Friday, January 14, 2011
Interview with Wes Nichols, MarketShare
Story by Benjamin F. Kuo
For our Friday interview, we thought we'd catch up with Los Angeles-based MarketShare, the Elevation Partners-backed software provider, to hear where the firm is nowadays. MarketShare recently launched a rebranding effort for the company, and is in the midst of a major hiring and expansion phase. We spoke with Wes Nichols, the firm's co-founder and CEO.
First off, for those not familiar with Marketshare -- what is it that you do?
Wes Nichols: MarketShare is an analytics company. Its primary goal is to focus on identifying what is truly driving demand, analytically, so that our customers can optimize their activities. We have a very sophisticated, analytics and software platform that over half the Fortune 50 are now using, to help guide how they invest in marketing and sales activities and investments. Essentially, we help them learn how to get more with less, and also how to consider new investments in things like social media, mobile marketing, or video. The 21st century has brought a lot more complexity into the process of marketing to consumers and businesses, and companies need a navigation system to help them figure out where they should be investing, and where they need to spend more, and where they need to spend less.
We're building very advanced analytical models which look at both direct and indirect effects, so that we are able to quantify how different media interacts with each other. For example, if you see a TV spot for Toyota, and then Google it, or you see a display ad on CNN and then open up a tab in your browser, talk about it on Facebook, or even walk into the dealership, we're able to quantify, very specifically, what combination of what kinds of media drove that sale and how that activity interacted with each other. Did the TV stimulate search? Or did we spark your interested indirectly through a banner ad, which led them to social media, which led them to go into a dealership? It's my belief that many marketers still measure in layers -- they might look at how direct mail, or search, or display, or TV, or brand advertising, or their sales force performs, in a certain swim lane. But, they're not looking at how those swim lanes interact with each other. They just didn't have the computing power, or data, or analytics methodologies until recent to do this. It's a very exciting time to be in the marketing space, although it's pretty daunting for marketers, because there are now hundreds of places to spend money.
What is it you have figured out that allows you to do that correlation?
Wes Nichols: We probably have the greatest gathering of market scientists on the planet now, overseen by Dr. Dominique Hanssens, who is a prominent UCLA professor and specialist in the area of market response models. The market response model is an analytical model, which quantifies how markets respond to stimuli. Our analytics team is second to none, in our ability to leverage our IP and methods to isolate the effect of those activities, and look at them to figure out how to drive outcomes. By linking the activities to P&L--not click rates, or cost per sale, or cost per lead, or brand awareness, which are all soft metrics--we are able to give our customers ammunition to take to their board or to finance, and prove the true effectiveness of their marketing and the true effectiveness of the agencies involved.
You mentioned that you've been growing the company recently, and made a recent acquisition?
Wes Nichols: We've tripled our size this year, and are on track to do it for next year. We now have teams in our headquarters in Los Angeles, and offices in San Francisco, New York, London, Tokyo, and Bangalore. We've been expanding the company aggressively. We also just made an acquisition of Jovian over the summer. They are a group of engineers who have figured out how to create cloud-based analytics, which allow for cross media attribution, on the fly. They're pulling in petabytes of data from Google, DoubleClick, social media, video, and mobile, along with a number of other data sources, and calculating the way they interact with each other to drive a particular outcome. Jovian's platform allows us to process and analyze campaigns in-flight, and also provide in-flight course corrections for marketers. The client demand we are seeing as we have married our analytics with Jovian's engineering is staggering. Because of that, we are aggressively ramping up our engineering staff to meet that demand, and we're hiring engineering in Los Angeles, in the Bay Area, as well as Bangalore.
Advertisers are known for their creative focus, not focus on analytics. Do your customers understand the need for your product, and has that been an issue?
Wes Nichols: I used to run a digital agency before starting this company. That was early on in the digital revolution in the 90's. that agency sold to Omnicom Group about ten years ago. What is interesting, is of the clients I was working with ten years ago, those who were the VP of Digital Marketing are right now becoming the Chief Marketing Officers of companies. As time has progressed, we have had an entire new wave of Chief Marketing Officers, who were born and raised in the era of accountability. That doesn't mean you can't be creative, it just means you also have to be good with math. I find that the marketers we have worked with, particularly the next generation Chief Marketing Officers, are bilingual in their understanding of creative strategy and brand architecture, as well as accountability. Even if they don't know how to build the model, they are able to leverage that information to make decisions. We're even seeing it become a significant competitive disadvantage for companies who have leaders who are not focused on using analytics to make their business decisions.
Talk about your relationship with Elevation Partners, how that came about?
Wes Nichols: We were introduced to Elevation and Roger McNamee, who runs Elevation, through senior executives at Google who we have had a partnership with. We immediately clicked with Roger, and found him to be an incredible visionary. He was enamored with our vision of the transparent future, and saw that we were in the early stages of significant momentum. We pretty quickly moved into a deal with them, where they took a minority stake in MarketShare, and it's been a very good relationship. One of their partners is Ted Meisel, who we worked with closely when he was CEO of Overture, before selling it to Yahoo. Whaat we love about Ted is he is incredibly smart, has been around the block, and also helped launched and grow a disruptive company. He's been an integral advisor to us.
What are your big goals for the next six months to year?
Wes Nichols: I'd say that for 2011, what we are going to see is a dramatic rollout of our software. Last year was a year of further architecture of the platform, and getting it up and running at scale with clients. I think we'll see a dramatic escalation of demand for the software this year. We've already begun looking for a chief revenue officer, who has analytics and software industry experience, and are building out our sales organization accordingly. We've also got a few more acquisition up our sleeve to help our inorganic growth, as well as provide complementary technology, and I think we're going to see global expansion.