MarTech and the Decade of the CMO

MarTechandthe
Decadeofthe CMO
How the Software Revolution will
Grow 10X in 10 Years
By Ashu Garg
General Partner, Foundation Capital
www.foundationcapital.com

Contents
Introduction: MarTechandtheDecadeoftheCMO 03
PartI: MarketingisNowaTechnicalDiscipline 05
PartII: BuyerBehavior:TheTimesTheyhaveAlreadyChanged 09
PartIII: 10xin10Years 18
PartIV: 5KeystoUnlockingtheDecadeoftheCMO 21
The Decade of the CMO
2

Introduction
Even as the rise of new media allowed CMOs
to change the way they got the job done, the
basic sequence still remained the same.
Hire a digital agency. Launch a digital
campaign. Rinse. And repeat. This is no longer
how marketing works.
Consumers are now in
control. Brands need to
stop interrupting and
instead have an ongoing
conversation.
Today’s forward-thinking marketers seek the
ability to do several things that, previously,
were either outright impossible or exceedingly
expensive and labor-intensive.
Marketing executives want to understand
the ROI of every dollar spent. They want
to cultivate a unique relationship with each
individual customer. They want to go beyond
bringing in sales leads – they want to close
the deal. And they may prefer to do all this
without relying on traditional agencies.
More than anything else, I believe technology
will make each of these aspirations more and
more achievable.
In the process, it’s elevating the role of
the CMO, changing the role of agencies,
and threatening to leave behind brands
and executives that find themselves either
unwilling or unable to embrace this
new reality.
For decades, marketing has been a repetitive exercise.
Hire an agency. Launch a campaign. Rinse. And repeat.
The Decade of the CMO 3
!
Brands around the world
spent more than
of which technology comprised
about 1% and advertising
comprised about 50%.
$1trillion
onmarketing
in2014,
Source: Scott Brinker, chiefmartec.com

We expect technology spend by CMOs to increase
10x in10Years
from$12billionto $120billion,
unlocking a huge opportunity for marketing
technology companies and opening the door
to the Decade of the CMO.
4
!

Part I:
Marketing
Technical
Discipline
IS NOW A
5

Expending resources, guesstimating
results, and hoping for the best –
that is marketing’s past.
Technology is giving CMOs the tools they
need to do more and do it more effectively –
whether they bring that capability in house or
hire an agency to manage it.
That includes buying media programmatically,
optimizing creative, placement, and audience,
re-targeting likely customers, and measuring
results in near-real time. Marketers should
view these not as campaign tactics but as
elements of a constantly evolving strategy.
As practitioners of this broadly applied,
increasingly powerful, highly technical version
of marketing, CMOs do not only look to
deliver the most creative advertising. They
look to deliver the best business results.
In the 1980s, tech vendors like SAP, Oracle,
and JD Edwards empowered CFOs to
better manage buyouts, outsourcing, and
increasingly global operations. In the 1990s,
with the rise of the information age, Siebel,
Scopus, and Vantiv helped sales VPs grow the
topline. And in the 2000s, Citrix, VMware, and
Symantec gave CIOs the ability to improve
efficiency by consolidating and improving the
core IT infrastructure.
In this decade, shifts in
CEO priorities will drive a
shift in power with CMOs
becoming CeOs, Chief
Experience Officers.
This continues a
trend, developed over
the past few decades,
where each successive
wave of technology has
disrupted a new line of
business and catapulted
its executive into an
expanded role.
1980s 1990s 2000s

Priorities
CEOs surveyed by Gartner singled out
three tech capabilities as their most
important near-term needs: digital
marketing, ecommerce, customer
experience management. Each often falls
under the purview of the CMO. Each is
the responsibility of the CMO and requires
new technology.
Budget
Marketers are commanding larger budgets
and spending larger portions of their
budgets on technology. CEOs already
give the CMO and CIO relatively equal
importance in driving digital initiatives.
That will likely change by 2017, when
Gartner estimates that CMOs will begin
to spend more on technology than their
CIO counterparts.
Power
Marketing is already gaining significant
influence within the C-suite. Many marketers
have already assumed the title and/or
responsibilities of the CeO, chief experience
officer. Those that do are becoming
indispensable to the CEO and are on a path
to becoming CEOs themselves.
A Korn/Ferry survey of CEOs found that 53%
believed their current CMO could one day
replace them.
From CEO survey, “Which 3 technology enabled capabilities
will be the most important areas of investment to improve
your business over the next 5 years?.”
0
5
10
15
20
25
30
35
40
Enterprise
Mobility
Big Data + Data
Science
Cloud
Business
Business
Analytics
Customer
Experience
Mgmt
E-CommerceDigital
Marketing
38% 34% 34% 32% 27% 24% 23%
Source: Gartner, N=410
CIO’sView
BU LeadsCIO CMO
17% 12%46%
CEO’sView
CTOCFO CDO Innovation Sales
CIO CMO BU Leads
15% 10% 9%
The CIO Must Lead the Digital Charge;
but the CEO Sees It as More of Team Game
Please allocate 100 leadership points to show how you anticipate
your CEO will distribute relative responsibility for leading digital
innovation and change over the next 2 years
3 Shifts:
7

Technology today is both friend
and foe for the CMO. The shift
from art to science requires CMOs
to reinvent themselves and their
organizations or become irrelevant.
The CMO of tomorrow is the data
nerd of today.
Doug Milliken, Clorox,
VP of Global Brand Development
Marketing is
a technical
discipline now.
We have to
re-frame things
we have been
doing for 100
years.
“
C A S E S T U D Y:
Unilever’s New Do
The difference between a dated marketing approach
and a dated hairstyle is that the hairstyle has a good
chance of regaining its popularity. That’s why Unilever’s
marketing SVP Marc Mathieu constantly looks for ways
to stay ahead of the MarTech trends. As he put it, “We
need to stop thinking about digital marketing and think
more about marketing in a digital world.”
Unilever recently launched its YouTube channel, All
Things Hair, after partnering with Google to capture and
analyze the data of the billions of hair-related searches
performed by consumers every day, allowing the
company to accurately identify rising trends. Mathieu’s
team then collaborated with hairstyle bloggers and
online personalities to build an audience – leading the
conversation about how to achieve the latest look while
illustrating how Unilever brands help consumers do
just that.
Even as marketing becomes a technical discipline, data
doesn’t have to be the enemy of creative.
Mathieu calls data “a source of
relevance, of differentiation, of the
ability, basically, to contextualize and
personalize content to every single
individual need and situation.”
And when it comes to the creative use of technology, All
Things Hair is showing that style and substance not only
go hand in hand – today’s marketers need to rely on both.
Canadian Tire:
Rolling with ROI
The way Frederick Lecoq sees it, the wheels of progress
won’t turn themselves. The marketing SVP at retail giant
Canadian Tire’s FGL Sports division put it this way:
“Marketing is now held accountable for driving business
results.” In their drive to improve ROI, Lecoq’s team
has gone to great lengths to measure their adoption of
marketing technologies.
One experiment conducted by FGL’s Sport Chek brand
discovered that the right mix between print and digital
advertising was actually 100 percent digital. They
started by replacing 25% of their print fliers, and, instead
of seeing the usual 5% sales boost, they recorded a jump
of 12%. After repeating the experiment six times, the
brand has engaged into a journey to convert its print
flyers program into all-digital leveraging a behavioural
/ reach / performance blend. In another experiment,
this time on Facebook, the team pushed a sample of 50
products using a six-second auto-play video. They then
compared the sales with a control group of fifty products
that didn’t get a video and found that the video-boosted
products achieved 50% more sell -through.
These ROI improvements are an
important byproduct of the shifts
Lecoq has led to develop his team’s
digital skillsets, Tech infrastructure,
marketing software, and – most
important – Capability and Culture.
“Digital is everywhere,” he said. “Nobody owns it. It’s
just the way we all work today, and everybody should be
involved in the transformation.”

Part II:
Buyer
Behavior:
TheTimes
theyhavealreadychanged
9

From Few Media Voices
to Infinite Media Choices
Twenty years ago, Alex’s parents confined their media consumption to
watching TV, reading a newspaper, and listening to the radio. But Alex’s
world revolves around her mobile devices. She streams videos through
Netflix, discovers what’s new on Twitter, shares “stuff” on Snapchat, and
listens to music on Pandora.
TV as we used to know is on its way out.
Consumers are increasing the time they spend
with newer forms of media – time they used to
spend watching linear television.
We believe that by 2020,
more than 80% of media will be
consumed digitally.
We predict that consumers will spend more than
50% of their time consuming media (or 360+
minutes per day) on their mobile devices.
What does this mean for marketers? While
video is still the killer brand builder, the 30
second spot is dead. Marketing today has to be
mobile first and channel agnostic.
10

!
From Few Media Voices
to Inﬁnite Media Choices
(hours)
2
3
4
5
6
E-Commerce
2010 2011 2012 2013 2014
(hours)
0
2
4
6
8
E-Comme
2010 2015 2020
of people use at least
2 devices per day
60%
use 3 or more per day!
25%
72%
of young people say they can’t
leave their house without their
mobile phone
Mobile is so captivating that a
majority (60%) of young people
around the world would rather
give up TV than their mobiles.Young
people
ages 13-24
By 2020, time spent on mobile alone will be
greater than linear TV (projections to 2020)
Today, Linear TV is on its way out
and being replaced by digital
Digital
Linear TV
Mobile
Linear TV
11
Source: GfK, 2013; US; n=~2000 Source: “Coming of Age on Screens,” by Crowd DNA (study commissioned by
Facebook). Survey of 11,165 people online, age 13-24, across 13 markets, April-May 2014.
Source: eMarketer, 2014Source: eMarketer, 2014

From Dictation to Conversation
In the past, when Alex’s parents had a bad expreience with a given company, they could write to
the Better Business Bureau. But now Alex can tweet, blog, post on Facebook, and more. She has
an outsized voice in this conversation, and brands need to listen, or risk the protests.
Word of Mouth is one of the most
powerful determinants of consumer
preference in all of marketing. This has
not changed for hundreds of years.
What has changed?
• Reach: a single consumer can reach
an audience the size of network TV
• Speed: perceptions can shift in
an instant while brands scramble
to respond
• Channels: there are almost as many
ways to share their opinions as there
are channels on TV
• Trust: consumers seek out the
opinions of other consumers, and
value the Word Of Strangers (WOS)
over information from brands
The social software company Lithium
reported that a thousand or more
customers can generate as many as
a half million conversations about
a brand.
53% of customers
say they won’t buy
from a company they
don’t trust … 30%
will share negative
opinions online.”
Gone are the days of waiting six
months for your brand tracker data to
come. In an instant, CMOs can tap
into the consumer zeitgeist to
understand the opportunities and
threats to their brands.
Marketers who participate in the
conversation can harness the power
of advocates to create advantages,
differentiation, or even new brands.
“
12

WOM influences 50%
of purchase decisions.
1.
Social platforms deliver
serious WOMM results.9.
The Canon Forum accumulated over 5,100 registered
users and 2.8MM page views in its first 6 months.
BSkyB Community thread views are
in excess of 1.5 million per week.
75% of all new subscriptions for community-driven
UK-based CSP giffgaff are driven by WOMM.
The American Diabetes Association boosted
organic web traffic by 8x with trusted
user-generated community content.
Customers trust their
own stories—not your brand’s.3.
92% trust
recommendations from
friends and family
more than any other
form of advertising.
just 10% of consumers
say they trust brands today
–down from 17% last year.
Big Reasons for
Serious WOMM
Word-of-Mouth (WOM) is storytelling. Real customers telling real stories about their real
consumer experiences. Word-of-Mouth Marketing (WOMM) harnesses the power of WOM to
improve brand perception, reputation, and customer loyalty. Here’s why you should care:
!
Social media makes
WOMM hugely effective.8.
25%of search results for the
world’s top 20 largest brands are
links to user-generated content.
Lack of consumer trust is
bad news for brands.4.
will openly criticize
companies they
don’t trust.
will share negative
opinions online.
of consumers say
they won’t buy from
a company they
don’t trust.
53% 30% 56%
Most of what customers
share is good.6.
66% of brand mentions are positive.
Real customers telling real
stories is good news for brands.5.
of consumer
say customer
testimonials
are the most
effective content.
of consumers
are influenced
by friends’
social media
posts.
of consumers
view online
customer reviews
first when
considering
a brand.
89% 81% 70%
WOM scales like
nothing else.
2.
1,000+ customers
can generate up
to 1/2 million
conversations
about your brand
Superfans (highly trusted, credible
and influential brand and product experts)
have huge influence.
7.
Superfans
account for
10%
of WOMM.
Superfans generate
messages with
4x
greater impact on
purchase decisions.
Superfans generate
3-5x
more WOM
messages.
Lithium social software helps companies unlock the passion of their customers. Lithium powers amazing social customer experiences for more than 300 iconic brands including AT&T, BT, Best Buy, Indosat, Sephora, Skype and Telstra.
The 100% SaaS-based Lithium Social Customer Experience™ platform enables brands to build and engage vibrant customer communities to drive sales, reduce service costs, accelerate innovation and grow brand advocacy. For more
information, visit lithium.com, or connect with us on Twitter, Facebook and our own community– the Lithosphere. Lithium is privately held with corporate headquarters in San Francisco and offices across Europe, Asia and Australia.
9
13

From Right Brain
to Left and Right
Throughout history, brands have appealed to pride, fear,
or vanity, and consumers often took them at their word.
Alex’s mom used to make the decision to buy Clinique
because she believed their products would help her
appear more youthful. But Alex looks for factual and even
scientific evidence to back up that claim.
At the genesis, advertising was all about emotional appeal
and hyperbolic claims. 100 years ago, Guinness built its
franchise on the slogan “Guinness is Good for You.” Fast
forward to today, the consumer expects this claim to
be supported by data. As a result, many studies have
been conducted to verify the validity of Guinness’ claim,
including a study done by the University of Wisconsin
which concluded that Guinness reduces blood clotting.
Marketing is now like a bacon-wrapped date. Bacon is the
inspiration. Date is the evidence.
The best marketers will simultaneously
find ways to inform and inspire.
Creative success is no longer about the best new concept;
rather, it’s about conveying the right information in an
emotional wrapper.
14

From One Funnel to
Infinite Paths to Purchase
When they bought their used car ten years ago, Alex’s parents scanned newspapers,
hunted for the best deal and, ultimately, ended up at the dealer for a test drive. But
this year, Alex bought her used car online. Between her social network and internet
research, Alex got more than enough information to confirm she’d get a great car from
the online used-car marketplace, Beepi, which made a test drive unnecessary.
With the rise of social and mobile, the
path to purchase is no longer linear.
Consumers gather information from a
variety of sources, connecting with brands
at indiscriminate points along the way.
Consumers vacillate between passive and
active shopping. As passive shoppers,
they absorb messages over the course
of everyday interactions – for example, in
conversation with friends, by monitoring
social networks, or as part of staying
up to date on the news. But once they
purposefully seek information required to
make a purchase decision – like checking
prices online, visiting a store, or reading
reviews – they become active shoppers.
When consumers move
into an active shopping
state, they’ve already picked
their preferred brand. More
than 75% will buy from that
brand regardless of any new
information they acquire
while actively shopping.
What does this mean to the
purchase funnel?
Marketers need to engage consumers at
every step of their shopping journey. Being
“always on” everywhere is the new norm.
Source: Advertising Research Foundation
15

Roles of Social Media Percentage of people who share the following on
social media before sharing in person
A Photo of
Themselves
An Interesting
News Article
An Opinion
About an Issue
Source: comScore Survey Research,
Respondents using Social Media in the shopping proccess Source: Crowd DNA, a study commissioned by Facebook”
0% 5% 10% 15% 20% 25%
E-Commerce
Makes me feel like
I have the info
I need to make
the best decision
Fun to use
Was important
in my final purchase
decision
Changed my
opinion of a brand
Introduced me to
a brand or product I
didn't know about
Provided information
that helped me
decide what to buy
21%
18%
11%
22%
24%
6%
0
10
20
30
40
50
60
An Opinion About an IssueAn Interesting News ArticleA Photo of Themselves
From One Funnel to
Infinite Paths to Purchase
16
53%
36%
31%

The Before and After of
Buyer Behavior
!
From few media voices to
inﬁnite media choices
TV, radio, print, and
outdoor were among the
only options.
Only advertisers
broadcast messages;
curious or frustrated
consumers might call the
Better Business Bureau.
Advertisers had little
reason to abandon the
philosophy of emotional
appeal and bold claims.
CMOs could expect
customers to follow a
linear route from
exposure to conversion to
brand advocate.
Consumers are
abandoning rigid formats
like TV for more flexible,
newer forms of
(often mobile) media.
The ubiquity of social
media combined with the
longstanding power of
word-of-mouth has
opened a dialog between
consumers and brands.
Technology has made it
simple and easy for
consumers to gather
evidence and confirm that
they’ll get their money’s
worth – before they buy.
Buyers now create their
own paths to purchase
using a variety of on- and
offline channels to start,
stop, rejoin, and change
engagement levels.
CMOs will still look to
deliver killer video but
must become mobile-first
and channel agnostic.
CMOs have new
opportunities to monitor
and collect consumer
sentiment and act on it
immediately.
CMOs must find ways to
simultaneously inform
and inspire.
When “always on,
everywhere” is the new norm,
CMOs need to be present
whenever and wherever
customers are actively or
passively shopping.
From dictation to
conversation
From right brain to left
and right
From one funnel to inﬁnite
paths to purchase
Whatweusedto
takeforgranted…
...haschanged......forgood.
17

Part III:
10xin10years
18

Advertising: 48%
Marketing Services: 34%
Agency/Mkt BPO fees: 12%
Data Intelligence: 5%
Software/Tech 1%
To bring about 10x in 10 years, marketing technology will make CMOs an
offer too good to refuse: tools that leverage data to reduce complexity
and increase efficiency – all while achieving increased impact.
Not long ago, if Clinique wanted to reach 20 million 18-49 year old women, they would
buy a spot on Grey’s Anatomy to access the show’s audience. As a result, typical CMOs
spent only about 1 to 2 percent of their media budget on technology. They had some
software and data at their disposal, but it was mostly relegated to Microsoft Excel and
Nielsen surveys.
But today, Clinique can target 20 million 18-49 year old women across hundreds of
different shows using technology platforms like TubeMogul. In fact, they can segment
the audience, target each segment with different creative, and optimize performance
across creative and audience segments. When media is bought this way, technology
can command a dramatically larger share of budget while delivering much more value
to the business.
While the growth rate of overall marketing spend will remain unchanged, its
composition will change dramatically and technology will command a much larger
share of budget.
• Media: the value attributed to context, and therefore media, will decline. Super Bowl
ads will cost half as much in a decade
• Marketing Services: spend on services like offline direct mail will decline and other
services will get automated away
• Agency / Marketing BPO fees: agency fees will be flat to down. Marketing BPO could
be a growth area given the increasing complexity of marketing organizations
• Data / Intelligence: value attributed to data / intelligence will grow as marketers buy
audience instead of context
• Software / Tech: spend increases from 1% of marketing spend to 10% by 2025 as
software replaces media and human services
The disruptive changes in marketing spend offers unprecedented opportunities for
technology entrepreneurs.
Technology Currently
Comprises 1% of the Current
Marketing Spend
$1 trillion total
marketing spend
Source: GroupM, DMA/Winterberry/Acxiom/Teradata, IDC,
DemandTec, AdAge Data Center
1%
Software/Tech
19

10xin
10Years:MarTech Spending Growth ($ billion)
Source: Includes IDC, Magma Global, and Foundation Capital estimates
0
20
40
60
80
100
120
Changes in consumer behavior and the
unprecedented advances we are seeing in the
MarTech space today add up to a significant
shift in the mix of marketing spend from media
and marketing services to technology.
Technology is estimated to be 10% of the
$1.2 trillion total marketing spend in 2025.
Marketing technology (MarTech) companies
are looking at an opportunity well north of
$120billion
peryear.
1%
4%
10%
12 44 121
2015 2020 2025
Tech spend as % of
total marketing spend
$B
20

Part IV:
5Keys
Unlockingthe
DecadeoftheCMO
TO
21

Key 1
AllHailKingROI
Because the line between marketing spend and business return
has often been dotted, disjointed, and fuzzy, measuring return on
investment has long been at the top of every marketer’s wish list.
In recent years, CMOs have found themselves under increasing
scrutiny from CFOs to demonstrate marketing’s effectiveness
against the company’s financial performance, and technology is
making it more achievable.
22

C A S E S T U D Y:
To Neustar, it’s not science fiction.
It’s MarTech fact.
When a leading wireless carrier wanted to
understand the impact of its digital media spend
on offline sales and the relative ROI of various
digital channels, they turned to Neustar. Using
its Platform One solution (a technology available
to them as a result of its acquisition of Aggregate
Knowledge, a Foundation Capital portfolio
company), Neustar analyzed both the media
spend and offline sales data for the carrier.
The results were surprising.
When Neustar applied a multi-touch attribution
model rather than a traditional last-touch model,
it determined that search advertising did not
perform as expected. For example, the number
of conversions attributed to Google dropped by
33%, and the number of conversions attributed
to Amazon jumped by 26%. Meanwhile, Neustar
found that customers who saw an online ad had a
40% higher purchase rate, bought higher priced
plans, and had a substantially lower churn rate –
ultimately generating 18% more revenue.
UsingNeustar’sROImeasurementplatform
enabledthecarriertobetterlinkonlinemedia
spendtoofflinepurchasesandtobetterpredictthe
businessimpactoftheirmarketinginvestments.
In Nirvana:
CMOs will be able to predict the
business impact of their marketing
investments and confidently deliver
against those predictions. In the
same way that pilots rely on their
instruments to navigate amid any
weather, marketers will have their
own form of high-tech avionics
necessary to steer increasingly large
and complex operations.
In ROI “Nirvana”:
Marketers projections
will be predictably
predictable.
Challenges on the Path to Nirvana :
Marketers need technology to do the
following for them:
• Stitch together data from internal and
external, online and offline sources, across
devices and channels, to create a unified
customer identity.
• Develop multi-touch attribution systems
to not only identify last message delivered
prior to purchase – whether it was via the
internet (mobile or otherwise), app, or
social network – but also understand the
relative effectiveness of each touch made
along the path to purchase.
• Make predictions and recommend ways
to optimize marketing spend and strategy
(e.g. LTV) in near real time.
1. All Hail King ROI

0% 13% 26% 39% 52% 65%
Social media metrics
Revenue per customer
Marketing-influenced sales
Overall sales
Conversion rate/
new customers
Customer Experience
Marketing ROI 63%
58%
48%
45%
42%
42%
38%
Seven most important measures to
gauge marketing success
Percent of CMOs selecting success measurements
Source: IBM
Jerret West, Netflix,
Vice President of Marketing
John Wanamaker’s old quote is finally
both old and out of date.
“Half the money
I spend on
advertising is
wasted. The
trouble is I don’t
know which half.”
We have to look for
ways to combine
creativity and
technology with an
understanding of
how the business fits
into the overarching
customer experience.
We have to think and
act like CEOs.
“
X
24

MarTech Gurus Leading the Way to Nirvana:
Established Companies:
Facebook and Google are developing ROI measurement solutions that are tailored to their
platforms. However, CMOs also want solutions that are targeted across different platforms and
combine both paid, earned, and owned media.
Emerging Companies:
Innovative new companies are following suit with powerful new ROI measurement platforms
of their own. There are a host of other emerging players addressing different aspects of ROI
management, including analytics / dashboarding, data management, and attribution.
CIO: A Strategic Partnership
As the role of marketing becomes
increasingly technical, for CMOs to
succeed, they will have to partner with IT.
At the same time, IT has to change how
it operates in order to collaborate with
marketing teams. In the Harvard Business
Review, Scott Brinker predicted that the
role of Chief Marketing Technologist
would serve as a connective tissue
between marketing and IT.
The CMT will report to the CMO
and partner with IT, bringing to bear
technology expertise coupled with a
passion for marketing. The CMT will
set a technology vision for marketing,
champion digital initiatives, and act as a
change agent within marketing. She will
define technology priorities for marketing,
drive vendor selection, and ensure that
marketing staff has the right skills and
training. While she will typically select
SaaS solutions that require limited IT
involvement, she will work with IT to
ensure their support.
Analytics / Dashboarding Data Management Attribution
Non-comprehensive list

Key 2
HireMathMen,
notMadMen
For no good reason, media buying still works a lot like
the floor of a pre-internet stock exchange and deals
still get done over dinner and drinks. But as existing
technologies gain wider adoption, media buying is
starting to look a lot like stock buying.
26

Agencies: A New Relationship
InthedecadeoftheCMO,theroleand
businessmodelofagenciesarebeingredefined.
Asbrandsrecognizethestrategicvalueof
customerdataandtechnologyplatforms,they
increasinglywanttomaintaincontrolofdata
andtechnology.
Somebrands,maychoosetomanagemedia
buyinginternally,liketheydowithsearch,and
hireexpertisein-house,cuttingoutagencies
altogether.Othersaredemandingmorecontrol
andmaychoosetohandlemedia-buying
strategyinternallytomaintaincontrolof
thedataandtechnology,andcontractingout
theexecutionofmediabuyingtoagenciesor
consultants,orevenanarmyoffreelancers.
Inaddition,traditionalstrategyandIT
consultingfirmslikeAccentureandSapient,
nowseetheMarTechopportunityandare
addingtraditionalagencyfunctionsand
creatingnewservicelineslikecreativeasset
management.
Agenciesarerespondingbybuildingtechnology
skillsandexperimentingwithnewbusiness
models.Mostagencyholdingcompanieshave
builtoracquiredverylargedigitalsolution
providers.Forexample,throughits$3.7billion
acquisitionofSapient,Publicisacquiredboth
ITconsultingskillsaswellasSapientNitro,
asuccessfulnew-ageagency.Publicishas
alsoacquiredsoftwarevendorssuchasRun,
amobiledatamanagementcompany,and
Relevant24,acontentmarketingplatform.
Thelinesareblurringbetweenagenciesand
technologycompanies.Soon,itwillbetoughto
tellthedifference.
In Nirvana:
The new RFP in media buying will be
Really Fast Platforms. Instead of media
buyers taking weeks or months to buy
and sell media through an RFP process,
computers will do the buying and
selling on their own, in milliseconds
with greater efficacy.
Automated media buying, which Google
pioneered with AdWords, will enable
marketers to precisely target individual
users or finely defined segments and
gain visibility on where exactly dollars
are deployed. In addition, marketers will
easily be able to shift budgets from one
segment to another.
Programmatic Media
Buying is Not a Trend –
It’s a Takeover
Eventually, 100% of all print, radio, and
television advertising will be bought and
sold programmatically.
Today, less than 5 percent of advertising is bought
and sold programmatically. While this number
is growing more than 50 percent year over year,
there are a lot of challenges to overcome before
most of advertising can be bought this way.
Marketers will rely on technology companies to:
• Increase supply of media that can be bought
programmatically, especially offline media such as
linear TV, radio, and billboards.
• Enable advance purchase of media in addition to
spot buys.
• Give brands an understanding of where ads
appear, alongside what kind of content, and who
views them.
• Connect digital metrics like impressions to
traditional metrics like Gross Rating Points (GRP).
2. Hire Math Men, not Mad Men

Buy Side
MobileVideoSocial
Exchanges Sell Side
Players like Facebook, Google, and Twitter have each developed programmatic media buying
solutions largely to make it easier for marketers to buy their media. However, CMOs also want
cross-platform media buying solutions.
Emerging Companies:
A host of emerging companies, such as TubeMogul, AdRoll, and Nanigans, provide cross-platform
media-buying solutions. This ecosystem is well-developed with later stage startups beginning to
blur the lines between categories. Established players are also aggressively acquiring companies
in this space.
The traditional agency
is fundamentally broken
when we can crowd source
among filmmakers and get
20 ideas instead of one.
“
2. Hire Math Men, not Mad Men
GuyLongworth,SonyPlayStation,CMO

Key 3
PublishorPerish
Social and mobile has amplified the voice of consumers. As
a result, every business has to be in the content business.
Traditionally, brands created a few pieces of high quality content,
a.k.a. ads. Today, content creation permeates all of marketing
and the lines between content and advertising are blurring.
Marketers must provide useful and authentic content at a scale
that is several orders of magnitude beyond what they would have
created for traditional advertising.
29

In Nirvana:
CMOs will gain consumers’ trust
by providing relevant, authentic,
engaging content during the
right stage in a buyer’s non-linear
path to purchase – especially
before they move into an active
shopping phase.
• Create authentic content at scale, in a variety
of formats.
• Distribute across fragmented channels and
measure engagement.
• Identify, leverage, and nurture advocates, and
encourage them to deliver, through effective Word
of Mouth marketing, information consumers can
both trust and act on.
Authentic Content:
Boo the Dog
If there’s such thing as the Justin Bieber of dogs,
Boo is it. In a matter of years, the Pomeranian
rose from a page on Facebook to a social media
icon – with 17 million followers, a published book,
merchandise and the title Virgin America’s Official
Pet Liaison. Upon reflection, Boo’s owner (his
CMO) said Virgin chose Boo to introduce their
new service class “main canine select” in large
part because he built his following on authentic,
relatable content – without ever spending a dollar
on advertising to promote himself.
Unbranded Content:
Chipotle’s “Farmed and Dangerous” Web Series
One restaurant chain has created a Hulu web
comedy series where its message is prominent but
its brand name is not. A sustainable farmer, Chip
Randell, stands in for Chipotle, and the storyline
pits him against Buck Marshall of the Industrial
Food Image Bureau. CMO Mark Crumpacker
said, “Chipotle as a company is essentially trying
to change the way food is raised in this country…
there’s only so much one restaurant can do, so
we’re actually trying to change public opinion.”
According to Crumpacker, he’s been asked, “What
the hell are you doing? What is this unbranded
content? It is, I think, maybe the new frontier in
marketing. It’s storytelling at its heart.”
Unowned Content:
Influencer Marketing Model
Sometimes, less control is more powerful. To
create large amounts of content at scale and still
maintain ingenuity, many brands such as Coca-
Cola leverage social media influencers such as
Vine celebrities. Coca-Cola provides incentives
for these celebrities to create and distribute their
own content that mentions the Coca-Cola brand.
This crowd-sourcing model is not only powerful
but allows brands to reach targeted audiences with
unique messages that come from content creators
that these audiences already trust.
There’s No One “Right Way” to Do Content
3. Publish or Perish

Content Creation Workflow Management/AnalyticsContent Curation Advocate Management
While companies like Salesforce, Buddy Media, and Oracle have made initial forays into products
that manage their social media presence, brands need much more.
Emerging Companies:
There are a host of technology companies providing a variety of content marketing solutions. This
ecosystem is nascent with categories still being defined. Brands are very interested in building
content marketing platforms, but are still defining their own needs.
Given that the future of
marketing is data, IT, and
content, the definition
of creativity is going to
change.
“
3. Publish or Perish
Frederick Lecoq, Canadian Tire,
Senior Vice President Marketing

Key 4
MassPersonalizationis
NotanOxymoron
The year is 2054. Tom Cruise’s character in Minority Report cuts through a
mall, and advertisements begin changing in real time to send personalized
messages. Today’s consumers also expect a unique experience. Too often,
brands offer one-size-fits-all when they could instead use technology
to meet customers’ varying needs and desires in a cost-effective way –
decades ahead of Minority Report.
32

In Nirvana:
Marketers will have the ability to reach
infinite segments of one. Marketers will
be able to present the best choices in the
right context and at the right time across
devices – simplifying the experience,
rather than trying to provide as many
options as possible.
Instead of connecting
with a million people at
once, brands will connect
with one person – and do
it a million times over.
• Aggregate data across channels and devices in
real-time to gain a comprehensive view of
each individual customer – while protecting
customer privacy.
• Build predictive models that enable marketers
to predict consumer preferences at scale, cost-
effectively, and in real-time.
• Surface relevant content across all touch points
at optimal times with the goal of maximizing
customer lifetime value.
• Use location as a new way to increase the
relevance of marketing to the consumer – finally
delivering the right message at the right time but
re-defining what we mean by ‘right place’.
• Personalize offline experiences using a unified
customer profile
Marketing Teams:
It Starts with Education
With marketing becoming a technical
discipline, business schools are in the
middle of shifting their curriculum to
prepare their students to succeed not just
in marketing but in MarTech. In addition
to offering traditional classes on pricing
and promotions, business schools are
offering classes on data-driven marketing,
data mining, and computer programming.
Marketing programs are also becoming
more interdisciplinary in order to prepare
marketers to become Chief Experience
Officers (CeOs). In addition, more
graduates who have technical majors are
pursuing marketing careers.
4. Mass Personalization is Not an Oxymoron
As the role of data is amplified, the
marketer of tomorrow will live at the
intersection of statistics, computer
science and marketing. Business
schools, increasingly cognizant of this
confluence are responding by imparting
the technical skills, emphasizing the
practical implementation and
combining these with a healthy dose
of fundamental marketing savvy.
“
PradeepChintagunta,
JosephT.andBerniceS.Lewis
DistinguishedServiceProfessor
ofMarketing,UniversityofChicago
We look for technologists
and computer scientists
coming out of top schools.
What we’ve found is that,
increasingly, they are
looking to launch their
careers in MarTech.
“
KamakshiSivaramakrishnan,
DrawbridgeCEO

Amazon, for one, has developed a number of proprietary personalization solutions to
give its customers a unique experience each time they visit the online store, depending
on what they’ve shown interest in on and off the site.
Emerging Companies:
Personalization is an established category that is being reinvented by advances in data
science. Successful startups are driving the shift from lookalike to machine learning
based models and are moving from batch processing to real time optimization.
We want each
consumer that engages
with Men’s Wearhouse
to have a customized
experience – online as
well as offline
“
4. Mass Personalization is Not an Oxymoron
SusanNeal,Men’sWearhouse
B2C
MobileWebOnline/Offline
B2B

Key 5
ClosetheDeal
The marketing team used to pass the baton to the sales team to
close the deal. In this decade, sales will no longer be exclusively
the job of the sales. Marketing will not only generate demand but
also drive revenue and growth.
35

In Nirvana:
Marketers will drive revenue and
growth by connecting with the
right individual, making the right
recommendation, at the right time
and close the deal.
• Aggregate personally identifiable information across
channels to gain a comprehensive view of each
customer – while addressing privacy concerns.
• Predict the value of each potential sales lead.
• Surface relevant insights at the exact right time to
take action and help close the deal.
• Manage individual customer relationships at scale.
Data Governance:
A Marketer’s Greatest
Responsibility and Chief Risk
In 2014, corporations like Target,
JP Morgan, and Sony have all faced
significant consumer backlash due to
data leaks. As marketer roles expands to
include ecommerce and other technology
initiatives, they will collect more data and
face increasing risks of data leakage. In
addition, marketers are increasingly on the
hook for ensuring compliance with local
regulations in every geography that they
operate. However, the regulatory landscape
around data governance is evolving and
often ill-defined. Marketers therefore need
to make their own assessments on how to
handle data properly.
Belkin CMO Kieran Hannon offered an
example: “Some of our customers opted out
of email communication, but what if we
need to communicate something important
that is not promotional in nature? Do we
contact them or not?”
Consumer attitudes towards privacy are
evolving and companies need to learn
to walk the “fine line between cool and
creepy.” CMOs who learn to walk this
line will deliver a differentiated customer
experience and build an enduring brand.
This space is nascent with new categories yet to emerge.
Predictive Scoring Relationship Management
5. Closs the Deal

5 Keys
to UnlockingtheDecadeoftheCMO
!
Marketers will be able to accurately model
the business impact of their proposed
marketing investment.
Marketing teams will need to combine
disparate datasets, accurately attribute
touches, and optimize spend and strategy –
all at the speed of business.
Nirvana
Keys to Unlocking the
Decade of the CMO
All Hail King ROI
Instead of media buyers buying and selling media
through inefficient RFPs, computers will bring
efficiency and automation to the entire process.
Developers will need to find ways to enable the
advance purchase of media, make offline media
available for programmatic buying, and make
more data available to brands.
Hire Math Men, not Mad Men
Marketers will provide useful and authentic content
that connects brands with consumers — optimizing
message, timing, and placement.
Brands must distribute authentic content in a
variety of formats and across fragmented
channels, while measuring engagement and
nurturing WOM advocates.
Publish or Perish
Marketers will have the ability to efficiently reach
infinite segments of one – simplifying and
personalizing the experience for consumers.
Technology needs to deliver a comprehensive view
of each consumer, predict preferences, and leverage
contextual data – like current location or preferred
device – to effectively tailor each piece of marketing.
Mass Personalization is Not
an Oxymoron
Marketers will do more than generate demand.
They’ll add “sales” to their job descriptions and, in
the process, drive revenue and growth.
Software must bridge datasets to predict the
value of each potential sales lead, surface
relevant and timely insights, and help marketers
build revenue as well as relationships.
Close the Deal
Challenges
37

10x in 10 Years:
In 2014, consumers spent more time online than watching linear
TV. More than two thirds of the U.S. adult population has a smart
phone. By the end of 2015, there will be 2.5 billion smart phone
users around the world. Every day, millennials check their smart
phones 43 times and spend more than five hours on social media.
We are now past the digital inflection point.
“Change has never happened this fast before, and it will
never be this slow again” – Graeme Wood, journalist
and blogger regarding today’s advertising, media, and
marketing space.
For most marketers, both the pace of change and complexity of
the MarTech landscape is overwhelming. Every major software
vendor has a marketing cloud, and there are at least 2,000 MarTech
startups knocking on the door of CMOs, a figure that has doubled in
the last twelve months.
As a former marketer and now an investor, I created the five keys
framework to simplify the chaos. Like CIOs, CMOs must build
their own technology stack, combining offerings from emerging
companies with solutions from established players. For a CMO, the
Five Keys will provide a framework to organize and prioritize her
technology investments. For start-ups the Five Keys outline
clear opportunities to tap into – and take over – this $120 billion
dollar market.
Companies including Playstation, Unilever, and Clorox are blazing
the trail. The period we find ourselves in now reminds me of the
battle between our portfolio company, Netflix, and Blockbuster. At
its peak in 2002, Blockbuster was worth more than $5 billion. In
2010, it filed for bankruptcy. In order to avoid Blockbuster’s fate,
marketers need to define their technology roadmap and begin to
make the investments required to excel in this new digital age.
CMOs that embark upon this journey have the opportunity to
become CeOs owning the end-to-end customer experience. Those
that excel will go on to become CEOs.
A $120 Billion Market for MarTech
!
This shift will open up a
$120Bperyear
opportunity for marketing technology start-ups.

AshuGarg:
General Partner, Foundation Capital
Ashu Garg is a general partner at Foundation Capital, focusing
on startups in Marketing Technology (MarTech), Analytics, and
SaaS applications. He currently serves on the board of directors
of TubeMogul, Localytics, Conviva, ZeroStack, AdRise, FundsIndia.
com, IndiaHomes.com, and TreeHouse. Ashu was also closely
involved with Aggregate Knowledge (acquired by Neustar in 2013),
FreeWheel (acquired by Comcast in 2014), and SpotZot (acquired
by Vlassis in 2015).
Before joining Foundation Capital in 2008, Ashu was the General
Manager for Microsoft’s On-line Advertising business where he ran
Ad Ops and Yield Management; previously, he led Field Marketing
for Microsoft’s software business. Ashu also worked for McKinsey
& Company, Cadence Design Systems, and Unilever. Ashu founded
TringTring.com, a local search engine based in India.
Ashu has lived in India, Nigeria, the Sudan, and today makes his
home in California with his wife, Pooja (an entrepreneur in her own
right) and their two sons.
Find him on LinkedIn (linkedin.com/ashugargvc), and connect with
him on Twitter @ashugarg.
Current Foundation Capital MarTech portfolio
Exited Foundation Capital Martech companies
Bio

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