 from Las Vegas. It's theCUBE, covering Oracle's modern marketing experience. Brought to you by Oracle. Now, your host, John Furrier. Hey, welcome back everyone. We are here live in Las Vegas for Oracle's modern marketing experience 2016. This is theCUBE, SiliconANGLE's flagship program where we go out to the events and extract the signal from the noise. I'm John Furrier, the host of theCUBE. Our next guest is David Skinner, Vice President of Strategic Alliances and Partnerships at Merkle and James Hilarney, who's the Vice President at Oracle Partnerships. Welcome to theCUBE. Thank you so much, John. Thanks for having me. So, big announcement. Merkle, huge deal with Oracle. Very successful modern agency. That's kind of how I see it. You guys are doing some pretty cutting edge work, not only pioneering, plowing the fields, but delivering great value because Oracle normally owns a database market. They're in a ton of enterprises, IT. But now as Martek and Marketing Cloud moves into the CMO digital stack, the agency equation changes. So, share your thoughts at Merkle. You've been super successful. What's been your secret formula? What's the secret Coke recipe? What's the formula? Right, so, Merkle's always been about driving marketing from the perspective of real people. And it used to be that real people were reached via direct mail. They'd send a piece of mail to your mailbox and manage large databases for companies that did that. And the digital economy and digital advertising has now evolved from targeting cookies and targeting devices, which is where digital was for the last 20 years when the ad service launched to, in the last three or so years, were able to actually target real people in digital. And that's really where Merkle's taken our historic strength around managing large advertisers, customer databases, having our hands on their transaction data to the benefit of their campaigns. And that's a role that the traditional broadcast agency hasn't had. If you're an agency of record, you're probably not gonna have customer data for your advertisers. But being a database provider, Merkle has sat there and we've now taken that strength and data management applied that to digital. And they've had a lot of experience and strength working with platforms like Oracle to take that data for our customers, activate that out in execution channels via the Oracle Marketing Cloud, then being able to close the loop and bring that back and actually measure the results. So as a performance marketing agency, we tie all this back to ROI and performance. We only get paid if that performs. So that's really the formula we're taking. That's a premise to you guys, performance-based. So you've kind of moved upstream, if you will, from technology platform up to agency-like stuff versus agencies today going, hey, I'm your ad people, we don't measure anything, it's all, it feels good, down to platform. So it's harder to become a platform player when you're an agency, but it's easy to automate some stuff if you're a platform. So you have to kind of dance on that line of where you're creative or you guys have a creative component? We do, yeah, we do creative. Originally we started creative in Direct Mail and email, but we have a full creative shop, over 500 people now developing. Again, more performance-based creatives where we came from. So we have 200 rules on things that drive performance in response within the email or within a piece of display. We've now extended that and we're doing video creative. So that's a piece of it. So it's really both the build, we talk about build and run. So build being the onboarding setup of things like the Oracle Marketing Cloud and then run is the services that make that sing and dance and perform. So we know when you say performance-based, when you go back to the search days, you've cost per acquisition, you have to be in that game, right? There's always that whole business, really that search engine marketing, but now as you come into this new generation of real-time data, multiple data sources, pressure at the cloud with unlimited compute potential, the value is shifting to the data, you have a heritage in data. Tell us what you see there. I mean, what's some of the state-of-the-art things you're doing for customers? Where is the areas that are still hot spots that you're still kind of getting the scar tissue on and where is it matured? Can you add some color to that? Sure, yeah. A general rule of thumb from a data side is that if someone's raised their hand, that they want to be reached by a campaign and they're two times more likely to respond to that campaign. So another day, Merkel's in the business of finding those handraisers, finding those responders, and if we can effectively find them, we're going to drive a much more effective campaign. So some interaction piece of data. Right, exactly. If someone either comes to a website and opts in or if someone responds to a campaign and says, I want to learn more, those are all signs that they're in market and those are going to be the people that perform best. In terms of real examples, we've seen great examples where the Omni Channel has been a buzzword now for the last couple years in our industry, but we've seen some excellent examples where, for example, for a hotel company, we ran a test and control where we had multiple channels going on as part of that campaign. We had search, as far as that campaign, we had display and we had email and we were able to demonstrate that if a control group was exposed just to search, they were less likely to respond and convert than a separate group that was both reached by an email, also searched and came to the website. So real examples of up to 50% lift in conversion by reaching folks who are in market across multiple channels. Because another one of my favorite stats is that over 60% of online transactions now start in one channel and complete in the other. So we'll search on our phone, we'll find out about a product, we'll research that shirt we're thinking about or that car we're thinking about and then purchase another channel. And again, being able to connect the dots between those two around this data around real people is where we've had a lot of success. That's the nonlinear progression you're seeing on digital. There's different engagement points and you have to keep that active data around to support kind of figuring out who the hand razor is and kind of where they are in that discovery phase. Yeah, we talk about how the idea of the purchase funnel is dead and it's really a purchase cycle. So you see people rapidly cycling through different parts from awareness through consideration, through intent and often in particular to digital, someone can be fairly far along in that cycle and jump out to a competitor. If Peter Burris was here, he'd be a loavers. This is one of the things he's working on was research and love to get your car to follow up with them. Because that's something that we would let them kind of drill down on our research and share some of that. James, talk about the fit with Oracle. So how does this all fit with you guys? So obviously they got some serious market power. You had mentioned 500 data scientists on staff or statisticians, basically data people. Data science analysts all kind of blending together these days with the visualization tools and technology out there. How does it fit with Oracle? Because you guys are enabling them to be successful. I'm assuming with Oracle and among your 900 integrated partners, how does it all fit in? Merkel is a very special outfit. Obviously they grew out of the more tech world and grown into the ad tech world. Third biggest person of Google AdWords, et cetera. So they're very exciting from that perspective. They have huge scale, global reach. They've made a lot of very interesting acquisitions over the past year or so. In addition, they're what we call a full stack shop. They are capable across the very beginning of the marketing automation, ad tech, life cycle, from the audience building with a DMP to the different types of channel orchestration, marketing automation. All the way back to things like optimization on the backside with maximizers. So they have full capability to roll out multiple products from multiple customers globally all at the same time. And as the Oracle marketing cloud evolves, we need partners that can be versed in multiple products and have global reach to support the type of global brands we support. So are they using Oracle technology and go to market or both, or how does it fit in? Both, both. So we are selling and servicing Oracle technology, the Oracle marketing cloud in particular as well as the Oracle data cloud. And similarly, we're going to market together where being large organizations who both serve enterprise customers, we're finding we have a lot of joint customers where we can kind of join arms and work together as well as new logo where we're identifying opportunities and going to market with the Oracle sales team. So in some cases you join sales calls together or you guys just lead it together, pass it through and direct to Oracle? Right, yeah, kind of. Because you're full service. All the above, yeah. Okay, so I got to ask David, so what's the biggest revelation that's now becoming more mainstream in terms of the agency's future? I mean, I'm in the media business so that data doesn't go by where media's not dead and video's not going to save the media, all these things going around the industry around the media business. And I always say it's the same game, just different formula, data's driven up, data's a big part of it. But the agencies themselves are being disrupted. What's your take on this landscape because this is now a huge dollar on the table for media spend that could be reallocated to digital, other digital new business models. What's your take on the industry? Yeah, I mean, well first, one of my favorite stats in the industry is that marketing over time is a percentage of GDP. Advertising is a percentage of GDP. It's been remarkably consistent over time. So advertising globally is about 3% of GDP and it tracks GDP almost exactly over the last like 80 years. So any changes we see, any growth we see is really a share shift between channels. And I think the biggest shift we've seen is digital has had so much attention rightfully so over the last 20 years, it's really been a share shift from print to digital. So a lot of advertising dollars have fled print and moved to digital and that's really where the action's been. In terms of I think the major change in the agency business model is really around what we like to talk about at Merkle is people-based marketing. And what we mean by that is again, taking the concepts of direct marketing one-to-one messaging and doing that at broad scale across multiple channels. And we're starting to see that agencies are looking to invest in people-based data. Agencies are renting US household databases from companies like Merkle who have that data and starting to move from panel-based planning to people-based planning. So historically, agencies plan with the panel with the ability to now target real people in channels like Facebook and Twitter and Google and all the major media companies are shifting to, hey, you don't want to get a bike from a cookie, what you want to do is get a purchase from a person and these digital media channels can prove the end-to-end ability to do that and agencies now are catching up to ensure that their planning and their execution can happen at that people basis. And that's really the holy grail but you got to know what you're looking for, right? So if you don't know there's been a cookie-like in a person buying, that's the transactional life cycle, right? I mean, it's the progression. So you got to, I mean, how would you rate the progress bar on this? Do people know what they're looking for? And this is, everything's measurable now. But I think we're getting there. I think, if you look at where the industry was a few years ago versus I think where it is today and where it's going, in particular around the data team. So we were talking earlier around how data is really the oil of the information economy. It's the key ingredient that the companies who figure that out are most successful. And Oracle's really built their marketing cloud with a data-first theme. Acquisitions around data logics and blue-kai and similar. Is that the main reason for the partnership? It's, I think it's the fundamental reason why our companies align so well is that it's shared DNA for both of us. So when you look at the data evolution we've progressed from 10 years ago, the only data in marketing was used offline by direct mail lists and send people mail in their mailbox. In the last five years, this whole cookie-based economy of online data came up. Companies like Blue-kai associating in-market behavior like someone who's in market for travel or went to an auto website and they're in market for auto and associating that with a cookie. And we've built this fabulous targetable universe online using very true data signals, cookie-based data. Then where I think we're now seeing what the industry evolved to is real anonymized and privacy-safe, but true people-based data for digital targeting. What is Oracle's differentiators? What's your take on Oracle? Why are they different in this marketing cloud era? The themes Oracle uses to talk about the marketing cloud really resonate for me and that's that Oracle is buying and acquiring and has built this cloud by acquiring the one or two ranked leader in each of these verticals. So, starting with the DMP, they acquired a leading DMP, going over to the multi-channel campaign management, two great platforms and all of the responses and a similar maximizer. So, by having best of breed in each channel, it's a great place to start. And now we're at a point where, and I think we're seeing this in the industry as the larger marketing clouds are really emerging and separating from more of the venture-backed point solutions, the connected to you. Yeah, it's a platform. Right, and the connective tissue between those solutions is now being built to the point to pay off on that multi-channel story. Well, they can enable these venture-backed chains. Let me talk about a lot of mintegos here. They're venture-backed. They're going to come on and see some people from even Salesforce's ecosystems starting to come into the fold. Is that the trend we're seeing? Well, what's very interesting about this world is you don't necessarily have to be very big to have a big influence. So, we've got some, you know, Merkel's a very big operation, but some partners can be very nimble and really influence how our customers can change. You can go as deep as you want. I mean, if you have a full global scale like Merkel, they've got the whole portfolio to work with, obviously tightly integrated with you guys at the partnership level. But you have some other channel partner come in, stand up and do a point solution and really kick butt at it. Well, even that, we even have smaller partners, a fraction of the size of Merkel that can also work across the full stack for customers. But what's really interesting about Merkel, kind of like an agency of the future is the fact that they're performance-based. So, how they get paid is a function of how well the technology performs and for them to actually build a lot of stuff around our technology is a stamp of approval around our technology. So, we want to make sure they have everything they need around enablement and performance to make sure that their customers do well. David, final question for you. What's the big, uh-huh, in terms of what's happening in the market? What's the one thing that people should pay attention that they might not be hearing about or reading about or seeing in the news and or in the industry trade that they need to pay attention to? You could highlight one or two handful of things saying, hey, these are areas you cannot miss the boat on. Right, right. One interesting one for me is that lots of companies are becoming media companies. So, companies that you'd historically think of as airlines or retailers are now tapping into their customer data assets, which is the most valuable asset that a lot of companies have, and using that in a way to actually drive media and drive their audiences back to their own properties and create this virtuous cycle of, hey, we do business together, and I want to talk to you not just on my own website if I'm a retailer, for example, but I want to be able to bring you back with film and customers, it's a new loop. That they're controlling the distribution and you want to have that resident on their critical infrastructure on property. That's where they can manage some of the IDs and data. Exactly, so if you look at retailers. First of being parasitic to Facebook or Google, that they can own it. So if you look at large retailers, the largest, Amazon, Walmart, these businesses are now some of the largest media business as well, where if I'm Pampers and I want to reach my customer, I may not just be going to my traditional website to media properties like New York Times, or I might be going to Walmart and Amazon as advertising properties, so we see that as a really interesting trend and we're actually helping enable some of those. And they're not usually exclusive either, right? You can continue to wander around the web, but if the advertiser, the brand spending the money to reach the customer, they're activating the interaction. Why don't they own the data? I think that's what you're kind of getting at, right? Absolutely, and they're taking advantage of the fact that they do have that closed loop data. Oracle could be the ID system, that's a different conversation. We'll talk to Mark, heard about that and Dave Donatelli and Larry Ellison, we get them on theCUBE at Oracle Local World this year, so. That's all about the data at the end of the day. We'll get Larry Ellison on, I promise. Herd's been on. Okay guys, thanks so much, really appreciate it. Thanks for sharing the insight. Congratulations on your partnership, global scale, from small, medium-sized enterprises all over the global scale. Agencies are changing, and Oracle, modern agency here on theCUBE, we'll be right back after this short break. Awesome, thanks John. Thanks.