respect the right of marketers to use your software to have direct visibility. What differentiates the good actors from the bad actors in the agency world?
If you are wondering how to spot a potential bad situation with an advertising agency, a tell-tale sign is if the agency is trying to sell you on having them do their own attribution or marketing mix models. The dirty little secret about the old generation of mix and attribution models used by agencies is the extent of human decision-making and interpretation in the models. This leaves room to manipulate the model recommendations. The new generation of analytics we apply is much more detailed and therefore removes the risk of an agency steering dollars toward media where the agency is getting rebates or so called kickbacks.
Other signs of a problem with the agency include a resistance to sharing all their buying data in a consistent machine-readable format with an independent measurement company or auditor. Or, contracts that give the agency ownership of the marketer’s data.
The ANA report gave us a renewed sense of purpose around giving marketers and finance the right tools for independent ROI measurement. Checks and balances are important. The old saying, strong fences make good neighbours applies to the marketer/agency relationship. A good agency can be an amazing partner for marketers to achieve their business goals – but it is important to have some well-defined boundaries and independent review. I think it is a good sign for the industry that several agencies have asked to be trained and certified on our software.
You’ve won several new retail customers in the past year based on your use of location analysis. Can you tell us more about location analysis?
Our analysis is at the person-level. That means we factor in how close a person lives to a store, their local weather, the options to purchase from a competitor, even the specific billboards the person will pass on their commute to work.
Our customers wanted to measure the effect of advertising down to the specific store. When we worked with Walmart, we learned that the top three deciles of most profitable customers could largely be explained by how close they lived to Walmart. Perhaps that’s not surprising, because the old saying about retails is, “What is the three most important factors in retail? Location. Location. Location.”
Yet, the old approaches of attribution and mix modelling couldn’t tell a marketer when and where to activate a mobile geo-fence offer, or to buy a specific billboard, or which TV placement will disproportionately reach people that live close to your stores, or any of the other decisions that are location specific. Our new generation of analysis, which is location aware, showed the specific incremental contribution of geo-targeted mobile advertising, and every other form of advertising. Walmart shared the results publicly, and showed how we helped increase their ROI using our Big Data analysis. This location analysis capability has been a winner and was a factor in several retailers becoming customers in the last year.
It was announced that you’ve teamed up with Joel Rubinson, the former Chief Research Officer for the Advertising Research Foundation. He says he wants to disrupt the New Product Forecasting industry. Can you tell us more?
Joel is an expert in new product forecasting. When he read about our person-level analysis, he had an epiphany. The old generation of new product forecasting that is still used by many companies today isn’t linked to detailed media planning software. He saw an opportunity to re-invent new product forecasting.
The product, MoreCastR, has an eight factor scoring system to identify the people with the highest propensity to try a new product. It scores everyone in the country with a look-alike model and then concentrates the advertising on these people. This approach dramatically reduces wasted impressions on people unlikely to try the product. It boosts sales results by ensuring those most likely to try the product have sufficient level of advertising exposure. A leading consumer package goods company has successfully completed the beta test. We will unveil the capability at our customer roundtable in Los Angeles, in April.
Tell us more about the customer roundtable. What do you hope to accomplish at the event?
I have a passion for making marketers smarter and giving them a competitive edge. The roundtable will feature many of our customers sharing their success stories, and what they hope to accomplish in the future with our software. It is a great opportunity for our customers to share ideas and network with one another. Several of our data and technology partners will present how marketers can use their capabilities to get more value from the ROI Brain.
In addition to the customer roundtable in Los Angeles, we are hosting a European tour designed to bring some of the best content from the roundtable to Europe. We are doing two-hour briefing sessions for marketers upon request. Both events are free education events because we love to share what is possible with marketers. We hope the events will open up business people’s minds and inspire marketers to evolve faster than their competitors.
What do you find most enjoyable about your work and why?
I enjoy onboarding new customers. Most marketers hear what we are doing, and it sounds difficult. But, in reality, we have automated so much of the data and analysis that it takes less than six weeks for a marketer to get up and running. There is something about that moment when a marketing team gets around the table together, and realizes that it is actually easier to benefit from the new generation of analytics than it was for them to use the older approaches. I get a lot of satisfaction from helping marketers take this step into the future. I enjoy the bond that forms between our team at Marketing Evolution and our customer’s team. I’ve made lifelong friends through our work with our customers. I appreciate the opportunity to help marketers to evolve.
You successfully grew Marketing Evolution for more than a decade without any outside capital. What made you decide to go from bootstrapping the business to taking Venture Capital now?
I love the fact that over the last decade, our growth was entirely fuelled by providing great software and analytics to major marketers all over the world. According to Pacific Crest, less than 5 % of SaaS businesses achieve our scale without Venture Capital or significant debt. We have over 50 enterprise customers, including marquee brands like Amgen, Best Buy, Citibank, Timberland, Warner Brothers and more. We grew entirely by word of mouth from one CMO to another. It is a great way to grow, but here’s the thing: Most marketers have not heard of Marketing Evolution – and therefore these marketers are missing out.
I want to see marketing evolve to be more data-driven. I want to see waste and inefficiency removed from the advertising system. I want transparency for marketers. I want to see marketing become more personally relevant to consumers. We are using additional capital to get the word out so more marketers can benefit from Big Data and AI.
We’ve been approached by a lot of VCs, but it wasn’t until I met Mark Gorenberg, founder of Zetta partners, that I found the right fit. He understood how AI is changing business. He was the first investor in Omniture, DOMO, and Inside Sales – each achieved phenomenal growth and over a billion-dollar valuation. With Mark’s help, we are applying the same playbook that’s helped propel his other investments to great success.
What lies on the horizon for you and Marketing Evolution in 2017?
We have lots of hiring to do. We are recruiting for a VP of Talent & Recruiting, a Chief Revenue Officer, a Chief Marketing Officer, and building out our sales team. We’ve got a great product team and product – we will continue to advance it. We are opening EMEA operations with a team in London. We want every major advertiser to know about Marketing Evolution and how we are changing marketing analytics.