The Case for the Chief Digital Officer

I’ve just published new research with Constellation focusing on the role of the Chief Digital Officer (CDO). CDOs are relatively new and many organizations desperately need them to help build capabilities and competitiveness.

In summary:

Digital disruption has affected every industry around the globe, bar none. Emerging technology has shifted the balance of power from long-standing institutions to newly formed entities that have been designed to capitalize specifically on the contemporary operating environment.

Constellation’s PESTEL (political, economic, societal, technological, environmental, and legislative) framework helps identify the major elements of the shift to digital, but today’s brands are not staffed or structured properly to succeed in this transformation.

A Chief Digital Officer is the leader to help companies navigate successfully through the current era of digital disruption. The CDO charter includes formulating digital business strategy, activating operational initiatives, and managing organizational transformation.

But the roles of CDOs are not one-size-fits-all; brands should hire and focus this executive on a critical set of industry-specific challenges.

The responsibilities of a Chief Digital Officer vary based on industry and company need; I’ve identified three major types of CDO segmented by business model and customer value proposition.

To download a summary of the report, click here.

For additional perspective, see Beyond the CIO/CMO – The Rise of the Chief Digital Officer from my former colleague Dion Hinchcliffe.

For Sale: A Craigslist Story

I put an item up for sale on Craigslist. This is what happened.

 

+13477044073: is your [item] still for sale 11:29 AM
Me: Yes it is 11:30 AM
+13477044073: (1/3) I am pleased with the price.so I would love to pay you via PayPal,the PayPal charges is on me,If my offer is accepted, Get back to me 11:31 AM
+13477044073: (2/3) with your PayPal email and your name or send me an invoice [email protected] so i can pay you right away , i would arrange pick 11:31 AM
+13477044073: (3/3) up after payment is received. Confirm the sales to me by removing it from post. 11:31 AM

 

So many flags. Grammar. Punctuation. “invoice.” “pay you right away.” The email address led to some more clues and the name “Charles W. Marthenze.”

And then this happened.

 

+17856705185: [item] still available for sale? 1:22 PM
Me: Yes 1:23 PM

 

+17856705185: Are you the first owner? 6:18 AM
Me: Yes, since 2001 7:01 AM
+17856705185: I hope the condition is exactly as described? 7:03 AM
Me: Of course. You’re welcome to swing by and see it in person. 7:05 AM
+17856705185: Ok,get back to me with your paypal name and e-mail so that i can proceed with the payment. 7:08 AM
Me: No, you should really come by and see it first. What part of town do you live in? 7:09 AM

 

+17856705185(1/6) I am an honorable military woman and you will receive your money cash in hand before this is picked up. However,it easy and free to 7:10 AM
+17856705185: (2/6) open a paypal account. Just go to www.paypal.com & register an account.Paypal is the world leading payment master that protects both 7:10 AM
+17856705185: (3/6) buyer/seller. We are on a secured transaction with paypal. Above all, it’s like instant cash. As soon as you open an account, get 7:11 AM
+17856705185: (4/6) back to me with the name and email that you linked with your paypal account and I will have your money sent asap.I feel more 7:10 AM
+17856705185: (5/6) comfortable sending my funds via paypal due to their various security measures at ensuring safe and secured transaction between both 7:10 AM
+17856705185: (6/6) buyer/seller. 7:10 AM

 

Me: What branch do you serve in? 7:11 AM
Me: Answer my question and I’ll give you my name and Paypal email. 7:16 AM
Me: Hello? 7:35 AM
Me: Are you still interested? 7:35 AM
Me: I have my name and paypal email ready for you. 7:36 AM
Me: I respect you, honorable military woman! 7:36 AM
Me: You can be the second owner! 7:36 AM
Me: What is your name and Paypal email? 7:36 AM
Me: Can I just send you the money directly? 7:37 AM
Me: I guess it would be pretty far to drive from Topeka to see the table in person, huh? 7:38 AM
Me: What do you think about the condition? 7:38 AM
Me: Why are you suddenly so non-responsive? 7:40 AM

 

Me: I just signed up for a Paypal account and I need you to tell me what to do next. 7:42 AM
+17856705185: Get back to me with your paypal name and email to enable me make the transfer of funds. 7:44 AM
Me: ok 7:44 AM
+17856705185: What is the delay all about I am still waiting to have your paypal email and name so that I can make the payment. 7:48 AM
Me: are you ready to receive the requested information, my official paypal name and email in order to enable you to make the transfer of funds? 7:48 AM
Me: oh, I’m so excited to sell this to you!!! 7:49 AM

 

Me: Can I trust you? 8:27 AM
+17856705185: Why not? of course yes. 8:28 AM
Me: OK great. So you just need my name and paypal email then and you will transfer the $500? 8:29 AM
+17856705185: Yes. 8:34 AM
Me: Charles W. Marthenze, [email protected] 8:34 AM
Me: Let me know when you’ve made the transfer! You can also text me at my other phone number: 347-704-4073 8:35 AM

 

+17856705185: You must be a lunatic,go jump into an active volcano and DIE. 8:41 AM

 

Salesforce’s ExactTarget Marketing Cloud combines Radian6 and Buddy Media into the Social Studio

Salesforce.com’s ExactTarget Marketing Cloud unit has combined Radian6 and Buddy Media into a single offering called Social Studio.

Consolidating these social tools allows the company to sell a one-stop social solution, reflecting a maturing market on the client side where most companies have gotten their social media management (organization, process, and now tools) in order.

ExactTarget can now consolidate its focus on winning marketshare on a bigger stage: marketing, inclusive of social media. Over the past five years, social media has been a catalyst driving technology innovation and marketing opportunity. Now that most brands have figured out where to play and how to win in social, the focus returns to the big picture and bigger budgets.

The Radian6 Buddy Media Social Studio offers everything a brand requires to manage social media: collaborative workspaces, calendars and workflow, multi-platform publishing, listening, and content analytics. I expect the offering to compete primarily against Oracle’s Social Cloud, Sprinklr SxM, and Adobe Social. However, the ExactTarget, Adobe, and Oracle solutions are parts of larger marketing  clouds and enterprise platforms, which can help open doors to the larger budgets of the CIO and influence of the CMO, beyond the scrappy social media team that exists at many brands.

The Salesforce ExactTarget Marketing Cloud
The Salesforce ExactTarget Marketing Cloud

Brands will be increasingly offered incentives to commit to a single vendor’s marketing cloud and must weigh the benefits and discount of a single solution versus the risk and cost of self-integrating best-in-class point solutions. Very few brands operate entirely under a single vendor’s cloud today and this is a zero-sum game. For example, JetBlue is referenced as using Radian6 Buddy Media social studio and last week JetBlue was referenced as a Responsys customer. What happens next? Does JetBlue convert to the entire Oracle Marketing Cloud, ditch Responsys for ExactTarget, or continue to operate different tools in what appears to be different silos of the organization? Most brands are going to be asking themselves similar questions over the months ahead.

Challenger brands may believe that “you don’t have to be the biggest to be the best.” However, the market is clearly heading in a direction that values the ability to deliver on a truly customer-centric perspective. Adobe’s Marketing Cloud has a master marketing profile and Oracle’s Marketing Cloud has a universal customer profile.  Brands need a single perspective on the customer across the entirety of MARKETING, not just social media. Ultimately the large marketing clouds will win while incorporating innovative features from smaller startup vendors. Although the product name is a mouthful, the Salesforce ExactTarget Marketing Cloud Radian6 Buddy Media Social Studio is an inevitable step towards consolidation and single-source management of the customer relationship/experience.

Oracle launches the Oracle Marketing Cloud

Yesterday Oracle formally announced the launch of the Oracle Marketing Cloud.

If you’ve been watching the industry, you may be wondering “didn’t they already have a marketing cloud?” They’ve had all of the pieces, yes. Before yesterday there was an Oracle Social Cloud comprised of the solutions formerly known as Vitrue, Collective Intellect, and Involver. And the company had other marketing solutions including Eloqua, Responsys, Compendium, and BlueKai. As of yesterday, those pieces are now formally brought together as a single solution:

Oracle Marketing Cloud
Oracle’s POV on its marketing cloud positioning (Source: Oracle)

This launch matters in the context of Oracle’s overall go-to-market and here’s what matters:

1) Potential for revenue growth.

Oracle is a $40 billion company. According to President Mark Hurd, the marketing cloud gives Oracle an application to sell in to a new audience: the marketing department. The market for enterprise applications is dominated by a handful of heavyweight contenders including SAP, Oracle, and IBM. All three of these firms are interested in leveraging their longstanding CIO/CTO relationships to connect with the CMO and become the enterprise system of record. The Marketing Cloud business is worth “hundreds of millions of dollars” modeled as annual recurring revenue and selling in to complement financials, operations, and other systems would be a strong source of revenue growth for the company. But Oracle can’t walk into a CMO’s offer with a menagerie of acquired point solutions — the single Marketing Cloud product allows sales to offer an enterprise-level platform.

2) Integration will make or break the Cloud.

Marketing Cloud General Manager Kevin Akeroyd stated the critical success factor in the near-term competitive landscape: “anyone with access to capital can acquire companies, but whoever integrates best will win.” This requires integration of code in order to facilitate data sharing between solutions; in Oracle’s case, it offers a Universal Customer Profile as the customer-centric backbone of its systems. Moreover, change management is just as important in ensuring post-merger integration success and the Oracle teams cite a high retention rate of management from Vitrue and other firms indicating positive results.

3) There’s something missing.

Oracle openly acknowledges there’s additional work to be completed in building out the Marketing Cloud solution. Although AppCloud offers connections to a wide variety of point solutions, Oracle still needs a tightly integrated solution to deliver on the need for marketing metrics tied to business objectives. And not just social media measurement or web analytics — marketers need customer-focused omnichannel metrics with proper attribution to understand campaign performance.

Final thought: social becoming increasingly siloed

It’s interesting to see Oracle’s Social Cloud subsumed by the larger Marketing Cloud. While social media had its heyday and undoubtedly plays an important role in customer engagement strategy, it’s ultimately just one element in the larger marketing picture. Over the course of this year, look for the word “social” to disappear from product offerings and marketer lexicons, just as “.com” disappeared from company names and logos once brands discovered that digital business is really just “business.”

In the other direction, the cloud competition is becoming increasingly expansive and the stakes can’t get much higher. James Bond fans might remember the video game that Sean Connery plays in Never Say Never Again called “Domination,” that delivers electric shocks to the loser. Except in this case the price of defeat is going to cost a lot more than $267,000.

Sprinklr’s $40M Series D round: what matters

This morning, Sprinklr made a two part announcement.

1) The availability of an integrated paid social media solution.

This capability allows Sprinklr clients to manage owned media (publishing), earned media (via listening/engagement), and now paid media (social advertising).

Sprinklr will claim competitive advantage in offering a single integrated data model vs. apps in parallel (Adobe), UX overlay (Salesforce), or API partners (Oracle).

Sprinklr competitive advantage
Sprinklr’s take on “depth of software integration” and how that leads to competitive advantage.

In theory, tighter integration can offer more powerful data analysis capabilities. In practice, Sprinklr cites an unnamed client that saw a 25% lift in paid social ad performance from using the module.

My take:

The “big three” marketing clouds already offer paid social ad creation, placement, measurement, and optimization: Adobe’s Media Optimizer, Salesforce’s Social.com, and Oracle via API partners Kenshoo, Nanigans, and SHIFT. This added capability brings Sprinklr up to par with bigger players in social media management functionality and just in time as paid social gains increasing priority in the paid/earned/owned media landscape.

2) A $40 million Series D financing round led by Iconiq Capital

This round brings Sprinklr’s total capital raised to $77.5 million. Sprinklr’s previous three funding rounds only had two participants: Battery Ventures and Intel Capital. But Iconiq Capital isn’t a venture capital company; it’s a registered investment advisor (RIA).

My take:

This is an interesting lead investor, especially for the social media space in which Sprinklr currently operates. Unlike VC funds that typically get passive investments from pension funds and insurance companies, Iconiq handles the private, personal investments of individual clients including Mark Zuckerberg, Sheryl Sandberg, and Sean Parker, among others. Investors like to smooth the road ahead for their investment vehicles and those are three pretty powerful operators to have on your side.

Sprinklr tells me that they intend to use the round for “growth.” This can only mean organic expansion, because the round isn’t big enough to start acquiring pieces to build a complete marketing cloud (e.g. a marketing automation solution).

What Sprinklr’s annoucement means

Valuations typically aren’t disclosed, but Sprinklr undoubtedly has its sights set on joining The Unicorn Club and potentially filing for an IPO between now and 2015. The alternate route would require a bigger player stepping in to acquire Sprinklr, which is becoming an increasingly expensive proposition (but still no big deal for the deep pockets of an IBM, SAP, or Microsoft). Sprinklr’s preference would appear to be the former, as it has shown an inclination to build (e.g. listening and paid social) rather than buy (the exception being Dachis Group which provided some code and mostly developers).

Bigger vendors must evaluate the growing threat that Sprinklr poses to the early market-leading clouds. Smaller vendors need to bulk up or get bought out soon, before going the way of Argyle Social.  Clients/end-users need to evaluate their marketing technology stack and decide whether running a collection of best-in-breed point solutions still makes sense or if committing to a larger integrated cloud now will pay bigger future dividends.

Briefings this week: April 28 – May 2

Here’s who I’m briefing with this week:

Tuesday

  • Salesforce ExactTarget Marketing Cloud

Wednesday

  • Oracle Marketing Cloud

 

As a reminder, I’m interested in hearing from companies that enable customer experience management, provide marketing services (including agencies and consultancies) and support innovation agenda items.

If you are interested in briefing Constellation Research on your marketing technology, visit the Contact Us form.

Report: State of Community Management

The Community Roundtable, founded in 2009 by Jim Storer and Rachel Happe, has deep expertise in advancing the business of community.

The Community Roundtable State of Community Management 2014

This week The Community Roundtable has released the 2014 State of Community Management report, with three key findings:

  1. Community maturity delivers business value.
  2. Advocacy programs increase engagement.
  3. Executive participation impacts success.

To download the full report, click here.

Briefings this week: April 21 – 25

I am taking briefings with these companies this week:

 

Tuesday

  • Sysomos

Wednesday

  • Adobe
  • Beckon

 

As a reminder, I’m interested in hearing from companies that enable customer experience management, provide marketing services (including agencies and consultancies) and support innovation agenda items.

If you are interested in briefing Constellation Research on your marketing technology, visit the Contact Us form.

Briefings this week: April 14 – 18

I am taking briefings with these companies this week:

 

Monday

  • Adobe
  • Alexa

Thursday

  • Hubspot

Friday

  • Sprinklr

 

As a reminder, I’m interested in hearing from companies that enable customer experience management, provide marketing services (including agencies and consultancies) and support innovation agenda items.

If you are interested in briefing Constellation Research on your marketing technology, visit the Contact Us form.

Social business and beyond.