103 | The ABM evolution: MarTech's past, present, and future
48 min listen
AI, ABM and the future of marketing, there's not much we don't touch on in this episode!
We're joined by one of the brilliant brains behind Marketo - Jon Miller - now CMO of Demandbase. Jon takes us through his journey of founding Marketo, as well as sharing many more insights around:
- Balancing brand building and demand gen strategies
- How CMOs need to adapt to the changing B2B landscape
- Challenges and successes of merging teams and platforms.
- The impact of ABM and its transformation over the years
Tune in now:
View the full transcript here
Harry: Hello, and welcome to another episode of the tech marketing podcast. We're back here in London
Job Busby: and we're joined by Jon Miller, and you're also in London. What, how, how come you in London this week?
Jon Miller: I'm in town speaking at the ABM global marketing conference, which was just held
Job Busby: yesterday and doing some sightseeing as well, which is, which is something we get to do when when we get a little bit.
Well, more seasoned. But our listeners may not be aware of some of your fantastic backgrounds. Like you were one of the original founders of Marketo. And now you're obviously CMO at Demandbase. Like, what, what's that journey been, been for you? What, I'm curious to know, like, you've been one of the founding members of a piece of tech that all of us use as a B2B marketer on a daily basis.
Like, how did you, how did you end up being founder of Marketo?
Jon Miller: You know, I, I never thought I was gonna have a career in MarTech or even as a entrepreneur. I actually studied physics for my, for my undergraduate degree and I, I spent summers doing research at the Lawrence Livermore National Laboratory where they also do, like, nuclear bombs and stuff, and I had to get a, the Colvino top secret clearance to work there when I was in my, but working there, what I sort of realized was that the, the kind of the professional physicists, they weren't researching, you know, why does the universe exist in like these big, that had always fascinated me.
They were researching the, you know, things they could get funding for, you know, in my case, I was doing, you know, fusion research, which was fine, but it wasn't, I realized it wasn't my passion. And given that I was like, all right, well, what else is there in the world? You know, growing up, my, my mom was a teacher and my dad was a lawyer and we just never talked about business in my house.
Like it didn't even almost occur to me that that was a career that I didn't, I didn't know what that was, but in my senior year, I got to at least explore what the rest of this world looks like. And I defer, I got into a PhD program, I ended up deferring and I ended up getting a job at a management consulting firm.
Okay. And I think because I had the quantitative background, I got put on more analytical projects where people were using a lot of data. And what was interesting, this was 1994 and in 1993 a book came out by Don Peppers and Martha Rogers called the one to one future, which both caught my attention, but also I think the attention of a lot of marketers in the world.
The core idea of this book is that with all the data that was becoming available and all the processing power that was becoming available. Companies were going to be able to achieve a much more greater level of personalization than ever before. The analogy they used was the 1800s corner store. Where, you know, when you shopped then, you didn't go into a grocery and walk up and down the aisles.
You walked in and you handed them the list of what you needed. And then they gave it to you. And they knew who you were. And they knew that if you wrote eggs, that you actually meant two dozen because That's what you need. And you like brown eggs and not white eggs. And the idea was that we can achieve that level of personalization, but with industrial era scale with, with all the data.
So that fascinated me. Businesses were doing that. A lot of consulting projects ended up being around this kind of concept of data and analytics and all that. That ended taking me to a boutique firm that was called exchange partners that was specializing in this. The founder of that company had realized that the companies, the clients that we were consulting to couldn't always implement everything that we were recommending because literally the technology that they had didn't, it wasn't possible.
So he bought a kind of an older mainframe marketing platform and funded its conversion to a client server, which was. Pretty cutting edge for 1996. Mm-Hmm. and spun that business out. That business originally called exchange applications, but just became known as Exchange. Mm-Hmm. and ended up being probably the leading marketing tech platform of the late nineties Mm-Hmm.
Had an IPL mm-Hmm. . And so, so fast forward a couple years, I eventually decided to go to business school and got my MBA and it was, I was graduating in 1999, which is about the peak of the internet bubble. And, you know, I started to, oh, I'll just go back to consulting maybe, but everybody was going into tech because it was 1999.
And then there was this sort of startup just down the street from where I was going to school called Epiphany that had some buzz, kind of had gotten like some top tier VC funding and they wanted to, they started as an analytic solution, but they were going to build a marketing application that was going to compete against exchange.
And despite the fact I had zero experience in technology, never even thought I'd work in technology, I was able to get a job as the first product manager at this company because I had the loosest association back with this, like, competitive company. So, lo and behold, 1999, internet boom, I find myself working at a marketing technology company.
And, I mean, that was a great learning experience there. I was there for about six years. I was there for the IPO. And I was also there for the crash down the other side of when the internet bubble I'm just going to say this was pre
Job Busby: 2000, was, if you lived through that, you've, you know, come out to tell some better stories than we have.
Jon Miller: It was the hottest IPO of 1999. We had an 8 billion market cap at one point. Of course, I wasn't liquid. I couldn't sell anything yet. And then crash down, you know, the stock went from like 300 a share down to like 4 a share. Her, but learned lessons. We eventually sold epiphany in late 2005 and at which point to shocker my wife, I asked for the severance package as opposed to kind of stay on at the acquiring company.
'cause I was like, I don't, I don't wanna work there. So here I am. My wife's pregnant with her first child. We'd recently bought our first house, so we had a mortgage. Not exactly, you know, the most. Entrepreneurial kind of time in the world. And I was looking for a job. And I was sort of interviewing, at this point I thought I was senior enough, I could be the head of marketing at a startup.
So I was kind of interviewing at those kinds of companies. But I also started having some conversations with Phil Fernandez, who had been the president and chief operating officer of Epiphany. So my boss's boss. And... We realized that we sort of both saw an opportunity for a possible business that that opportunity was, we believed in marketing technology because we spent the last seven years building it.
But we also knew that marketing technology had never really taken off as a category and our hypothesis was because marketing is usually seen as a cost center. A lot of companies, but yeah. And back when technology was sold on premise, you know, like, here's your CV, go install it. You bought it up front. It was a capital investment of 250, 000 US to half a million or more.
And people don't tend to do capital investments into cost centers. And so there's, our theory was like, there's something that's making it hard for marketing technology to really get adopted. And yet Google had launched and people were spending money on Google AdWords at the time. Yep. So the idea that we had was, well, can we make powerful marketing technology, like we've done at Epiphany, but can we make it as easy to buy as buying Google AdWords?
And, software as a service was just sort of becoming semi mainstream. Yeah. You know, at this point.
Job Busby: Yeah, so Salesforce probably around that time started going out with their, like, sassy message, and...
Jon Miller: Yeah, that was like 2001, 2002, I think. And it hadn't caught on to MarTech yet. At the time, everybody thought the only way you could sell software as a service was if it was a seat based...
Yep. pricing. So sidebar, we had a hard time raising money for Marketo because investors didn't get... SaaS applied to marketing. And marketing had had a bad reputation, but we really believed that, that there was an unlock here. Mm-Hmm. , you know, if we could really make it as easy to buy and easy to own as Google AdWords.
So took that leap of faith, you know, despite the mortgage and the pregnant wife to start Marketo. And the fact I was doing with filth did feel risk reducing 'cause he was more experienced and he was able to put a little money into the business. Mm-Hmm. , you know, and so on. So we did it. And, you know, the interesting thing about being a marketer as a founder at a startup is usually that means you don't have anything to do in the early days, because when you're first starting a company, it's all about build the product.
You need engineers. There's nothing to market yet. So I actually helped with the product. That wasn't
Job Busby: were you joining as the marketer lead
Jon Miller: marketeer then? Co founder, but the role was Phil was the CEO. Yeah, I was the CMO Yep And we then after about five months we brought in a third person who we called a co founder as the CTO You know as a marketer at a start before we had a product I spend my time creating thought leadership so I I was blogging before we even write our first line of code Which meant by the time we actually launched a product, people knew who we were.
We actually had started to build a following. And you know, I mean, blogging doesn't sound so innovative sitting here in 2023. But back in 2006, creating quality thought leadership content was out of the ordinary. And people found it. And people, you know, were really attracted to it. So that was one of the things I think helped Marketo, you know, ultimately take off.
Was we really started to build a brand about speaking to the challenges that marketers had. Mhm. That was thought leadership, but we weren't I wasn't talking about the product. Mm hmm, right? I was talking about What marketers needed to know to kind of be successful? So that's that's kind of the story, you know into MarTech and starting Marketo You know Lots of things went right to make Marketo successful
Job Busby: I think I think what surprises me the most actually through I mean, so I also did chemistry as my main degree So I've landed in Probably didn't talk about my role, Jon, so I'm CTO at Together.
I often describe that as we are a tech marketing agency, so it's important that we understand your technology. So I spend a lot of time trying to understand a client's technology and how we're going to integrate that into a campaign. Because I think it's vitally important if we're talking about a security solution, or it can be any piece of tech, that we're trying to integrate that message deeply into what we're talking about.
And we can only do that through understanding technology. I actually did chemistry because I liked having an exact answer to things. And so when I look at marketing, I like seeing a KPI or a dashboard that shows that we're moving in that direction. But the most intriguing thing for me, you know, listening to that story, is the fact that It was actually the business model that was one of the big changes as you were starting.
It wasn't, it wasn't the platform itself, which everyone relies on. It was that change in business model. And I think We as marketeers often think about marketing just being brand or, you know, demand or whatever. We forget the five or seven or ten P's that there are. They're supposed to be if you, depending on which year you went to business school.
And that price and business model can be part of that, which I think is absolutely fascinating. When did you realize this was going to be a big thing? When was it where you were like, this jump made sense? Was there a, a, a defining moment you can point to?
Jon Miller: The first one is. You know, most people don't know this, but Marketo's first product was actually a tool to help with your pay per click bid optimization.
Mm hmm. And that product was, I would say, an okay, not great product. And that's a bad place to be, to be only okay. Especially when at the end of the day you're competing against Google. So we were kind of like selling in, I mean what was good about it is it gave us some operational maturity in terms of having customers and running customers.
Job Busby: How did you decide that was going to be the first product? Can you remember? Because obviously we know Marketo from marketing automation.
Jon Miller: Right, we sort of built out a a vision almost of like by channel. Right. So we're like, we're going to start with search. Then we'll add email. Then we'll add, you know, maybe something else.
It was kind of how we were originally thinking about it. We liked searches that, you know, again, back to the business model because the original pricing model was, you're just going to pay me 5 percent of what you spend again, just trying to make it as easy
to the product was okay, not great. But then we started building what originally was probably an email product. Mm hmm, right. But to really build a successful email product, we had to build out marketing automation capabilities. We thought, because there was a company at the time called Eloqua that was playing in the space.
So we sort of knew, okay, we needed to at least be able to functionally compete against that, even if just, just email. And as we started to build that one of the early hires we'd made at Marketo was a guy named Glenn Lipka, who was a user experience expert. He'd come from Intuit. And kind of, if you took kind of my experience with the product space, you know, plus Phil's and Phil and our CTO's technical experience, and then the third pillar of Glenn's kind of UI design, as we sort of built out this product, you know, with in mind all along is it's gotta be as easy to use as buying Google AdWords.
We started showing it to customers and people told us, like, this is something special. Right? You know, this is, this is as powerful as Eloqua, but I can just do what I want to do way faster, way easier. And Phil, it was Phil who made the decision to kill the pay per click product. You know, cause he's like, look, that's only okay, people are telling us this is great.
And at first I was like, why would you kill a product we spent a year building and developing? But he knew, he was like, this is special and we're going to really focus and invest our resources there.
Job Busby: And I think that has a lot of how do I put this, like a lot of similarities to what a lot of marketers are going through today.
The last 12 months have been the most disruptive I've seen personally in marketing for a long time.
Jon Miller: We're at a point where buying has changed, buyers have changed. We need, I think, a fairly fundamental rethink about how we do this. Which is, I would say, significant for me to be saying, right? Because, because we, the, the playbook that we sort of helped to craft back at Marketo, I think, has become the dominant B2B.
Marketing playbook, right? Create content ebooks, you know, put them behind forms. People fill out those forms so that you capture their leads. You score them. The good ones go straight to sales. The ones that aren't ready get nurtured. And you run that machine almost like a linear factory or baton pass.
Everything's highly measurable. You're tracking your cost per lead by source, you know, down to the nth degree. And that worked back in the Marketo days, but that that exact that's and I have some responsibility for creating that and preaching that and I'm now saying that that approach isn't working today and it's time for everything.
Job Busby: And that's, I think that's one of the most difficult, like stepping away. I would agree from the point we've heard from other CMOs and other clients, you know, we're now seeing this trend towards. I need to hire a project manager first and a marketeer second, because now they're having to deal with, you know, 10 different disciplines and solutions instead of just one.
Where, where we would've been before. But many people I think, struggle to look past the kind of next six months if they're looking at developing a, a, a new solution or a new go go to market. So what. Where have you seen brands be successful doing that and where have you, you know, and what advice would you, would you give someone looking at their go to market today?
Jon Miller: I don't, I don't want to underestimate the, the challenges here. I think that the, the change that actually is required is a fairly significant change that requires a level of leadership from CMOs that they haven't. Been asked to do before the, I think the, one of the biggest imbalances that I think we have going on today is that the, you know, Marketo playbook I just talked about, I think over rotates and over invests in demand capture and under invests in longterm brown building.
The six month window you just talked about is one of the factors that drives us
Job Busby: three months normally, right? Because it's Wall Street. We need to report quarterly results and that's not how B2B sales work either. So you've got these two conflicting priorities
Jon Miller: where you want it to be measurable. You want short termism and those things go against brand investment.
But I think there's two fundamental problems there. The first one is the fact that when your brand is strong, it makes Everything else you do better. I talked about the early days of Marketo, you know, and people thought we had amazing demand generation at Marketo. And we had really great metrics. I looked like a hero.
But that was, I think, largely driven by the fact that we had built a good, strong brand. When I first got to Demandbase, you know, I think there was a well known brand, but there were also some questions behind it. it. And you could see it just the exact same marketing tactics that worked so great at Marketo worked not as well because I didn't have a stronger brand, you know, behind it to support.
And so in a world where we're being asked to show really strong demand gen performance metrics, but we haven't invested in our brand, what we're going to see is just continually declining results, which is what we're seeing. The other reason why I think this is, you know, we need to invest in brand with a longer term focus is You know, there's a very small fraction of our target market that's actually Looking to buy a solution at any given moment in time.
Job Busby: Yeah, we often say 95 5 like 5
Jon Miller: Yeah, that's there's some research from the Ehrenberg Bass Institute that came up with that number. Yeah I mean,
Job Busby: I think we've had 3 percent recently. I've actually heard it goes higher 30 someone tried to try to persuade me. I've never heard it. Yeah. Which but needless to say, it's a small number.
Jon Miller: Right? Yeah. We talked about once or five, but you know, it's not a lot. And, and, and if we're focusing our energy on to demand capture, then we're fighting over the same 5 percent as our competitors, you know, back in the Marketo world, you could create thought leadership. You could create, I wrote definitive guides to whatever.
And I could market those to 95%. But that ship sailed. People are not downloading eBooks anymore. Mm-Hmm. . And, and you know, so we are returning to other demand gen or brand tactics like podcasts and whatnot. But point is like we need to kind of change how we're thinking. So, so the challenge back to you, what you said here is I think we need.
To reset how we're thinking about marketing investment, right? I think trying to say 100 percent of my investment is going to go to highly measurable demand programs is not working anymore. Maybe we need 60 percent in demand, 40 percent to brand
Job Busby: the, the, the, the, the staff that I love quoting whether we actually, we had this from a, the B2B Institute leader from Google stated.
that every dollar you try and save in brand at the moment it will cost you about 1. 85 to buy back later. Right? So, you know, that's, that's probably going the other way, which is if you get to the end of a quarter, and you want to start cutting down your brand investment, which we're always tempted to do it's gonna cost you more in the future.
And also, at the moment, considering media spend out there, you can get more bang for your buck if you invest in brand. So, completely agree. But would you say... And we often say kind of 50 50. I think the official status is 52 48
or for innovation or for something that could produce a 10x gain? Because we talk about brand a lot, but I think what's missing there is that alchemy piece. Whenever you go to market. Have you ever tried to carve anything out like that in your time? Marketo or Demandbase.
Jon Miller: I've always told my team that they should be willing to experiment and kind of try stuff.
And I think that can be both in demand, like hey, try new tactics and things like that, as well as on the brand side. You know, Marketo famously, we once created a coloring book that B2B influencers. You know, and that was just kind of fun and different and it stood out. So, yes, I think there's room for that.
I, I, I have never explicitly said, okay, it's going to be 50 demand 40 or brand 10 innovation. I just, but I think innovation should kind of sit through everything.
Job Busby: Yeah. And I think having a test to learn approaches is key. Yeah. I'd love to set up like an
Jon Miller: 1800s corner store. Again, like, I loved that in the beginning.
Job Busby: The thing is, I'd actually probably enjoy shopping in that compared to going to Supermarket.
Harry: I was 100 percent sitting in that.
Job Busby: So, but I suppose you'd have to have the old CDs with the software on. We've all got so used to having our groceries delivered here in the UK as well. I'm sure it's the same in the US.
Sort of back to that model. Yeah, we went, we made the mistake, I've got two young kids. We made the mistake of going, well, let's just go to the supermarket just once. We never like wander around the aisles. Never again am I doing that with two kids. So I would say the 18, the, the corner store comes back into it.
But yeah, it brings us back to demand based really. So what attracted you to demand based as a proposition? Like, you know, what, what made you go this, this could be the next Marketo?
Jon Miller: So after nine years at Marketo, I, you know, it started to feel, It was a big company. It started to feel like a job and not like my company.
Mm hmm, and I realized how much fun I'd had and how much I enjoyed that really early stage of like, this is my company and I'm building it. Mm hmm. So I had, I had that itch and I also knew that because of the Marketo success I would have the opportunity to be able to go be the CEO and start something new.
So I started in 2015 a company called Engageo. Mm hmm. At the time, you know, the sort of I talked a lot about how the Marketo style of marketing was like fishing with nets, you know, lots of fish and we're gonna run our campaign, see who we catch. But people had started to talk about account based marketing as a kind of a new tactic that was more like fishing with spears.
Go find that big fish and go after them. At Marketo, I had tried to do that kind of go to market also, you know, kind of layered it on. And I'd realized how hard that was to do with the Marketo Salesforce tech stack that I had. So I was like, okay, there's an opportunity to build a new platform that's going to support this kind of spear phishing approach.
And so left Marketo, started Engageio in the account based marketing space. And, you know, had some of the same tactics, create some thought leadership, created some buzz, some awareness. And built the product you know, and got to about 60 people, about 10 million of revenue. The interesting thing is, you know, obviously a lot of other people were in the ABM space.
Demand base had been in the ABM space. And even though we were both considered ABM platforms, we did almost nothing the same. In fact, our demand base was engage your customer for a while, right? Like we have our platform and we're going to use your platform. And we had customers that were using both platforms because there was, you know, they were very complimentary.
And yet the way the industry analysts work is they're all trying to figure out, well, what are the features you need to have a complete platform? So they look at demand base with ABC and they look at engage it with XYZ. So what do they say? Well, complete platform needs ABC XYZ, you know, and there were some other competitors that had emerged.
That had built, I would say, less good versions of ABC X, Y, Z. Right, but, you know, so the pressure was happening for Demandbase to build what Engageo had. That was literally their three year roadmap. I had pressure at Engageo to build what Demandbase had. That was my three year roadmap. And so, Gabe Rogal joined as the CEO, or became the CEO of Demandbase, and I knew him.
We got together and we sort of, like, I had enough of a trusted relationship to talk about these three year roadmaps. And we realized this thing just makes sense to kind of bring together. And so we, we did that deal and made it all happen in the spring of 2020, which is right when COVID was going on.
So I'd like to say that that deal happened despite COVID, not, not because I had to or anything like that because of COVID. So I joined Demandbase in June. of 2020, originally as the chief product officer and because they had a strong CMO and Peter Isaacson and I led the integration of the platforms.
Interestingly, it was a reverse integration, meaning the core of demand based today is Engagio. And then we integrated the demand based technology into that
Job Busby: as a, as a, I mean. Tech has gone through a lot of kind of M& A type activity, you know, you look at who Salesforce buy every year and try and integrate into their stack.
I'm intrigued, like how did you decide which was the core and how did you, how did you manage that kind of integration of both the product and the teams?
Jon Miller: Yep. The it was fairly obvious from both teams that Engagio would sort of be the core platform, mostly because All of the DemandBase's really great technology was, for lack of a better word, headless.
There weren't that many screens, right? Like, there's a really amazing DSP ad platform. That was really great at targeting the right people with the right accounts. But there's just not that much user interface to that. Similarly, their intent data. There's no UI for that. Their predictive analytics, no UI for that.
And, and yeah,
had lots of UI. Because Engagio was more like a marketing automation platform for ABM. You'd go in, you'd build lists and segments and create reports and send them to sales people. So it just kind of made sense. Integrating the teams. In retrospect, we probably smashed the teams together too fast.
There's a lot of best practices in M& A that you kind of let the acquired entity kind of operate semi standalone for a little while, just to get everybody used to the situation. We didn't do that. They won, everybody had new bosses, and we lost some good people, to be honest, I think, because of that. So, but we merged the platforms together in record time.
Nobody, I mean, normally you hear about... These kind of integrations take a long time, but it was, it was priority number one, the whole company focused on it. We released the integrated platform five months later. Truly integrated.
Job Busby: I mean, that, I mean, Salesforce, I think, is still trying to integrate Pardot and everything.
Like, it still feels like four different platforms whenever you go in and do anything between.
Jon Miller: But that was part of the heroism of what DemandBase did, saying we're basically replatforming onto this thing we just acquired. And then, you know, I mean, it took a full another year to get all the customers migrated.
But demand, I don't think Engage You or Demandbase would really be successful around today if we hadn't brought these companies together.
Job Busby: What would you say, I mean I completely agree by the way on merging teams, I could go into lots of, I could go into lots of detail on the technical side of how did you manage the, how it was written and that kind of stuff, but I'd leave that for another day I think.
Like, what would you say the biggest, biggest success was coming out of that migration?
Jon Miller: For... We saw a massive increase in retention. The next year I mean, just because literally before their, you know, demand base had had pressures, you know, because it didn't do all these things and all of a sudden.
It does all these things.
Job Busby: You didn't have a DSP before then, did you? Was the DSP part of the... The
Jon Miller: DemandBase had a great DSP. Okay.
Job Busby: Yeah. So that was integrated. It still does.
Jon Miller: That's, I mean, I think one of the real strengths of the platform.
Job Busby: From what we talk about with customers, it certainly is. So it's just, it's just one of those things that I'm just piecing together the different bits that you put together there.
Let's bring it back to ABM. Because you mentioned right at the beginning, this book back in 96. Around personalized marketing and, and the analogy of the 1800 Corner Store. Like, you've probably, you've been at every transformational shift at ABM over the last 20, goodness, is it nearly 30 years?
Which we're, we're mentioning here. So, how would you say ABM is changing now with everything else that's happening? Yeah.
Jon Miller: Well, you know, ABM started really as a one to one. Strategy for the multi million dollar pursuits. Especially more than anywhere else here in the UK. It was really where one to one was embraced.
You know, and like, I was talking to a company last night, and they're like, we have, you know, 20 million contracts that we're trying to sell to this company. I'm like, of course you're going to do a one to one campaign for a 20 million deal. Like, yes, you're going to, you know, buy the billboards all around their office when they're making a decision of kind of that point.
You know, and, and that's still, if, if you sell deals of that size, that's still an amazing tactic. And you should do one to one, you know, ABM for those big seven figure plus deals. What's really happened over the last few years, you know, in ABM is people are like, well, that sounds great. You know, I don't sell 20 million deals.
I sell 200, 000 deals. Can I use these ideas, you know, and use these tactics because everybody likes the idea of being more focused, you know, and, and, and more, and, and therefore more relevant, you know, on, on a set of audiences, everybody likes the idea of, you know, I don't, you know, if I'm going to advertise, why should I bother advertising to companies that can never buy my product?
I should only advertise to the companies, you know, that should and not, and not waste it. Waste my budget. So there's been, the first major trend was just, you know, bringing in one to few and one to many and programmatic, you know, techniques and concepts where I think it's gotten confused for a lot of people is it's not, at that point, it's not really the same thing as true one to one.
It's, but it's bringing really good marketing concepts like relevance and segmentation and targeting and personalization where it should be applied. I almost think that, you know, And people have talked about this before, like, just good B2B marketing should be account based.
Job Busby: I know exactly where you're going to go with this, because this is the same problem I have with when, and this is probably about 10 years ago when ABM was first explained to me, and I was like, well surely that's just good marketing.
Like, you, you'd want, you want to have a good target list, you want to know who you're targeting, you want to have personalized messages that speaks to your audience. Like, surely ABM at that level is just good marketing, and everyone should be doing it. Otherwise... You're, you know, wasting a significant amount of effort.
Jon Miller: Yeah, I mean, again, I think the Nets versus Spears analogy is not terrible, right? I mean, just like, like, if you are writing an e book, let's just say, sure, you want to think about who the audience for that is, right? But the traditional mindset is still, I want everybody to read this thing, right? Which is not quite the same as, I really just care about it if these 200 companies...
So, but yes, I think, so what, I think one of the major things we're seeing, you know, is that ABM is not a black and white thing. It's not, I do ABM, I don't do ABM. Instead, I think this, it's really a spectrum of styles that have more than anything else to do with the size of the deals you sell, right? If there are eight figures, you're doing one to one, right?
And if you're 5, 000 deals, you're probably doing product led growth. Well, I do think that display and brand advertising is, is a really important tactic. And, and that's been a mind shift for me. You know, I, I had some experiences in the past where I tried doing display advertising and I looked at the results and I'd say, this doesn't work.
You know, like, and the problem is I was comparing the results. on a cost per lead or, or some kind of basis that would be how I would measure my other marketing activities. And that's the wrong mindset. Right? I, I, you know, I truly believe if you try to measure your brand advertising on a cost per lead basis, like, you, you will stop doing it.
Because it won't deliver. But, you know, when you sort of go back to, no, this is a brand investment. I'm trying to... We can talk more about this too. I'm trying to connect with people emotionally, not logically. I'm talking to the reptilian brain, you know, your, your ad shouldn't even have a click here. You know, the best, the best ads you see on TV don't have a click here, right?
They, but they, they speak to you. They tell a story, they connect emotionally. How can we do that? You know, in our display advertising. And then what we need to do is we need to measure it in terms of increases, engagement or movement through an account journey. You know, we, we track a measure called lift, which is if you, an account gets exposed to your ads, how many, how much increase in traffic do we see from that account?
Both, do we see the same people visiting more or do we actually see new people from that account visiting? Our benchmark's 30%. You know, which is, again, that's just kind of, you know, everyone, every customer to see at least 30 percent left, 30 percent more accounts visiting the site than before. At Demandbase, our own ads, we're seeing 60, 70 percent left.
Wow. You know, so accounts that we're targeting see more web traffic, you know, as a result. So I think that's really compelling. The other metric that we look at is movement through the account. So we break accounts up into where we think they are in their buying journey. Whether it's you know, the awareness phase, they don't even, they're not even in market.
The 95%. Are they starting to engage? They're still 95%, but at least they know who we are, or are they actually in market and we want to get to them? Are they an opportunity, et cetera. And we've done, you know, this is best measured with AB testing, which makes it just a little bit harder. But we've, we've found that the actual number is 222%.
So, you know, more than two times better more accounts moving into being in market when they're exposed to our ads than when they're not.
Job Busby: Well, I would tend to call that velocity, I guess. Like, they're moving through the, they're moving to deal stage faster, I guess is what you're saying. Or they're moving to being...
Jon Miller: Well, it's faster, but also just more.
Job Busby: Yeah. Yeah. Volume and velocity. Yep. Yep. And that's just... Just to be clear on that, that's when they're being exposed to your brand through display advertising.
Jon Miller: Right. Yeah. So, so the point is, I think, you know, and this goes back to, you have to have a DSP that knows how to work with accounts and B2B, but, but fundamentally, I think when it's done well and when right, that this is an important tactic and channel for companies to use.
Job Busby: But I'm just intrigued you mentioned reptilian brain, like what's...
Jon Miller: But in particular, when I talk about the reptilian brain, I mean, I'm talking about the amygdala, right, which is the, the, the part of the brain where emotions live. Yeah. And there's a lot of neuroscience out there, you know, that talks about how can you connect to that part of the brain?
Because that's where, that's where emotions live. That's where heuristics get formed. Yep. You know, B2B buying is very complex and humans use heuristics to simplify complex decisions. And there's lots of research that goes into emotions influence our heuristics. So at the core level, right, you know, how can we.
You know, influence the emotion that people have around the brand and, you know, so this is where, I mean, what is, what is a brand, right? You know, I like to just define it as brand is what people say about you when you're not in the room. And it's typically the few handful of words that they associate, whether it's, you know, Apple and design and Volvo and safety, demand based and ABM, you know, like there's like some associations.
And that people kind of, you know, connect with, with companies and, and, and certain words and terms. Ideally, those terms have some emotional connection, you know, to them and ultimately how can we inject those feelings, you know, in, into the target market? I'm not the world's expert on here, but again, neuroscience tells us is that's best done through stories.
Job Busby: I just, I just see it as one of the. You know, we're talking about in today's podcast, we've kind of gone all the way from your story of discovering ABM, moving into building products such as such as Marketo, into Engageo, into, into Demandbase. I just see the emotional side of things is probably the next opportunity that's out there because everyone talks about how we need to make things more emotional.
There's been no way of measuring that up to, up to now or forming it into, into some kind of. So we've actually tried building ways of measuring emotional impact in B2B and it's really hard. We burnt through two years worth of research time and kind of came out with a wonderful graphic, but still no, nothing any deeper.
Jon Miller: And this goes back to that CMO leadership challenge that I talked about before, which is, you know, we've, we've The Marketo model, me . We've trained exec, other executives and CFOs and investors to expect that the CMO can show up and talk about how every investment is measurable and tied to impact and tied to results.
And as, as CMOs, as leaders, we need to change that expectation. Mm-Hmm. . Mm-Hmm. . Right? And we need to find ways to talk to non marketers. Why Having an emotional impact matters. And it's going to be less directly measurable. And again, I don't want to estimate how hard this is because investors have three months, six months time frames brands operate on two, three years time frames.
That's longer than the average tenure of a CMO.
Job Busby: Yeah, yeah, I was gonna say, like, you've, you've pretty much bucked the trend of the tenure of a CMO in your, over your career because, what is it, the average tenure is just over two or three years now? Yeah, something like that. Depending on, depending on which, which study you look at, I think it's about 3.
- So, you know, it, I think that just, some of the time frames you've mentioned there show the challenge is you've, You've got to deal with these changing expectations.
Jon Miller: So I don't have all the answers here. I just, I'm acknowledging this is, this is hard and this is what's going to be, I think, a key challenge for CMOs to lead in upcoming years.
As a sidebar, it's going to be especially hard for anybody owned by private equity. I'm just kind of acknowledging that. But I think it's what's going to really separate out the great CMOs of the next five, 10 years are the ones who can do that. And I, and I think it's going to be really, a lot of it's going to come down to the interpersonal dynamics of that CMO with the rest of the executive team.
Job Busby: I think it's really interesting. You've called out ownership structures there. Do you think, not pointing the finger too much at private equity here, but do you think ownership structure has a big impact in the company's ability to market effectively?
Jon Miller: Only to the extent that it affects this factor, you know, I mean, in private equity is.
It's most likely to under invest in marketing overall, particularly try to push that investment into measurable short term impacts which I think is the wrong approach. I'm trying to do what I can do to change that mindset but, but, but it's a challenge.
Job Busby: Yep. Yep. So we're coming to the end of this.
I'm going to use the question that we've written down here. So bear with me as I try and read this, but but yeah. Conscious. We want to close this off. So marketing leaders. We've talked a lot about change. We talked a lot about your career, which has been absolutely fantastic. Jon. Marketing leaders are faced with more trends and challenging changes on the horizon, like a I being one of them.
And I think that's in. If I look at a BM, one of the biggest risks I can see today is this shiny thing that could do some personalized marketing for me. We've got cloud marketplaces as well coming in. We've got, you know, a whole bunch of change about how people might buy technology. We've buys are getting younger on top of it.
So how would you focus on your strategy as a CMO to future proof, future proof your business?
Jon Miller: Yeah, I mean, I really, I am a believer that AI is, you know, extremely transformational. And it's going to, you know, have, you know, very significant impacts on how we go to market. You know, it's happening now, it's going to happen, you know, in the next two years, five years, ten years.
And, you know, I mean... I think it was the CEO of Microsoft who said, this is the next fire, right? I mean, like, it's that big, and like, I don't know, you know, but like, you know, it's probably on par with mobile, for example you know, it's, you know, a pretty big, you know, transformation in how we live and how we use technology and how we market and, you know, I, I've been using.
Well, so first off, you know, general AI. I mean, machine learning, that's been around, right? And we've been using it. I mean, if you are using intent data, you're using AI. If you're using even predictive analytics to score your accounts, you're using AI. But the generative AI of today is really, I think, the new piece, you know, where it's actually creating things for you.
There, there's a really good article from from Harvard a couple weeks ago where they studied Boston Consulting Group consultants about AI. They gave them 18 real world tasks that consultants would do and the test group had access to GPT 4, control group didn't, they ran the whole thing, what they found is that the consultants who had access to GPT on average did better faster, more accurate results.
With the exception of the one task that they put in there that was purposely designed to have the GPT deliver a convincing but wrong result. And in that one, the humans performed better than the ones who had kind of the GPT access. This article described what they called, I think, the jagged frontier which is there are things that AI is really good at, and then the things it's not good at.
There's things that humans are better at, and the problem is, it's not clear to most people today where that line is, you know, and even if you look at a task up front, you don't necessarily know a priori which one this is. The only way to, I believe, to sort of bring that blurry line into focus is to be using this thing every single day, right?
You've got to be practicing, right? You've just, you know, I don't, I don't care what it is. You have to, like, try it, like, well, did that return something that was good or not, and think about critically, and, you know, and then also partly, partly learn what it's good at and not good at, like, it's really good at summarization and categorization, it's not particularly good at just completely coming up with new ideas.
Do you think that jagged line will shift as we get worse at things from using it every day? There is this concept of falling asleep at the wheel. There's another study. that had I think technical, like, diastosticians, if I'm pronouncing it right, looking at, like, x rays and things, and it found that the ones who had AI access started to miss stuff, right, because you just get used to, like, oh, okay, we're gonna do that.
So, it's a skill, right, to, to, to, not fall asleep at the wheel, to be like, I, as a human, am uniquely good at this, and I really have gotten good at learning how to use this tool, you know, to augment me. And, and, and it's a skill, it's a muscle, and the only way you can do that is if you're using it every day.
So as a CMO, I try to tell this to my team. Like I said, go get your GPT 4, you're going to expense it, and I want you using this thing every single day for something. You know, you write, you write an email, stick it into GPT and say, come up with 500 clients. Right, you have a press release, ask it to make it better.
Job Busby: And have you seen a lot of, have you seen your team get more productive? As a result of that? Yeah,
Jon Miller: to a degree. But, I think the real productivity happens over time. You know, as you build the muscle and skill.
Job Busby: I think, I mean, what we're saying, and I'm going to steal one of my, one of my team's lines on this is, I think the biggest risk with AI is the procrastination.
Is they're not doing anything at all. And so I would completely agree. You need to just start using that muscle and testing and learning from it. So you know, I think that's some great advice. Jon, it's been a real pleasure having you on the podcast today. You know, this is, I know we didn't stick to the questions at all, but it's been absolutely fantastic listening to your story.
And I, yeah, can't wait to see what, where Demandbase heads next. Thank you.