2. MarTech and the Decade of the CMO
Technology has transformed marketing into a technical discipline as
much as a creative one. The number of marketing technology startups
has increased from 150 in 2011 to nearly 4,000 in early 2016. And we
expect technology spend by CMOs to increase 10x in 10 years, from $12
billion to $120 billion. It’s an amazing time to be a marketer.
But with the landscape changing as quickly and dramatically as it
has, it’s also a challenging moment. Which is why, one year ago, we
published MarTech and the Decade of the CMO, a whitepaper that was
written with the aim of helping marketers to navigate the complex
terrain that is marketing today.
In the paper, we enumerated the 5 Keys to the Decade of the CMO
—organizing principles to help marketers identify the technology that
will be paramount to solving their business objectives. I stand by each
of those 5 keys; but, had I written that framework today, I would have
added a 6th key: video. Because today it’s the digital video revolution
that will be the next defining moment in the decade of the CMO.
Introducingthe6thKeyto
theDecadeoftheCMO
2011
150
350
1,000
2,000
4,000
2012 2014 2015 2016
Key1: AllHailKingROI
Key2: HireMathMen,NotMadMen
Key3: PublishorPerish
Key4: MassPersonalizationIsNotanOxymoron
Key5: ClosetheDeal
Key6: TheRevolutionWillNotBeTelevised
6KeystoUnlockingtheDecadeoftheCMO
Today’sMarTechExplosion
# of Marketing Technology Startups
Source: chiefmartech.com
foundationcapital.com/decadeofthecmo
2
3. MarTech and the Decade of the CMO:
The 6th Key
3MarTech and the Decade of the CMO
TheRevolution
WillNotBeTelevised
It will be streamed, snapped, tweeted, and projected in virtual reality.
4. MarTech and the Decade of the CMO
The revolution will not be televised.
It will be streamed, snapped, tweeted, and projected in virtual reality.
Netflix, Hulu, Periscope, YouTube, Snapchat, Facebook Live, Twitch, Amazon, Vive, Vessel, The
Screening Room—the list of new video platforms goes on and on. TV isn’t dead yet, but as
people increasingly turn their eyes to other screens and modalities, video will engage a new
generation of consumers.
For today’s teenagers, watching video on their mobile phones is the norm. Nielsen reports that
the amount of time Americans 18- to 24-years-old watch traditional TV has gone down by 38%
in the past five years. And in the case of Generation Z (those born in 1995 or later), 70% prefer
streaming over broadcast or cable. It’s no wonder that eMarketer predicts that by 2020, digital
will account for almost 40% of total video consumption in the US. Not that anyone should be
surprised; this “overnight” trend has been 15 years in the making, getting its start when DVR
popularized the time shifting of programs. And today’s revolution is moving so quickly, you can
expect Generation Z to adopt VR as ubiquitously as millennials took to their mobile devices. Over
the next 10 years, VR headsets will be as widespread as smartphones are today, further blurring
the line between our physical and digital worlds.
Of course, it’s no longer just a question of when viewers watch but also how and where. The
rapid proliferation of video platforms—including the emergence of virtual reality—means that
brands have a host of new, more engaging ways to connect with their customers. But it also
means that marketing is going to get exponentially more complex and that there is a huge
opportunity for startups to write the rules of this new world order.
1975 1980 1985 1990 1995 2000 2005 2010 2015
VCR
Cable
AOL
DBSSatellite
Yahoo
Google
Broadband
HDTV
VOD
AppleTV
Smartphone
Roku
AmazonPrime
InstantVideo
DVR
HDDVD&Blu-ray
SatelliteRadio
Time-ShiftedViewing
Facebook
7thGenGameConsole
Twitter
YouTube
NetflixStreaming
8thGenGameConsole
Chromecast
HBONow
Ad-freeHulu
SamsungGearVR
GoogleDaydreamVR
HTCVive
OculusRift
AppleTV4th
Gen
PlayStationVR
StreamingRadio
GoogleCardboard
Instagram
Hulu+
SmartTV
Tablet
ChoiceIsExploding
The rapid proliferation of
video platforms—including
the emergence of virtual
reality—means that brands
have a host of new, more
engaging ways to connect
with their customers. But it
also means that marketing
is going to get exponentially
more complex and that there
is a huge opportunity for
startups to write the rules of
this new world order.
4
5. MarTech and the Decade of the CMO
54%
$28b
2015 2020
28%
18%
49%
40%
11%
$62b
10.0
0
20.0
30.0
40.0
50.0
60.0
70.0
Ad-Supported
Subscription
Transaction
105
538
134
522
165
514
197
499
223
486
258
469
285
458
2014
0
100
200
300
400
500
600
700
800
0
10%
5%
15%
20%
25%
30%
35%
40%
45%
2015 2016 2017 2018 2019 2020
Traditional TV Total Streaming Streaming % of Total
OvertheTopDigitalVideoRevenue
Doublesby2020
(BillionDollars)
USDigitalVideoasPercent
of TotalVideoConsumption
(BillionHours)
Source: Informa, Marketsandmarkets.com
Source: eMarketer and Wall Street Research
5
6. MarTech and the Decade of the CMO
Gen Z Millennials Gen X Boomers
13.2
14.8
24.1
19.7
GenerationZandtheNewDefinitionofTuningIn
Generation Z shows a love for video and a growing indifference to the big box and remote.
Generation Z as Culture Consumers
(Gen Z = those born in 1995 or later)
Weekly TV Usage by Generation
(in Hours)
In an era of emoji and six-second Vine
videos, we tell our advertising partners
that if they don’t communicate in five
words and a big picture, they will not
reach this generation [Z].
“
DanSchawbel,
MillennialBranding,asseenintheNewYorkTimes
90%
Watch YouTube daily. Are on social
media daily.
Prefer streaming over
broadcast or cable.
Are multitasking
while watching.
80% 70% 77%
Source: Wildness
Source: US data, VisionCritical
in Q4 2015 were among those
over50yrsold.
All gains in live and
time-shifted linear TV viewing
!
Source: Nielsen, nscreenmedia.com
6
7. MarTech and the Decade of the CMO
In Nirvana:
In this new environment, CMOs will be responsible for the
development of cross-platform, data-driven video strategies that
blur the line between content and advertising.
Scalable, personalized video content will be ever present.
Imagine video and VR content (instead of ads) that is so sleekly
produced viewers will want to stop and watch; when they do,
they’ll find the content nearly as engaging as the programming
they love. And robust ad buying platforms will make it possible
for brands to distribute this marketing content across a
fragmented and siloed landscape.
Brands will also have a comprehensive understanding of their
customer behaviors both online and offline, fueled by data from
sources such as payment platforms, wearables, mobile, and
Internet of Things devices.
59millionadults
intheUS
in 2015.
watched original digital video
at least once a month
!
Source: 2015 IAB Original Digital Video Study
Imagine video and VR content
(instead of ads) that is so sleekly
produced viewers will want to
stop and watch; when they do,
they’ll find the content nearly as
engaging as the programming
they love. And robust ad buying
platforms will make it possible for
brands to distribute this marketing
content across a fragmented and
siloed landscape.
7
8. MarTech and the Decade of the CMO
Challenges on the Path to Nirvana:
Consumers have an array of platforms to choose from, with more and more sure to emerge in the coming years.
Many of these outlets are already on-demand, subscription driven, and ad free—which creates the necessity for new,
innovative brand marketing solutions.
New Models of Content Creation
As the number of platforms customers engage with (social, digital, VR, etc.) continues to increase, brands will need new models of content creation.
Unfortunately, the scale of content required is immense, and there are not enough people with the skills to make it possible. Just as marketing has become
a technical discipline, a new breed of technical content creators will soon emerge. Tomorrow’s content creator will have a skillset that blends digital design,
filmmaking, game development (for VR), and data science to enable the rapid creation and optimization of interactive branded video and VR content across
multiple platforms.
In addition, the cost of creating video content is enormous—and the cost of creating VR content even more so. Before brands can fully commit to a unified
video content strategy, they will need new tools and talent that allow them to create personalized content at scale across a wide range of devices. And today
this feels like a long ways off, as perfecting every aspect of content creation, from engaging mobile experiences to captivating Instagram photography and
clever Snapchat streams, requires expertise across completely unique creative pursuits—all at once.
than each of the major broadcast
networks within a year.
If Netflix were a Nielsen-rated TV network,
itwouldattainalarger
24-houraudience
!
Source: Verizon Millennials & Entertainment Report 2014
>
8
9. MarTech and the Decade of the CMO
Challenges on the Path to Nirvana:
Seamless, Centralized Distribution Required
Once the content challenge is solved, marketers will also require easy ways of
distributing that content to reach customers at every step of their individual
paths to purchase.
Today, each platform is a silo. There is no easy way for a brand to approach
NBC and purchase ad space for The Voice across linear TV, NBC.com, Facebook,
Instagram, Twitter, and YouTube at the same time. As of now, the process must
be done manually, making it both expensive and inefficient. To ensure brands
are reaching customers in different ways and continually reinforcing their brand
message, solutions are needed to enable programmatic ad buying at a level of
scale and real-time optimization that is not possible today.
Tracking the Path to Purchase
Over the course of a one-minute video, it’s almost impossible to know what may
have triggered a customer purchase. Was it an impactful image? A line in the
script? Or maybe a viewer saw something that triggered a fond memory and
created a positive association with a product.
In order to hone their video/VR content strategy, brands will need attribution
solutions that help them better understand this customer behavior. For
attribution to be actionable, brands need comprehensive, cross-channel profiles
of their customers. Today, this profile is largely incomplete because online
consumer behavior isn’t always accessible to marketers, and offline activity isn’t
tied to a unified, accurate profile of a customer.
As brands aim to increase the amount of data about their customers they
capture and utilize, in order to avoid the Orwellian moniker, it will become
crucial that they communicate and address user concerns over privacy and data
security every step of the way.
none of the 4 major broadcast
networks are among their
top10brands.
For millennials,
!
Source: Verizon Millennials & Entertainment Report 2014
The struggle for today’s marketers is real.
Planning, buying, and measuring advertising
effectively across the developing silos of video
content—and tying together linear, digital, OTT,
and social platforms—is an immensely complex
challenge and will be so for at least the next
3–5 years. The MarTech industry needs to rise
to this challenge and help marketers realize
their cross-screen dream.
“
BrettWilson,
CEO/FounderTubeMogul
9
10. 10MarTech and the Decade of the CMO
Distribution
UGCIntelligence Linear TV Over the Top Social
Creation
Infrastructure
Marketing Consumer
Exchange
Advertising
Buy Sell
Aside from traditional TV commercials, video-focused marketing is still too new to be referred to as “established.” The entire
industry is still emerging. In the future, we expect to see new technologies that support video marketers in the following ways:
content creation, distribution (including programmatic ad buying), and optimization.
Linear TV is dying. Long live video. And for those companies willing to take the lead, the coming era offers dazzling opportunity.
Today’s MarTech Video Landscape
Non-Comprehensive
