Marketo’s CMO on the future of marketing

SAN MATEO, CALIF. — Inside Marketo’s offices in San Mateo, there are splashes of bright purple on white walls, open workspaces buzz with activity, cleanliness meets creativity, and nearly everyone is a self-proclaimed marketer quick on the draw with the company line: “We’re marketing software made for marketers by marketers.”

“You’re even better-looking in person, Tom,” says CMO Sanjay Dholakia, smiling and shaking my hand.

There’s no question I’ve just entered the brave new world of tech marketing. And Marketo, a $150 million marketing automation software developer, has a bird’s eye view. The company claims more than 4,000 customers and has designs on becoming the system of record for marketing, much like ERP for finance, CRM for sales and HCM for human resources.

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As a centerpiece of the marketing technology stack, Marketo supports third-party innovation — more than 400 companies hook into Marketo — and plays the role of platform visionary in a vast and shifting technology landscape. This means Dholakia, chief marketer among marketers, better have a good idea what the future of marketing looks like.

Last week, I sat down with Dholakia at Marketo’s offices and asked him to gaze into his crystal ball.

CIO.com: Where is marketing heading?

Dholakia: At the highest level, I see the death of marketing and advertising as we know it. A world of creative mass advertising is turning into a world of deep individual relationships, in what we call engagement marketing. This is all being driven by changes in the way we live, in the technologies available to us — this crazy digital, social, mobile explosion of devices and access points with the Internet of Things. Every organization needs to fundamentally rethink how they interact with consumers and customers. It’s a consumer-led era.

The good news is, the same trends driving this power shift to consumers are also giving us the capabilities to actually succeed in having the conversation with the consumer. It has everything to do with the data, with being able to orchestrate conversations at mass scale. Amazon has been the harbinger for this. They’ve spent 15 years and billions of dollars figuring out how to have an individual relationship at mass scale across different channels, how to just talk to me about things that I care about and not the other thousands of things they could talk about.

CIO.com: What does this mean for marketers?

Dholakia: It’s the great democratization for marketers. Regardless of the size of their company and industry, every marketer in the world can now market like Amazon. Way out in the future, we’re going to be really good at that kind of individual relationship and conversation construction across every touchpoint. It’ll involve everything from listening to my behavior in a car to my refrigerator to the watch connecting with my mobile device. Consumers are going to embrace it.

The basis of competition for companies used to be low cost or building things and delivering them more efficiently or brand — as in, everybody knows me so they’ll buy me — or better customer experience when you come into a shop or just a better product. All of those will go away. In this world, everything is moving so much faster. As soon as you put your best product out there, someone is going to copy it. With cost, somebody is going to find another country to produce it and match the cost.

But if I have a relationship with Tom and own that engagement, and Tom is ignoring the 5,000 other things hitting him every day, I will win. That’s why this shift to the new era of engagement marketing is the future.

CIO.com: Sounds a bit like the futuristic movie Minority Report, with personalized messages trying to engage everywhere you look.

Dholakia: I think the underlying capability and understanding of a person and what they like, what they don’t like is probably right. But the notion that some invisible hand is in control is what’s wrong about [Minority Report]. The consumer will be in control of the gears and let in marketers in order to have a dialogue. The moment a marketer appears creepy or offensive or annoying or interrupting, consumers will shut that off. In the Minority Report, they couldn’t shut that off.

CIO.com: Do you foresee consumer privacy being a stumbling block?

Dholakia: The privacy train left the station a long time ago with the phone. You can choose to not have a mobile phone so that no one knows where you are. But the phone provides a useful utility, so we make those tradeoffs. People have shown over and over again that they’re willing to give you more information about themselves if you improve their experience. I think privacy is a big red herring. People will say with words that they’re concerned about privacy, while at the same moment give up more and more data. Of course, again, if it doesn’t improve the experience, they’ll just turn it off.

CIO.com: Mobile devices are becoming the dominating interface. What does this mean for marketers down the road?

Dholakia: This is one where I think the rest of the world has it a little wrong. The moniker or phrase “mobile first” was a good one in that it recognizes the fact that you and I and everyone else have these devices. But then I think people thought, “Yup, I got it,” and they stopped. That’s wrong, because we still live across all these other places. In the future, we’re going to live in even more places: cars, refrigerators, watches. If I’m not connecting my interactions to all those other places, I will have screwed up. Marketers have to understand that a consumer is going to spend a lot of time [on a mobile device] but then make sure they’re connecting to all these other channels so that they’re having that seamless conversation.

Also, people make the mistake the mobile device is one channel. That’s not true. This thing is like 10 channels. A life insurance company will look dumb when I’m on the same physical device, same spatial device, the company says I should get life insurance, I say no, and then I move my thumb an inch to the left and get the same message from the company — all because they haven’t connected the understanding of me across all these channels.

CIO.com: You wrote a blog post about the death of “Mad Men”-styled ad agencies. What do you mean?

Dholakia: It wasn’t coincidence that the series ended. Advertising will be there, people will still spend trillions of dollars, but it’s going to get spent in a much more targeted way. For the longest time, all these channels lived in isolation from each other, pushing or blasting generic messages. Paid advertising and engagement-loyalty-personalization marketing completely separated. Now both are collapsing on top of each other. The notion that I can take my paid channels and connect them to all my other marketing is a very powerful idea.

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There’s the famous John Wanamaker quote, “I know that half of my advertising dollars are wasted, I just don’t know which half.” Now, with the data, I can know precisely which half isn’t working. More importantly, what if I could make that half as productive as the other half? What if I could increase 100 percent the efficacy of my marketing by making that paid advertising better? I can use all this first-data, even if it’s anonymous, to inform my ad buying and therefore target very specific information to you.

That’s the idea behind Marketo’s Ad Bridge. It’s another extension of this concept of, you gotta engage everywhere. You have to use all of the information you have about me to make my experience with you as relevant as possible.

CIO.com: Big changes are coming to marketing and commerce. What is the social and cultural impact?

Dholakia: That’s a really great question. The theme of this year’s Marketo Summit was “inspiration in the nation.” Marketo CEO Phil Fernandez was talking about Hero K12, the education company that’s using Marketo to make the lives of children better by driving new engagement models to charter schools in underserved communities. I had Salman Khan of Khan Academy on stage with me. They’re literally changing the world, the nature of education. I see enough evidence that both public and private [organizations] are trying to create access where it didn’t exist.

Marketers in this new world have a voice, and their influence will increase dramatically. They will be the architects of these consumer relationships and engagement. They’ll have the ability to motivate and move behavior at scale. Yes, they’ll use it to drive the mission and purpose of their business or organization, but they can also use it for good, a powerful purpose, to inspire. Just like everything else, there will be some awful people who will use it in bad ways, but marketers seizing this opportunity en masse can truly change the world.

CIO.com: What makes marketers good stewards?

Dholakia: I’m not saying marketers will be the only stewards, just that they’ll become a more powerful steward at the meta societal level. They’ll share that stewardship with government institutions, media, journalism. To change human behavior is not a trivial thing. History is replete with evidence that great storytelling, emotional resonance of a message, and passion will move and change people’s behavior. Heretofore, that has historically been the domain of political leaders. We know kinda how that goes. So marketers create a counterbalance. Where you had a limited number of voices, you now have so many more of these creative, passionate people who know how to tell a story and mobilize people. I think this is what makes them great stewards.