Priority Engine Drives TechTarget’s Q3 Earnings

The Priority Engine Summary provides rich buyer intent details.
The Priority Engine Summary provides rich buyer intent details.

TechTarget revenues rose 10% to $33.8 million in Q3 2019 driven by their sales and marketing intelligence Priority Engine service.  Quarterly Priority Engine revenue rose 30% year-over-year and is up 37% year-to-date. The firm added 51 new Priority Engine customers in Q3.  

Long-term contracts now represent 35% of revenue.

TechTarget believes that their initial success selling to firms outside of the top 200 customers “bodes well for our launch of Priority Engine Express in 2020, which is targeted at the next largest 5,000 software vendors and resellers, for whom we don’t currently have attractive offerings in their price range.”

TechTarget collects second-party intent data and opted-in contact data from its 140 B2B technology media sites.  Priority Engine identifies companies actively in-market along with who is conducting purchasing research, the buyers’ journey stage, and other vendors under consideration.

TechTarget said that its new features have been “well-received” by clients as it “increases the value and ROI of Priority Engine for our customers.”  They are also confident in their “robust” 2020 product roadmap.  “Our customers are still in the early stages of their transition to becoming data-driven sales and marketing organizations.  We have many customers that are using our data in sophisticated ways to drive market share gains and revenue growth,” stated their 8-K filing.

The firm plans another ten percent increase in Priority Engine pricing, similar to annual price hikes of the past two years.  CEO Michael Cotoia is confident in their ability to raise prices:

Our customers take a look at our data that we offer, real and observed purchase intent data, and they have a very large initiative around…their sales and marketing organization. So, we haven’t really had a pushback price. They do understand how we get our data in terms of providing the right content and publishing the right content across…thousands of technology segments. Owning and operating those sites and communities across our network throughout TechTarget and really observing and capturing the real intent that we’re getting from buying team members… it’s very clear, it’s very taut, it’s very concise, so we haven’t really seen any pushback on that.

TechTarget CEO Michael Cotoia

“By helping companies see and interpret real buyer needs and preferences, Priority Engine first provides a relevant, permissioned basis for a marketer to intercept a buyer’s journey and then it assists users in taking very specific influencing and engagement actions,” CMO John Steinert recently told ABM Report.  “Because Priority Engine provides the actual permissioned people doing buying research, it saves tons of resource that’s commonly wasted chasing prospects who don’t have a need and leads that are actually dead ends. And because Priority Engine shares the real needs and preferences of the actual buyers with both marketing and sales when they share the platform, it enables far better conversion at every step, from funnel, to pipeline, through to renewal.”

Cotoia is also confident in TechTarget’s market expansion strategy.  “We are seeing [SMB] customers now. We’re taking their input. We’re looking to possibly modify, enhance, position, package, create some other additional spinoffs of this Priority Engine Express for different segments within all those others. So, we’re off to a good start.”

Priority Engine Express will remain in beta until Q1 with several dedicated sales reps during the beta window.  

One identified opportunity is value-added resellers at both the national and regional levels.  “They are looking to really identify the opportunities and the projects and buying teams that are in their regions” and focus on their go-to-market strategy and active prospects said Cotoia.  “We want to make sure that we have the right user interface [and] ease of use for those regional resellers so that their sales teams, inside sales and outside sales, have easy and quick access to the potential projects and buying teams within their market.”

A Tale of Two Teams

Over the past few weeks, I’ve had the opportunity to observe two different teams while replacing the flooring on my first floor. The first team laid tiles, and it was an uncomfortable experience watching the master tiler berate his apprentice. The second team demoed the wood floor and carpet as a team.

The tile experience was awkward. While the end work product was excellent, the apprentice was treated more like a dog than an employee. The tiler incessantly berated his employee making it difficult to work from home. Several times an hour I heard the boss yell “Charlie!” and then proceed to tell him he was lazy or incompetent. The tiler did all of the artisan work with the apprentice grabbing tools, hauling tile, mixing grout, and waiting for his next instruction.

When I discussed it with the flooring company that was managing the project, they confessed that they usually have him work new construction instead of renovations. The master tiler will have work so long as the economy is strong, but I imagine he will be quickly dropped once the economy cools.

The second team arrived this morning and attacked phase I (demo). All four knew their roles and worked without much direction required. The house was noisy with electrical saws and wood being pulled up with crowbars. It buzzed with Spanish as the guys enjoyed working together. Nobody needed direction beyond simple coordination. The men moved between tasks as the project proceeded. I don’t think I heard a single raised voice. They were a team that I’d welcome back in my home.

So what was the key difference? Respect. If you respect your teammates and subordinates, the team is more efficient, the work is more enjoyable, and each member is confident in their role.

Breaking News: Leadspace Acquires ReachForce

Customer Data Platform vendor Leadspace acquired B2B Hygiene vendor ReachForce.  The two firms offer complementary functionality with ReachForce adding webforms (SmartForms) and a continuous data quality platform (SmartSuite) to Leadspace’s CDP.

Leadspace plans to merge SmartSuite into their CDP over the next six months. SmartForms will become an “activation product” for Leadspace.

“ReachForce is a well-respected brand with an experienced team in the B2B marketing tech space,” stated Leadspace CEO Doug Bewsher.  “We’ve known them, and competed against them, over the years, so we’re excited to be joining forces now to move the B2B CDP space even further.”

ReachForce will maintain its Austin office and staff while LeadSpace will continue to operate in Hod Hasharon, Israel, and San Francisco.

Reachforce SmartSuite Customer Data Management processes.

The Reachforce SmartSuite provides real-time and continuous data quality management.  Features include B2B data match and enrich; data standardization; de-duplication; email, phone, and address verification; data health reports; CRM and MAP connectors; and contact prospecting at target accounts.

ReachForce has its best-in-class SmartForms product, which is a key way that customers build an understanding of their customers, as well as SmartSuite, which provides a real-time data cleansing and management service. Combined with Leadspace’s best-in-class B2B customer data platform, there is a definite complementary and additive effect. SmartForms will become one of the activation products for Leadspace, and we will work over the next [several] months to combine the best of both data management platforms to provide a single end-to-end solution for B2B CDP. 

Leadspace CEO Doug Bewsher

The Reachforce acquisition follows shortly after Dun & Bradstreet acquired Lattice Engines.  Both Dun & Bradstreet and Leadspace now offer a CDP alongside a data quality hub, digital advertising, visitor intelligence, and CRM/MAP connectors:

Dun & Bradstreet / Leadspace Product Line Comparison (© GZ Consulting 2019)

Forrester’s Q2 2019 Wave report on B2B Customer Data Platforms placed Lattice Engines and Leadspace in the leader category with both holding the highest scores in strategy and Lattice Engines being ranked slightly higher for their current offering.

Prior to the acquisition, the Dun & Bradstreet CDP (D&B DataVision) was ranked a strong performer. The dual acquisitions help the vendors extend their leadership in the CDP space and increase the likelihood of additional consolidation within the B2B Customer Data Platform segment.

Leadspace did not disclose the acquisition price. Acquisition discussions began earlier this year.

Dun & Bradstreet Acquires Lattice Engines (Content + CDP)

Lattice Data Cloud

Dun & Bradstreet announced the acquisition of AI-powered Customer Data Platform (CDP) Lattice Engines yesterday.  Acquisition details were not disclosed, but the deal is expected to close within thirty days.

This is the first major deal for Dun & Bradstreet since it was taken private in February. The combined entity brings together world class company datasets (WorldBase, Global Company Authority contacts, credit data, Hoover’s) with the AI-driven Lattice Atlas Customer Data Platform.

According to the Dun & Bradstreet press release, Lattice Engines adds a “best-in-class CDP to the depth and breadth of global commercial data in the Dun & Bradstreet Data Cloud and growing portfolio of complementary sales and marketing solutions.”  The combined capabilities join Dun & Bradstreet’s data capabilities with Lattice Engines AI and analytics.  The merged platform creates “an invaluable single source of sales and marketing truth” which helps companies “simplify their data, operate more productively and activate audiences through personalized, omnichannel campaigns that drive results.”

Dun & Bradstreet content has been a cornerstone of Lattice Engines for the past several years.  Already having standardized on a core set of data should expedite the acquisition.  When Dun & Bradstreet acquired Avention two years ago, the WorldBase and global contact datasets needed to be swapped into the Avention platform.  This time, a data swap will not be required (though some additional Dun & Bradstreet datasets will be included).

“This acquisition supports the strategy we announced when Dun & Bradstreet became a privately held company – to bring new technologies and innovation to our existing solutions, creating deeper customer value. With our investment in Lattice Engines, we will become a leading provider in the fast-growing B2B marketing analytics space, helping our clients accelerate revenue, grow their businesses and become more competitive.”

Dun & Bradstreet CEO Anthony Jabbour

Future content includes Dun & Bradstreet financial scores, sales trigger insights, and digital data (e.g. Audience Solutions IP and digital device identifiers).  Lattice Engines will also benefit from Dun & Bradstreet’s identity resolution capabilities.  These upgrades “will further enhance Lattice Engines’ best-in-class analytics models, improve personalization, and drive better results for our clients,” said EVP of Sales and Marketing Solutions, Michael Bird.

Salesforce Restricts E-commerce Gun Sales

Salesforce updated its acceptable-use policy to ban gun retailers who use Salesforce to market, manage, or fulfill semi-automatic weapons orders. The ban also covers parts like “multi-burst trigger devices” and large magazines.  The policy goes into effect for current customers at renewal.

According to Salesforce, only a small number of current customers are impacted.  The firm declined to name retailers, but Camping World, which spends over $1 million per year on Salesforce technology, is likely to be impacted.  The Washington Post estimated Camping World’s migration costs to be over $2 million.

Mark Oliva, a spokesman for the National Shooting Sports Foundation called the policy “corporate-policy virtue signaling.”

“It is a very chilling effect when a company as large as Salesforce puts out a policy like this,” said Oliva. “A policy like this is not surprising from a company based in that part of the country.”

Salesforce CEO Marc Benioff called for banning the AR-15 last year following the Parkland shooting and donated $1 million to March for Our Lives.  The firm and Benioff have a history of taking political stands including support for a US GDPR (data privacy), corporate taxes in San Francisco to support the homeless, and LGBTQ rights.

Shopify, which provides e-commerce software to 800,000 sites, implemented a similar anti-automatic weapon sales policy last year.

While many firms operate with a profit maximizing philosophy espoused by economist Milton Friedman, Salesforce is managed with a stakeholder’s philosophy that weighs other stakeholders besides shareholders. These parties include employees, partners, customers, the environment, and society in general. CEO Marc Benioff created the 1-1-1 pledge 18 years ago which donates 1% of corporate technology, people, and resources.

While Oliva derides Salesforce’s new policy as “virtue signaling,” such policies, when transparently stated, may be profit maximizing. A firm that is viewed as ethical and socially progressive may attract more customers, partners, investors, and employees than it repels. Simple profit maximization requires that firms take an amoral stand which can result in scandals or embarrassing business practices which undermine brand value and company credibility.


If you’d like to comment on this blog, I have setup a forum on Quora for discussing Salesforce’s policy.

D&B WorldBase Reaches 300M Companies

 

Promotional image posted on LinkedIn.
Promotional image posted on LinkedIn.

It was only a few years ago that Dun & Bradstreet’s WorldBase file reached 200 million records, but this week the file hit 300 million active and inactive company profiles.  The dataset is used for sales, marketing, research, master data management, credit risk, and supplier risk products.  It is also licensed to many other vendors (the majority of which are not allowed to publish the provenance of their data). While sales reps do not use inactive companies, they are important for risk products, master data management, compliance, and database cleansing.

Two key features of the WorldBase data set are the D-U-N-S Number, their de facto global numbering system, and global linkages which tie together global company family trees.

The WorldBase file is a key asset for Dun & Bradstreet products such as DNBi, D&B Hoovers, D&B DataVision, and D&B Optimizer.

Congratulations on reaching this milestone, Dun & Bradstreet.

DemandBase Revenue Growth

One of Demandbase's core technologies is real-time visitor intelligence for ABM.
One of Demandbase’s core technologies is real-time account-level visitor intelligence for ABM.

Nathan Latka interviewed Demandbase CEO Chris Golec back in Q4. Demandbase is growing rapidly and now employs 300. In November, Golec said the firm was likely to achieve 50% or greater growth in 2017. 2016 revenue was around $75 million and the firm was above a $100 million run rate in November. Average revenue per customer is around $20,000 per month. Small customers may select a single module for $2K to $3K per month but then add multiple solutions as they grow. Net revenue retention is around 110%.

The firm has between 50 and 60 quota carrying reps, 20 to 25 marketers, and 10 to 15 administrative staff, with two thirds of the company focused on data, R&D, engineering, and other functions

The firm has 400 to 600 customers with top customers spending a couple million dollars per annum.

Golec expects the firm to be cash flow break-even during the first half of this year.

Demandbase, founded in 2007, was an early and forceful proponent of Account Based Marketing. For several years, they had a monopoly on the positioning, but ABM caught fire as a B2B sales and marketing process with several enterprise software firms including Marketo and Salesforce now offering ABM solutions.

“ABM as a category – the interest level has reached the investment community and so as investors do their research they discovered that Demandbase is the largest and pioneered the category itself.  So we had a lot of inbound interest.  At the same time, we started developing some new innovations using AI and massive data that we’re sitting on. So it really unfolded into a whole new level of innovation.”

  • DemandBase CEO Chris Golec

DemandBase has already received $156 million in funding, including a $65 million round last May. Both Salesforce and Adobe have taken investment stakes in Demandbase.

While some MarTech firms are struggling with revenue growth and churn, that has not been an issue at Demandbase. “ABM is more of a business process and our position is much more of a platform where we’re helping customers throughout the whole lifecycle of attracting, updating, engaging, converting, and upselling them.”

The firm has ten staff in London helping grow European sales. “ABM adoption in the UK and Western Europe is really starting to pick up.”

Source: Nathan Latka SoundCloud Interview of Chris Golec

Oceanos for Salesforce (Beta)

Oceanos ListOptimizer supports quarterly batch updates to account, contact, and lead records.
Oceanos ListOptimizer supports quarterly batch updates to account, contact, and lead records.

Contact data management vendor Oceanos is working with Datarista to bring an SFDC-based contact service to the market.  The Oceanos ListOptimizer service, currently in in beta, will be generally available in Q1.  Sales Operations can run counts, perform company and contact searches, and ensure ongoing data integrity.

The service supports standard company and contact list building with running counts as variables are selected.  New execs may be added as lead records or accounts and contacts.  Duplicate checking is performed.

Batch Salesforce updates are performed quarterly.  In 2018, the updates will run every other month with contact changes updated weekly.

Oceanos offers best-in-class contact records from over a dozen vendors.  When records are deployed to customers, they are subject to real-time reverification against FreshAddress, FullContact, and Pipl.

Contact management services are purchased on a credit basis with custom pricing plans based upon volume and intended usage.

In other news, Oceanos recently inked a deal to deliver its ContactAPI to The Big Willow intent data platform. “Targeting prospects before the market even knows they exist provides our customers a first mover advantage,” said Big Willow CEO Charlie Tarzian.  “With the Oceanos ContactAPI, we provide our users targeted contacts for intent-qualified opportunities that accelerates engagement.  With 15 years in the space, they’ve earned a stellar reputation and we’re thrilled to take this next step in our partnership.”

Along with connectors and APIs, Oceanos offers free data health checks and a team of data consultants to assist with data hygiene and analytics initiatives.

Lattice Engines: Predictive Model Building

The Lattice Data Cloud Explorer highlights the top fields by category and helps admins determine which fields should be exported to other platforms.
The Lattice Data Cloud Explorer highlights the top fields by category and helps admins determine which fields should be exported to other platforms.

Lattice Engines has taken the pole position in the emerging Predictive Analytics space.  In yesterday’s blog, I covered its pricing, value proposition, content, and integrations.  Part two covers model building.

When first launched, Lattice Engines and its peers had long deployments and black-boxed models that required data science expertise.  The firm now offers 24-hour deployments, simplified model building, and greater transparency around models and recommendations.  Furthermore, the system allows marketers to either build their own models or import industry standard PMML files constructed by their data science teams.

Predictive models are built by importing training files which are matched against the Lattice Data Cloud using D&B DUNSMatch logic and Lattice proprietary techniques.  Training models contain examples of both positive and negative outcomes (e.g. win / lose, renew / drop).  A model is typically available within thirty minutes of the training file upload.

Ideal Buyer Profile scores (Lattice’s term which is similar to Ideal Customer Profile scores) are available to sales and marketing and include both scores and recommendations.  Marketing can view the model via a graphical Data Cloud Explorer which highlights the key signals and variables in the model and makes the data available for export to other platforms.

To make the data more actionable for sales reps, Lattice provides Salesforce Talking Points which display recommendations and explanations that include Lattice data, transactional history, and buyer behavior.  A Lattice Buyer Insights CRM I-frame contains Lattice recommendations, talking points, company profiles, company fit, engaged contacts, engagement activity, intent analysis (surging topics), web activity, and purchase history tabs.

Lattice Recommendations with related scores. Sales reps can explore any of the recommendations by clicking on them.
Lattice Recommendations with related scores. Sales reps can explore any of the recommendations by clicking on them.

Future plans include a user interface for segmentation analysis and simplifying intent scoring to high/medium/low.


Part 1: Lattice Engines Overview.

Sparklane €4m Funding Round

Sparklane Lead Scoring
Sparklane Lead Scoring

Sparklane, which describes itself as “a publisher of sales intelligence SAAS solutions,” announced that it received a €4m funding round from XAnge and Entrepreneur Venture Investment Fund.  The round raised its total funding to €7m.  XAnge also participated in Sparklane’s previous funding round.

“We were won over by Sparklane’s disruptive positioning and the impressive performance of its management team, prompting us to offer them our renewed support as we participate in this fundraising initiative alongside Entrepreneur Venture,” stated Guilhem de Vregille, Deputy Director of XAnge.

The round allows Sparklane to continue its European expansion.  The French company established itself in the UK in 2016 and is currently eyeing the German market.  The funding will also be directed towards expanding its artificial intelligence capabilities, and growth in their sales and R&D teams.

According to Chairman Frédéric Pichard, the funding round is a “real vote of confidence,” in the company.  “Our goal remains the same: to help marketing and sales people identify their future customers more quickly using Artificial Intelligence.”

Sparklane offers predictive lead scoring and prospecting tools for sales and marketing teams in the UK and France.  Their Predict platform processes client CRM data to define an Ideal Customer Profile (ICP), apply predictive lead scores, and identify look-a-like prospects.

Sparklane supports nearly 350 clients across banking, insurance, technology and business services.  The firm was listed in Deloitte’s 2016 EMEA Fast 500 list of technology companies with 265% revenue growth between 2012 and 2015 (three-year CAGR of 54%).