28
Oct

Convergence Analytics Now: 3 Ways This New Market Changes Everything

Written by Andrew Edwards. Posted in Convergence Analytics

Convergence analytics has been called “multi-channel analytics,” “big data visualization,” “business intelligence for marketers,” “real-time analytics,” “enterprise analytics,” and very recently even “omni-channel analytics.” It’s a safe bet that a hundred different vendors are fielding a tool (or suite of tools) that they will claim, in some way, shape, or form, can “measure data from any source” and “present it to the [target audience] in a visual, interactive interface.”

The most remarkable aspect of the market right now is its relative incoherence as compared to more mature markets like “digital analytics” or “direct marketing.” As the market begins to crystallize, both vendors and practitioners will need a core set of definitions around which to formulate requirements and offerings; hence the need for an overarching concept like convergence analytics.

The convergence analytics market encompasses all of these buzz factors and more. It represents the future of all digital analytics from this day forward. As has been said about other rapidly growing industries, “it’s still early days,” but we’re seeing an explosive growth in offerings, and if you’re not already dealing with CA today, expect that you’ll need to do that in the not-very-distant future.

Convergence analytics, from a technology-centric viewpoint, represents an emerging market that concentrates on the confluence of digital analytics, big data, robust algorithms, and advanced visual presentation. From a marketing standpoint, it’s about the “un-siloing” of data from a variety of places within the organization. Start with the combination of desktop, mobile, and social; then go from there.

How It Changes Everything

1. Web, social, and mobile: not cutting it anymore. When we ran our first CA survey, about half of the respondents said they defined “multi-channel” to include the above three disciplines. However, the other half said it included those plus more channels. The number of organizations needing to combine data from more than just these three sources is growing rapidly. “Web analytics” is already retired as a term in and of itself. “Digital analytics” seems fairly coterminous with the above three areas of interest. But just those three don’t cut it anymore. Organizations now want to look at those plus demographics, campaign data, ad-buy data, e-commerce data, in-store data, call-center data, CRM data, unformatted data from a variety of sources, and so-called “big data,” which is a buzzy way of saying “everything that can be tracked.”

2. Connectors, connectors, connectors. As in real estate, in which “location” completes the three most important aspects of a property, connectors may prove to be the most important asset a convergence analytics vendor possesses. Much of the technology behind connectors (and the rest of CA) has been around for some time, yet now it is put together in new ways (the Wright brothers did this with bicycles, boats, and kites; we ended up calling it an airplane). Now existing technologies are coming together to form convergence analytics.

But the most important unit of CA vendor technology – the one they build their businesses around – are the connectors they build to a variety of data sources. If they don’t work properly, nothing else in the analytics process works either.

In order to master convergence analytics, many practitioners will have to understand some previously data-scientist-only terminology like “ETL” (extract, transform, load) – which is what connectors really do. If you thought marketers had already needed to go a long way toward technology and data, it’s only just begun.

Getting to know the details behind how data integration actually deploys will change the workday of every marketer from now on. And if you’re not doing so already, get ready in the near future to ask your current or prospective analytics vendor about how many channels they connect to – and what they will do if you have a new data source for which they don’t already have a connector.

3. Convergence analytics ownership in flux. Who will own convergence analytics? It’s destined to become the clearing house for all marketing data (and much that isn’t related to marketing); but it represents a much higher technology bar than any breed of tracking tools that have gone before. Will marketers really run convergence analytics the way they have run digital analytics? Will they want to? Will the CMO be responsible for a vendor solution that crosses not just marketing disciplines but also IT, sales, operations, and perhaps even finance? Will she want to? Will newly minted data scientists rule the convergence analytics roost?

All of this is unsettled and up in the air. But it’s going to land soon – probably pretty near your desk. And when CA becomes the norm (as it soon shall), get ready for some major organizational changes. Whomsoever can claim to understand this new type of offering best and most comprehensively will likely carve out a new and very desirable niche for themselves within the organization.

The insights available from the control of an unprecedented amount of previously siloed data is going to be – unprecedented! And the winning organization will be the one that gets out ahead of these major transformations with the right people in the right place at the right time.

 

10
Oct

Convergence Analytics 2.0: Everybody is Still Measuring Everything

Written by Andrew Edwards. Posted in Convergence Analytics

How much does multi-channel analytics really help the marketer?

It’s hard to believe it was only six months ago when ClickZ published the first Convergence Analytics Report that I co-authored. We just launched the second Convergence Analytics report at SES San Francisco and I feel like we were barely able to document some of the latest changes taking place in digital analytics today. Suffice it to say things are moving very, very fast in this field.

Our tag line for the first report was “everybody’s measuring everything”. We were referring to the way nearly every vendor and many practitioners were planning to broaden their web analytics plans to include social, mobile, demographic, seasonal, advertising, customer relationship management (CRM) data and more into a single discipline.

Some folks call it “multi-channel analytics”. We called it Convergence Analytics because we were describing the convergence of many channels into a single tool—but also because we were describing how a multitude of vendors were converging on the notion of providing a single view into many measurement channels.

Today the rush to single-vendor solutions seems more headlong than ever.

But just because everybody’s doing it, does that mean it’s a good thing?

Allow me to answer that question with a definite “maybe”.

It’s a “good thing” if certain criteria are followed:

  • the practitioner has in place both expertise and a process for deployment and action
  • the vendor is in fact delivering an integrated, robust and accurate solution
  • expectations are kept in check
  • costs are managed

In our second report we called out a number of factors that seemed to be impeding adoption of what really is a good idea – the ability to see more data at once, more quickly and at lower overall cost.

The biggest problem in a volatile market like this is that it’s very confusing for the buyer. There are simply too many analytics vendors talking about the same thing. Some are aligning what they say with what they deliver, and that’s the way it ought to be.

Many more are shoehorning themselves into what sounds good at the moment, and at the moment that might be multi-channel analytics. Paraphrasing an old Love Story, “SaaS means never having to say you don’t do that.”

Tomorrow the same vendors will pull back and say they are vertical (specialized for a single-market or single-solution) and would not dream of trying to be all things to all people when their tool is limited or perhaps unfocused. Because that would be dumb. And because investors aren’t putting their money into companies that say they measure everything for everyone all the time (which is probably true).

The ability to look at more information from more sources in one place is prima facie advantageous. For the general public, a device that provided this would have been called (until recently) “the newspaper”. For digital businesses, it’s more technological and less obvious, but it’s the same sound principle: the more you can know about your world, the better decisions you can make.

A newspaper might have told you it was likely to rain later. Better put on your boots. And it might have told you the garbage collectors were striking so you might also want to pack a posey. What about an analytics tool that could tell you how web was affecting mobile, and further, help you automate the content served to specific customers in your CRM database?

A digital analytics tool that would tell you only what was going on with your web pages, and assuming you didn’t have other ways to measure or act upon the rest of your digital properties, would be a prime candidate for retirement. Is it any wonder why, with the sudden emergence of a hundred and one digital channels, that every company that ever measured anything, and some that really never did, would flop towards the concept like seals to a bucket of mackerel?

Seals are smarter than that, and so are most vendors. The bucket of mackerel has only a certain amount of fish in it. And the notion that to measure everything is something everybody can do is more than a little bit fishy. Vendors without strong, integrated offerings and enough cash or customers to stay competitive will either go the way of all seals or find another pool to swim in.

Some market-leading companies, and some very capable upstarts will thrive and prosper in Convergence Analytics. They will find customers that have the right expertise and processes in place to make worthwhile the effort of deploying a complex measurement application. Their tools will be powerful, different and useful, rather than just cleverly described.

I believe the future will see marketers looking at multiple streams of data in contextually relevant ways that help drive their marketing programs more quickly, more efficiently and in a way that yields more tangible results.

At that time, the “maybe” I suggested above would become a more definite “yes”. But until we can better understand how to select and deploy the right technologies and disciplines at the right time, we are just splashing around in the crowded, shallow end of the pool.

19
Sep

Real-Time Confessions From an Analytics Executive

Written by Rand Schulman. Posted in Convergence Analytics

I have just sat down for my morning coffee and paper, and the phone rings in my office. The VC partner on the other end asks for my advice about a deal they’re looking at. The conversation starts something like this, “We’re looking at the marketing space, specifically at real-time, cross-channel, marketing automation or analytics firms and want to get your thoughts.” He’s come to the right place.

Over the last few quarters, at Efectyv Digital, ClickZ, and Incisive Media, we’ve been taking a hard look at the convergence analytics marketplace, with our next report due out in a few weeks at SES SF. We’ve reviewed the technologies, the people, and the processes, the customers and the benefits, and a few things jump out: the first – a lack of clear product definition/market fit. The second – a deficit of rigor on the part of the vendors who make statements about their product capabilities lacking a clear framework of nomenclature. The two combine creating a toxic mix for the market.

As I mentioned in a public presentation last month for SEMPO at TBWA/ Chait Day / LA, as an analytics company executive, I’ve targeted my fair share of the less-than-educated buyers, and marketed products that I knew were not perfect. But, unlike those times in the past, it seems today there’s an order of hyperbole, fueled by billions of VC dollars looking for an investment; enterprises looking for a quick fix to cut costs, all being promoted by perky vendor company executives lubricated by those funds, extolling the goodness of their Kool-Aid. This perfect storm helped create convergence analytics – with everyone claiming to measure everything. Clearly there are big winners.

In our upcoming report we’ve identified almost 90 companies that are doing much of the same thing in this sector, but coming from different perspectives. They use many of the same words to describe what they do – using expressions like big data, predictive, real-time, and multi-channel when, in fact, there isn’t a good common definition for any of the words, according to our study of almost a half million marketing people. It is certainly compounded when vendors seeking ultimate positioning string all the words together in one big tag line that says really absolutely nothing at all.

There are actually several companies that say they’ve created a “real-time marketing analytic platform with a predictive, social, and mobile reporting engine.” Maybe so, but find out. Ask them what they mean and ask them about how their customers are taking advantage of the products and creating an ROI. In these last months we have been asking for those customer names and use cases to support vendor claims and have unfortunately found too few. There were other companies, like Adobe, who were very candid and detailed.

I mention this to my caller. He wasn’t surprised, as he’s hearing similar comments from customers where products sit unused. We used to call it shelfware, when there was a box. Today, companies are being acquired, downsized, and restructured across the convergence analytics sector as revenue goals remain elusive and aspirational. I work with many of these firms attempting to “unlock their shareholder” value. It’s how I earn my living today after being an operating executive for three decades. I believe a shakeout of sorts is beginning in the sector, due to an abundance of unremarkable companies, with unclear or ambiguous differentiators, and huge looming competitors.

We’ve seen similar consolidation in every market from operating systems to word processors and spreadsheets; CRM and databases; web analytics firms; and marketing automation companies. Now the marketing suites are being built by four or five big consolidators with “marketing clouds” – Salesforce.com, IBM, Adobe, and Google. The music has stopped for a few smaller companies. It’s time for them to find the chair.

I mention this too to my VC caller. He wonders if there are any distressed property “buys” out there, or “roll-up” possibilities he should look at. I reply, “Yes, quite a few.”

Investing sobriety is obviously gripping VCs. The first generation of cloud companies, like Salesforce.com, tried to cater to every sector. Thoughtful venture capitalists are now betting on startups that have a narrow focus.

I met recently with my colleague Brian Jacobs, a general partner at Emergence Capital, at his office to talk about his take on convergence analytics. As one of the premier VC firms they have a strong track record in backing disruptive startups like Salesforce.com, Successfactors, Yammer, Yousendit (now Hightail), InsideView, and others. Brian was candid telling me that today they are mainly looking to fund vertical solutions, not horizontal plays. “The cloud has enabled a new breed of vertical industry solutions that are capital efficient and can really meet the needs of customers in a specific industry,” he said. I agree.

Convergence analytics companies struggling to differentiate in an evolving market need to verticalize to survive Darwinist twists. According to a recent Venture Beat report, a vertical strategy lets entrepreneurs apply deep domain expertise to an industry and respond to its unique requirements. Beyond Emergence, Andreessen Horowitz and Illuminate Ventures both focus on vertical cloud startups, as opposed to horizontal solutions, where the market leader gets 5 to 10 percent of the market, and expands by attacking more industries. Vertical solutions can become an industry standard and expand by selling more solutions to the same buyer.

Thus, dear readers, consider these do’s and don’ts:

  • Buyers. Do clearly understand your objectives before you go shopping for solutions. Understand your resources, timeframes, and goals. I’ve been calling them the New Marketing 4 Ps of people, process, purpose, and platform. Ask clear questions from your vendor about their capabilities and customers. Don’t buy a solution looking for a problem. Start small with the right resources. Don’t begin unless you know the new 4 Ps.
  • Vendors. You cannot continue to be all things to all people. If you are small today, it will be very challenging to be part of a larger horizontal suite. You can no longer be building a solution looking for a problem. Nor can you be a small “Jack-of all trades, master of none” company – a lifestyle business. Real-time and multi-channel are not a product, neither is predictive, mobile, or social. They are capabilities and channels. Do, however, differentiate and create from your technology a vertical solution, perhaps targeting an industry. As Geoffrey Moore explained in his book “Crossing the Chasm,” companies need to “Create a 100% whole product by capturing a beachhead” and expand from there. Do be honest with yourselves, your investors, and the market. Maybe go back to the drawing board. Or get tucked under sooner, rather than later, to unlock your shareholder value, even if it’s pennies on the dollar. Do move on to the next big thing. Remember how Twitter got its start.
  • Investors. Back CEOs and founders who have a vision of a differentiated product, and who are not just doing more of the same. Don’t look for broad plays, look for narrow plays. You know home runs are rare. If you’re not getting results within 18 months, don’t be afraid to make major changes in leadership, product, or market direction. Or, look to consolidate. Don’t scale too early. And don’t confuse positioning with differentiation, as this market is really tricky. There are plenty of cool, original deals out there, so please don’t continue throwing your good money after bad.

After about an hour my morning call ended. This time the VC caller decided to “take a pass” on the deal he called me about, but we agreed to stay in touch regarding other opportunities that may arise from the shakeout. I have a few ideas for him.

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