TrustRadius @ Dreamforce: Interview with Christopher Golec, Demandbase CEO
Demandbase is an Account-based Marketing (ABM) solution with capabilities for targeted web advertising, website personalization and ties to CRM. Per Wikipedia, account-based marketing (ABM), also known as key account marketing, is a strategic approach to business marketing in which an organization considers and communicates with individual prospect or customer accounts as markets of one. Demandbase is a highly rated solution on TrustRadius with an average 4.3/5.0 likelihood to recommend score. They recently acquired a company called WhoToo, which will help Demandbase add “types of people” persona profile data to the mix, making campaigns more targeted.
What’s new at Demandbase?
We’ve built out our B2B marketing cloud solution with a platform for advertising, personalization, and now CRM. Our comprehensive approach connects results from advertising, web site and selling programs at the account level, fueling ABM (Account-Based Marketing), which B2B companies are rapidly adopting. We started to experience a lot of traction a few years ago in high tech, but now we are seeing adoption by financial institutions, healthcare companies, and manufacturers..
Our underlying data assets are driving the success of our ABM solutions and we continue to invest in growing these. Last week we announced the acquisition of WhoToo, a Seattle-based company focused on building persona profiles of people (hundreds of millions) and interests in functional areas. Our core data asset has always been a proprietary mapping of network IP address to accounts around the world. WhoToo brings in “types of people” data—for example, now I can laser target the finance people at Fortune 500s. WhoToo also brings a team of data engineers that built some pretty interesting technology and sophisticate architecture to compile these profiles. I’m pleased to share that 100% of WhoToo employees are now Demandbase employees. It’s exciting. This acquisition is a big step-change to our competitive advantage in terms of data in the B2B landscape.
In the last few months we’ve seen a lot of new entrants and development in the ABM space. What do you see as driving the evolution of ABM?
The alignment of sales and marketing teams. ABM is about marketing to the accounts your sale steam values most. This fundamentally changes the metrics of marketing success.
Typically marketing has been all about volume—more leads, more clicks, more visits. Sales teams typically don’t care about any of these goals. Demandbase throws those metrics out the window, and asks the more important question: “for these hundred companies in this territory, did my advertising programs drive sales activity?” The measurement of success is sales activity, not a click-through rate. ABM perfectly aligns sales and marketing teams, and we’re starting to see more and more interest. A lot of companies have been executing target accounts or named accounts-based strategies in an analog fashion, but with Demandbase now you can do it at scale using technology.
Historically, Demandbase was known for its reverse IP technology. Can you fill us in on your updated go to market offering for ABM?
Reverse IP methods are very basic, but don’t work well enough for the majority of customers which is why we built and patented methods for driving out a much more comprehensive proprietary data asset. Early on, we could have gone down the path of just licensing the data, but I felt we would deliver a ton more value if we could show people how to improve their marketing performance. So while we continue to build out data assets, the tangible value is in the technology and solutions that plug into the advertising, marketing and CRM stacks. Today, we plug into 50+ CMS, marketing automation, web analytics and CRM systems; and hundreds of advertising exchanges. Oddly enough, no two customers use the exact same combination of solutions.
Our initial products focused on the website and improving engagement. But one of the big problems our customers had was that they had all the wrong people or companies on their website. We saw a unique opportunity to build out an advertising platform to improve the quality of traffic coming to our customers’ sites. It’s a night and day difference. For example, Demandbase can expose to a customer that only 5-10% of their target audience is coming to their site in a given month—this is not very good! We likely can double those results in a month with our account-based advertising solution. Increased web activity is a great proxy for increased sales activity; however, we’re also tying into CRM systems so that customers can measure actual new sales activity as it relates to ad spend and marketing programs.
Our customers care more about lead quality than quantity, and really it’s the quality of the account that has been overlooked. We’re less focused on the title of the individual lead, and more focused on whether the interest comes from an account that’s a good fit. If you sold to enterprise accounts exclusively, would you rather have a lead who is a C-level at a small company you already know will never buy anything, or a manager at Wells Fargo? I know sales people would take the Wells Fargo lead any day, because they know they can navigate to the right people.
Is this just a Fortune 100 or Fortune 500 phenomenon, or is this notion of quality of traffic something that extends to the mid-market as well?
The Fortune 500 is just an example business segment. We can identify people from millions of businesses around the world as they search the web or visit your web site.. So for customers like GE Power, who are only going after utility companies. It could be an industry orientation, company size, or any combination of “types.” Sometimes our customers may have 4 or 5 different audiences, and they may be doing very well attracting one audience but not the others. Demandbase can show marketing and advertising teams exactly what they need to go fix.
Are people typically using Demandbase to do everything—advertising, website personalization, and tie ins to marketing automation, or are they using discrete capabilities of Demandbase?
People are adopting our platform for the whole experience, meaning they don’t just use our advertising capability. In fact, only 2% of our customers just do advertising. It’s really the combination most customers are interested in, versus a point solution. They want to advertise a message across the web that is consistent with the message on their website and then measure the increase in engagement and sales activity by account. This is what account-based marketing is all about. We are the only company that can do all of those things together.
So who do you see as your competition?
For website personalization, the only company we see, although not often, is Marketo, with the acquisition of Insightera. But we generally target mid-market/large enterprises, and Insightera is more of an SMB product. On the eCommerce side there is a personalization product called Monetate, but it’s a more B2C-oriented solution.
On the advertising side, we were the first to offer an account-based system. Bizo (now LinkedIn marketing) is a competitor, but their measurement of success is a click-through rate (CTR). They’re not able to measure web activity (engagement and conversion) and sales activity all tied together. Based on our feature set, we just don’t see very much competition.
Is your Salesforce integration available today?
We recently announced a product called Sales Accelerator. It pushes information about an account and their activity on the website right into the account object in Salesforce. We give users the ability to configure actions and sales tasks around that, like chatter feeds or an email alerts. It’s super powerful, turning advertising investment into sales activity bypassing the allusive whitepaper download.
If sales is waiting for website visitors to fill out a form in order to get a lead, they miss out on 50x the opportunity. So Demandbase identifies accounts associated with all of those visitors who didn’t fill in a form. For example, when we show a customer that 14 people from a certain company were on their site, and here are the top pages they visited, the sales team knows who to call at that company. We can’t show exactly who the visitors were, because they didn’t fill out a form, but they can easily go into LinkedIn or their CRM and find the right points of contact. If sales can see where there’s a need and an interest, it becomes very easy to make a timely phone call.
How do sales and marketing teams absorb this kind of intelligence?
From a marketer’s standpoint, they consume account data from within their analytics tool—whether that’s Google or Adobe. We also have a dashboard they can use. Sales people live in Salesforce, so we push the information into that system. It manifests as an alert, and right within the Salesforce account object reps can see how the traffic is trending and get a quick snapshot of which pages that account reviewed. We also have trend lines and summary reports that look at all of their accounts together. Users can sort accounts by most active. There are a lot of different opportunities with that.
Are you helping your customers understand the efficiency of ad spend as well?
Through ABM, we have introduced a new way to buy and scale advertising. The notion of a CPM is somewhat meaningless in a B2B model. In B2C, you’re trying to reach mass audiences and can measure transactions in a shopping cart model. B2B is very different. There is a longer sales cycle, multiple people are involved, and purchases are seldom done online.
We’ve introduced a subscription model where you might spend a hundred dollars per month to advertise to a particular company. If you have a sales cycle that’s three months long, and you’re selling to an enterprise company like Cisco, $300 dollars to advertise to them during the sales process is a fraction of the total cost of sale. So not only is it much easier to digest, the attribution makes total sense. If I told you it was an expensive CPM, you might say “No way.” But when I tell you it’s $300 to build the awareness and influence across an organization while your sales person is in an expensive sales cycle which could be tens of thousands of dollars, $300 becomes a no-brainer.
We’re trying to get customers to think about “always on” advertising. For example, a Demandbase customer might sign up for advertising to 500 companies every month for the year. Target companies will come on and off the list, depending on who’s in the pipeline and who’s up for renewal, and there might be companies that always stay front and center because they’re big customers.
Are you a media buyer for customers or a pure software platform to enable them to do it themselves?
We are buying the media on their behalf, but we are not in the business of marking up media. While media is a cost for us, the secret sauce is our technology which optimizes our real-time bidding against site engagement and sales activity. Bottom line is that you can’t measure B2B marketing success based on a click. We essentially built our own B2B DSP, and it’s now plugged into hundreds of exchanges. So let’s say you wanted to market your company to the Fortune 1000 and bought an ad on Forbes.com. While that is a high performing property and you might reach some of the target audience, 90% of your spend might be going toward non-Fortune 100 accounts. Demandbase’s technology enables you to serve your ad to the F1000 on Forbes.com and use the other 90% of your budget to reach the F1000 across other B2B properties with essentially zero waste. The measure of success is not a click-through rate; it’s whether you got the companies to the right pages on your site, and whether it is turning into sales activity.
Can you close the loop and correlate Demandbase campaigns with engagement results over a time period?
We look at a measurement called lift—essentially, did we increase the account’s activity on the customer’s site prior to the campaign (as a baseline)? Our customers also get the attention of new companies, as well as increasing the activity of their targets.
With our Sales Accelerator product we’re now pulling in pipeline data and lining it up to advertising data and web site engagement. Back to data, it is the proprietary data assets we built that makes this possible; it’s the underpinning that joins all of these results. So with Sales Accelerator I can look at how much I spend on advertising, website activity, and all of the leads pipeline revenue for a specific account. ABM is based on tying those three things together at the account level. Every web interaction has an IP address, but only a fraction of web visitors are cookied. And what most people don’t appreciate is that CRM systems are architected based on accounts, not cookies. So we are in a very unique position to join all these measurements together. That’s why customers get really excited about Demandbase.
Where is the industry in terms of its maturity with ABM?
Absolutely in the first innings—it feels like where marketing automation was five years ago in terms of category creation. People and analyst firms are just starting to talk about ABM as the next big thing. Certainly high tech was an early adopter, but now we’re seeing adoption by large banks, insurance, manufacturing, etc. GE is an exciting account because they expanding with Demandbase across all of their BUs. These are very, very different business units, but we’re solving the same fundamental problem for all of them.
Are companies who’ve historically been using you for personalization and web site analytics starting to utilize the advertising capabilities as well?
Our net dollar retention exceeds 120%. In the SaaS world, this is best in class and basically means people are expanding and growing their use of Demandbase much faster than any churn. It underscores a high level of customer satisfaction.
What is it that sets you apart in the market?
The key things that differentiates us are that we’re a full funnel B2B marketing platform—tying together advertising, marketing tech and CRM technologies to power ABM—and that we’ve made an on-going investment in a data model that is becoming an industry standard. Coordinating marketing and advertising has been a real challenge for companies who rely on a variety of different solutions, because they can’t pull all of the data together.
We are investing heavily in account-based information, which will fuel ABM and make it more effective for our customers. We’ve built a better industry/sub-industry taxonomy than SIC code, added uniform company naming conventions, B2C/B2B flags, modeled revenue, and allow customers to attach their own private 1st party data which can be returned to CMS and marketing automation systems in real time. While we will work with traditional data sources, there isn’t one out there that’s sufficient for what we need to accomplish. We have created a gold standard for the companies our customers want to sell to—not the universe of companies that will never buy their products.
What’s next for Demandbase?
New innovations are the priority for us as we continue the integration of WhoToo’s products and data into our architecture. We’re also developing more automation across the different products, essentially having them talk to each other. Imagine this: a sales rep adds a company to the pipeline, that account then automatically receives advertising across the web during the sales cycle. These configurations are quite easy with a common data model, but quite powerful for our customers. In the future, we will be looking at applications of our technology across search, social and mobile to make them more effective for B2B. The $35 billion B2B marketing sector has been underserved for so many years and we are the positioned to transform this market
Vinay is an entrepreneur passionate about tackling big problems. Vinay conceived TrustRadius after experiencing challenges when buying enterprise solutions at his last company. In 1999, Vinay founded Convio, the leading Software as a Services platform for nonprofits. In April 2010, Convio became a public company, and was acquired in May 2012 for $325 million. Prior to Convio, Vinay was a Director at Trilogy Software and a Consultant at Bain & Company. He holds an MBA from Harvard Business School where he graduated as a Baker Scholar, an MS Engineering Economic Systems from Stanford University, and a MA Engineering Information Sciences from Cambridge University with First Class Honors. When he’s not working, Vinay loves spending time with his family, playing squash and racing cars.