Editor’s note: Tealium’s Web-based service helps digital marketers deploy and manage third-party vendor tags and then correlate tag-generated data to improve digital marketing operations, customer acquisition campaigns and Big Data initiatives. CEO Jeff Lunsford discusses trends and solution differentiators in the tag management sector, which is quickly going mainstream. He also shares advice for entrepreneurs based on his experience in quickly scaling companies and taking two companies public.
Please describe the challenges for success in today’s digital marketing world.
Jeff Lunsford: Digital marketers today are inundated with data that comes from disparate sources and is difficult to correlate. Their Holy Grail is to get all of that data in one place and get a unified view of the customer’s journey across all digital touch points, enabling much more effective marketing programs.
IT is also frustrated and inundated with data. They spend a lot of time putting up JavaScript tags on websites, which collect the data. The marketing folks ask IT to normalize and consolidate all the data because their mandate is to engage customers with a consistent cross-channel experience. That experience needs to be personalized based on real-time data, not data that is two or more days old.
The cloud exacerbates the problem because most companies want to work with best-in-class vendors and today’s digital marketing solutions are almost all cloud based. So they end up working with 10 different digital marketing applications (email provider, affiliate marketing network, ad networks, personalization vendor, etc.), and they’re all running in the cloud and have disparate data sources.
You’re describing a lot of chaos.
Jeff Lunsford: Yes. There are a bunch of point-to-point data flows going on and non-standard data being collected and defined in mobile and website apps. To achieve their Holy Grail, marketers have to buy all that data back from their vendors in the form of data feeds. They send it all back to IT, where they run it through a Hadoop cluster to try to correlate the data. Then IT takes an FTP extract of a certain subset of those customers and sends it back to the marketing system to run a campaign. That’s a very slow, cumbersome and expensive, hairball-batch process.
So what’s the remedy, and how does your company fit into this picture?
Jeff Lunsford: The concept of a data layer is emerging out of this crazy world of digital marketing vendors. It looks a lot like the application server layer looked 10 years ago. The emergence is arising out of need because there is too much data fragmentation, too many point-to-point data connections and flows. Ten years ago, companies only had one JavaScript tag on a website collecting data and now you have 26 or more.
If you can standardize the data layer, you can build a much more effective digital presence across Web, mobile, social, and all digital touch points.
We provide a leading platform for managing digital marketing data. It standardizes a company’s data and gives the ability to migrate the enterprise into real-time customer interaction. And the value of real time is 5X to 20X over dealing with day-old batch data.
How does Tealium eliminate the hairball-batch process you described?
Jeff Lunsford: A tag is a little piece of JavaScript code that collects data and sends it out to the digital marketing vendor our customer is working with. And they have on average three or four SDKs inside their mobile apps, which are collecting data.
In a batch backward-looking process, data gets created online but then goes off into the cloud and the company buys it back from vendors. Then it gets run through IT and two days later they have their Holy Grail.
Tealium’s technology gets rid of all those tags that collect data in different ways and installs a universal tag and defines a universal data object. We collect a superset of all of our customers’ vendors’ data and then send all that data to the vendors that need it; but we also store a version of that superset of data in the Tealium cloud so that our customer can access it, analyze it, enrich it and act on it in real time.
How do the vendors react to this change?
Jeff Lunsford: Our customers’ vendors are happier because they get a richer data set and get it in real time vs. two days later. They get cleaner data and fewer support requests.
Actually everybody wins. IT is happy because they don’t have to implement a bunch of JavaScript tags and deal with a bunch of different variable definitions – they have one standardized platform to work with. Marketing is happy because they can log in and add a tag to the website with just three clicks of a button vs. having to go to IT and ask them to put that tag into their workflow and then wait for it to be done.
Are potential customers mainly companies that have heard about your platform, or are they companies that are struggling and don’t know where to turn?
Jeff Lunsford: 2014 is definitely a year of mainstream market adoption in the tag management platform sector. 2011-2013 saw probably 1,500-2,000 early adopters. Then the word started getting out. Today big financial institutions have RFPs on the street specifically for tag management. So it’s definitely a mainstream market now and is a well-known product category this year.
What solution features should companies look for when selecting a tag management solution?
Jeff Lunsford: It must be enterprise capable and have the features that big banks, big e-commerce companies and global companies with multiple sites across the world need to manage their digital presence.
Another selection criterion, and a real differentiator in this marketplace, is the number of tags. For instance, some vendors cover only 100-120 tags. Tealium covers more than 600 tags. And we’ve integrated with Salesforce.com, ExactTarget and other strategic digital marketing and Big Data solution providers.
Finally, a platform can solve a lot of problems; but it’s still a wild, wild world in digital marketing applications, and it’s very hard for companies to find the digital marketing talent to manage all this. So companies need to look for a solution provider that focuses on customer success and will operate like an outsourced arm of their digital marketing team.
Can you share some ROI statistics of Tealium customers?
Jeff Lunsford: One of our customers shared that our platform enabled her to do in one day what used to take 14 weeks. Another customer turned a process that used to take 24-48 hours into one that takes three to four seconds. And then, because they had real-time data instead of day-old batch data, they found that if they engage customers in the first hour, they get a 60 percent uplift in shopping-cart productivity. If they wait 24 hours, that number drops to five percent uplift.
Another customer saved 90 percent on IT costs because marketers could go in and implement tags without any IT involvement.
We also had a customer whose site stayed up on Cyber Monday last year because we cached their tags. Other sites went down that day and lost money because a vendor’s tag was hanging.
When did you launch Tealium, and are you a founder?
Jeff Lunsford: I’m a founding investor, but I did not launch it. It was bootstrapped by two of my colleagues at WebSideStory, which is a company that we took public in 2004 and was a leading provider of Web analytics services. We sold it to Omniture in 2007, which is now part of Adobe. After we sold to Omniture, the founders started a consulting company helping companies manage all of their vendor tags. Just for the first year, while they were building the product, they helped companies manage their tags, tag migrations and analytics implementations.
I was the first angel in the business. I joined full time in January 2013 because the company is in hyper-growth mode, and I’ve scaled a couple of other businesses in the past.
You have taken two other companies public in the past. What is your advice for software companies looking to grow their business quickly?
Jeff Lunsford: I talk to a lot of young entrepreneurs trying to raise money. The first thing that I always recommend is that you have to bootstrap the business and show some real results if possible (unless you’re like the founding technical team at Facebook and Twitter and are known as a rock star). The average group of first-time entrepreneurs that are knocking on doors up and down Sand Hill Road are typically not going to get funding unless they can show some traction.
And I made the guys at Tealium do this before I invested the first angel money. I said, “Go get some results. Get five customers, and I’ll give you money.” And they did it.
That initial traction, rather than just an idea, is huge in differentiating you from all the other guys that are running around with ideas that haven’t built anything yet. That is my overarching advice to entrepreneurs that are starting out.
My other advice is to do what you say you’re going to do. You don’t always get capital the first time around. But if you tell people, “We’re going to do X, Y and Z” and then come back six months later and you’ve done X, Y and Z, you again differentiate yourself from the pack — because 80-90 percent of the people don’t even get X done, much less X, Y and Z. So you can really differentiate that way.
Jeff Lunsford is CEO of Tealium and has more than two decades’ experience as a technology and Internet executive. Jeff previously served as president, CEO and chairman at Limelight Networks, which he took public in 2007 as part of a $240 million IPO. From 2003-2006, he was CEO of WebSideStory, a SaaS-based Web analytics pioneer that went public in 2004 and is now part of Adobe Systems. On Twitter, follow Jeff at @lunk18 and Tealium at @Tealium.
Kathleen Goolsby is managing editor of SandHill.com.