Radius and Leadspace quietly called off their merger back in August, agreeing not to point fingers at each other and continue supporting joint customers.
“At the end of the day, private to private mergers are incredibly hard to pull off. In this case, despite all of the best intentions in the world, we could not get to something that would work for all sides,” Leadspace CEO Doug Bewsher told Demand Gen Report. “We are excited to see the evolution and clarity around the whole customer data platform really starting to define itself in B2B.”
Bewsher remains bullish about Leadspace and the Audience Management space:
Leadspace pioneered this space when we launched our Audience Management Platform two years ago. We continue to see great success with customers as they both simplify their data management processes and bring additional data driven insights and recommendations into their activities. Whether driving an ABM strategy, a content marketing / inbound lead driven strategy, or outbound prospecting, the right data and insights deployed into systems of engagement is typically the first step in any company’s success…
We look forward to working with you to develop, build and lead this category as we continue our mission to help B2B sales and marketing teams drive a new level of engagement, targeting and resulting revenue for their organizations.
Leadspace had a strong Q2 with its “best ever revenue growth.” New customers include SAP and Splunk. Growth was driven by the increasing recognition that B2B firms require a data-agnostic Customer Data Platform “which brings together many different data sources at the company- and individual-level, drives recommendations, insights and a single source of truth through AI, and then has a single point of integration into multiple executions systems (CRM, MAP, Ads etc),” said Bewsher.
“Radius and Leadspace agreed to continue operating independently and are now partnering to support joint customers,” said Radius. “Radius’ customer data platform is the first for B2B, and we will focus on offering enterprise companies integrated, unified and trusted data across all go-to-market systems, while Leadspace’s audience management platform will continue to equip companies with audience enrichment and analytics.”
On Monday, Radius Intelligence and Leadspace announced their merger and plans to become the “leader in B2B data intelligence.” The firm, which will continue under the Radius brand, is no longer emphasizing predictive analytics.
The predictive analytics market has failed to develop as a standalone segment. According to Radius Chairman Darian Shirazi, the total investment in the space was over $600 million. However, Gartner sized the market at $100 million to $150 million in 2016 revenue, suggesting that the promise of predictive analytics was developing slowly.
In his just released 2018 MarTech Landscape, Scott Brinker removed Predictive Analytics as a segment as machine learning is being integrated broadly across marketing products.
For B2B predictive tools to work, they require high quality reference data sets for initial and ongoing enrichment, but the predictive analytics companies black-boxed their data sourcing. Radius was one of the few exception to this opacity as they were transparent about their data acquisition model (web crawling combined with a customer contributed data model), but most of the other firms have been vague about their data models.
The predictive analytics companies were also slow to offer ABM tools and similar company and contact recommendations. These features are now commonly offered by both predictive analytics companies and sales and marketing intelligence firms such as D&B Hoovers, InsideView, DiscoverOrg, and Zoominfo. What’s more, the sales and marketing intelligence firms have all developed light predictive scoring or ranking tools. While none of these firms approaches Radius or Leadspace in predictive capabilities, they all provide company and contact insights for sales reps, ABM tools for sales and marketing, and integrated data enrichment processes.
The predictive analytics firms also initially black boxed their models, preferring to hide complexity. They have since become more transparent and begun displaying the top reasons for recommendations. However, Salesforce Einstein has provided similar functionality with predictive scores and insights.
Todd Berkowitz of Gartner summed up the situation well.
I’ve been covering the market for B2B predictive marketing analytics for almost four years. A few years ago, predictive lead scoring was all the rage. Then it became about fit and intent models for demand generation and prospecting. Then these tools were used for selecting accounts for large-scale ABM programs. But in the end, the standalone market for these applications never fully reached its potential. Many of the original vendors got acquired for their technology (Fliptop, SalesPredict, Infer and others) and predictive scoring became a standard feature of marketing automation and SFA systems.
Just because the standalone market went away, doesn’t mean there isn’t a lot of value here. In fact, the solutions have essentially moved into two other markets (and you’ll see this reflected in our upcoming Hype Cycle reports). On one end, you have the Data Intelligence for Sales market where predictive and AI-driven solutions are competing with traditional data vendors for demand gen, prospecting, and segmentation use cases. On the other end, you have the broader ABM solutions market where these applications not only help with account selection and planning, but are moving towards engagement and orchestration.
Berkowitz predicted that one or two of the remaining predictive analytics vendors will be acquired in the next six months.
With over 6,000 MarTech companies, the market is quite fragmented. Although the MarTech sector continues to expand, there is already momentum towards consolidation as clients look for broad, integrated functionality instead of many point solutions. For example, marketing and sales departments adopting ABM need a broad set of functionality which includes
AI scoring and recommendations
Real-time, batch, and continuous company and contact enrichment
Data hygiene (e.g. de-duplication, data standardization, and verification services)
Third-party verticalized data enrichment
Website visitor id
Look-a-like company and contact prospecting
Segmentation, TAM, and pipeline analysis
CRM, MAP, and sales engagement connectors
Account social media monitoring
Company and contact intelligence
At this point, nobody offers a full suite of these ABM capabilities for sales and marketing departments.
On Monday, Leadspace and Radius Intelligence announced their merger. The two firms were early entrants into the predictive analytics space, but the market for standalone predictive intelligence services has not developed as predicted. Thus, VCs and private equity companies are sitting on large bets that have yet to pay out.
The merged company will continue under the Radius brand as the “leader in B2B data intelligence.” Leadspace CEO Doug Bewsher will take over as the CEO of the merged firm while Radius founder Darian Shirazi will assume the role of Chairman. The two positioned the merger as a coming together of firms with complementary assets across company (Radius) and people (Leadspace) intelligence.
“Radius and Leadspace as one company will deliver a standout go-to-market platform with the best data, artificial intelligence and integrations at its core… What’s truly exciting is that our mission remains the same. Radius will be the nucleus that powers data and intelligence across all B2B applications, channels, and users — now built on The Global Network of Record.”
Radius Intelligence Statement to Customers
Both Leadspace and Radius have edged closer to prospecting and data enrichment than other predictive vendors. Leadspace has long offered contact enrichment and prospecting, even appearing in a 2015 SiriusDecisions report on Contact Data Management. Meanwhile, Radius has built its own database of US company and contact data which it named “The Network of Record” and positioned as the “single source of truth for account data.” The Radius database spans 18 million US companies and 25 million contacts with verified emails and direct dials. Radius also offers digital ad targeting.
Radius is positioning itself as being at the center of B2B predictive analytics, B2B Audience Management, and B2B data management. However, several of the data solution vendors also offer advertising solutions including Infogroup and Dun & Bradstreet. (Source: Radius Intelligence)
The new Radius will help sales and marketing teams “find the right data on the right buyers, and reach those buyers across any channel.” Revenue teams will have access to the “industry’s most comprehensive data intelligence solution.” Features include account and people targeting, data management, ABM execution, and integrations with Salesforce, Microsoft Dynamics, Marketo, Eloqua (Oracle Marketing), and Pardot (Salesforce).
Shirazi is positioning the company as an Einstein competitor with expanded assets to compete against Salesforce. “We’re excited about this because it will create the largest number of customers, largest revenue base and really provide a company that is at scale in B2B data and intelligence,” said Shirazi. “The only other major player in this space we believe is Salesforce Einstein, and we’re excited to really give them a run for their money.”
Shirazi provided the following list of planned enhancements to be rolled out over the next year:
Master Data. Master Growth
Extend reach and accuracy as The Network of Record unites with Leadspace’s proprietary, real-time virtual database sourcing
Take complete control of data governance with added data dashboard functionality
Enhance data matching and append for contacts, as well as lead-to-account matching features
Real Intelligence. Real Buyers
Strengthen targeting on individual decision makers in both the U.S. and international markets
Access enhanced segmentation, scoring, and insights on contacts
Leverage features from two effective sales intelligence tools
Scale Channels. Scale Revenue
Expand audience reach with the largest deterministic reach of any platform
Source more contacts with even higher accuracy and contactability rates
Connect more channels with more seamless integrations and partners
Shirazi describes Radius as the next “backbone go-to-market platform.” The combined assets “will enable marketing, sales, revenue ops, and customer insights teams to finally address their data gaps and conquer their targeting challenges. We will create a standout solution in a crowded, fragmented space of point-solutions where customers are forced to stitch together multiple products or change vendors every year.”
Back in 2015, Radius Intelligence had a market value of $500 million and funding of $107.6 million. Leadspace never disclosed a valuation, but it received $59 million in funding with a $21 million Series C in December.
LinkedIn lists 100 Leadspace employees and 160 Radius employees.
The merged company has over 200 customers including Sam’s Club, Hewlett Packard, Microsoft, Comcast, MetLife, and American Express. Both firms maintain “innovation centers” in San Francisco and Israel.
While there is a commonly cited statistic about contact data decaying at a 2.1% rate per month, the nature of this decay has been less reported. Predictive Analytics company Radius conducted a study of 10,000 businesses and assessed the rate of decay over three months. Data quality was assessed by external vendors in May and August 2016. The Move or Unreachable value of 27% is similar to the often cited annual decay rate of 25% for contacts.
Radius published only three month decay rates, but I annualized the data using a four-period compounding formula.
One statistic that I did not annualize is the “Emails become Invalid” rate. If 7.6% of contacts are not reachable after three months, then why are only 2.5% of emails becoming invalid? There are several reasons: First, approximately 8% of companies set their mail servers to not send bounce messages (or 0.6% of the three-month spread). Secondly, most companies do not immediately turn off email messages when a person leaves the firm. They generally forward the emails for a period of time to an administrative assistant or the individual who has assumed the departed person’s role. This tends to be a temporary situation, but it explains the 5% gap between the two rates. As one would expect companies to eventually decommission old emails, the annual rate of emails becoming valid should be closer to 25% than the non-displayed CAGR rate of 9.7%.
Radius is looking to address the decay problem in its database via leveraging their clients’ second-party data to obtain network effects for augmenting and updating their file. Customers opt into the network with their data immediately anonymized and aggregated, “providing additional points of validation and verification.” Customer contributions now cover 70% of the businesses in Radius’ Business Graph spanning one billion interactions.
Zoominfo has employed a similar model over the past few years for building out their contact file. Their Community network has lifted their coverage of active US B2B contacts to 80 million.
Radius claims that the network improves the accuracy, comprehensiveness, and freshness of their data. For example, phone connect rates improve from 84% to 93% when there are at least five data validation points. Likewise, physical address accuracy improves from 85% to 96% when there are at least five validation points.
The comprehensiveness of firmographic data also improves with additional members. Without the customer network, only 64% of records had full firmographic or contact attributes. The population of comprehensive records rises to 81% with fifty network members.
Finally, Radius claims it’s network is “up to 20 times faster” at updating the Business Graph “than with traditional, manual methods of data collection and validation.”
“Network effects have long been a driver of business value and innovation across many industries, particularly for B2C companies,” said Radius CEO Darian Shirazi. “At Radius we are pushing the envelope on what B2B companies can come to expect from data. Now, leveraging customer network effects opens the door to further transform B2B data and develop new marketing innovations. By tapping into our predictive expertise and already robust data set, customer network effects can help marketers make smarter, faster decisions that drive revenue and growth.”
SalesLoft, DemandBase, Datanyze, and Leadspace made Gartner’s “Cool Vendors in Tech Go-to-Market, 2016” list. According to the report, “Marketing and sales enablement leaders should consider these software-as-a-service applications to complement existing CRM tool investments.” Gartner also recognized predictive analytics firms Everstring and Radius in the data-driven marketing category.
Providers are doing a better job in responding to the changing B2B technology buying cycle and the higher expectation that buyers (both prospects and customers alike) have when they look to make a purchase. Some of this involves process and training improvement, improved messaging and positioning. But there is also a technology element, particularly as it relates to things like data, analytics, content, targeting, personalization and engagement. And clients are increasingly leveraging the latest tools that allow them to make better, smarter decisions.
Gartner Research Director Todd Berkowitz
Here is what Berkowitz said was cool about the firms:
Datanyze – The technology tracking firm helps identify “when a particular piece of SaaS or mobile software (say from a competitor) is added and fire off alerts.” This feature helps SDRs and sales reps see “which companies are in market and engaging with them.” Datanyze also offers a “cool” Chrome browser extension called Insider which displays firmographics and technographics from a company website, performs on demand email detection, and uploads this information to Salesforce.
Demandbase – The firm supports Account Based Marketing (ABM) marketing with IP-based advertising and personalization tools. The firm delivers “a unique ‘one-two punch’ of real-time IP identification and technology that makes it possible to deliver company advertising (targeting and retargeting) and website personalization to help marketers increase awareness, drive up conversions, generate net-new and upsell/cross-sell leads from named accounts, and measure program effectiveness across the funnel.”
LeadSpace – The predictive analytics vendor helps customers “generate demand, enrich and prioritize accounts/leads from companies with a higher propensity to buy.” Berkowitz also commended their “virtual data management platform that drives their models and recommendations.”
SalesLoft – The Account Based Sales Development (ABSD) firm assists sales development reps (SDRs) with lead qualification and prospecting. “Their suite of templates, an integrated dialer and real-time analytics are a lot cooler for SDRs than the old way of working. And they work much better.” Their Cadence tool helps streamline prospect communications such that “some of their customers reported more than doubling the number of successful connections, appointments, demos and sales-qualified leads (SQLs), while reducing follow-up time from leads by more than 75%.” Their new Sales Development Cloud provides prospect intelligence to SDRs from DiscoverOrg, Crystal, Owler, InsideView, Datanyze, RingLead, Sigstr, and ExecVision.
Everstring – A more recent entrant to the predictive analytics space (founded in July 2014), Everstring offers predictive demand generation and scoring models at both the lead and account level. Everstring covers eleven million B2B companies and 20,000 different attributes with “rapid deployment of models across many points in the funnel.” The firm is also a strong proponent of ABM and helps marketers identify accounts. “EverString’s predictive account models enable marketers to identify high-potential ABM candidates and then push them to third-party ABM platforms for use,” said Berkman.
Radius – The predictive company was lauded for its segmentation tools which help SMBs “determine total available market, create attractive segments and identify accounts to target.” Radius was also praised for its “clean interface,” “data and analytics tools,” and the ability to train and validate models within one business day. Berkman warned that Radius has faced little competition in the SMB market to date but is likely to face stiffer competition as both Radius and the market for predictive analytics solutions grow.
Berkowitz noted that these tools are all focused on making it easier for marketers and down-the line sales to make better decisions” noting that they all rely on the “heavy use” of data and analytics.
While many of these firms provide predictive analytics, Berkman contends that vendors will soon be offering “prescriptive analytics” that help firms decide what should be done. Thus, analytics will shift from predictions based upon historical analysis to recommendations concerning which actions to take. Prescriptive analytics utilizes graph analysis, simulation, complex event processing, neural networks, recommendation engines, heuristics, and machine learning.
“We have seen it [prescriptive] used a little bit on the sales analytics side already,” said Berkman. “It is likely that we will get to that stage with marketing so the marketer will know not only who is most likely to buy and what they will buy.”
For marketing, prescriptive analytics will assist with prospect identification, optimizing customer communications, and improving prospect offers.
Another trend you will find amongst the cool vendors is the heavy citation of ABM and ABSD tools amongst these vendors. Everstring, SalesLoft, and DemandBase are all strong proponents of ABM while Leadspace recently partnered with ABM vendor Engagio.
Stephanie Kong, Product Marketing Manager at Radius, recently compared dirty data to rotten food. Working with either consumes more expertise and results in sub-par results:
Handing dirty data over to data scientists is tantamount to passing rotten ingredients to a chef and expecting that he/she transform the inputs into a gastronomical masterpiece. In both instances, the quality of the inputs impacts not only the quality of the outcome, it also impacts the experience and efficiency of the professional– how much time can be spent experimenting and applying the artistry for which the professional was hired versus overcoming hurdles to get to a sufficient baseline.
Bottom line: the quality and state of your internal data can impact– and even worse, impede– the ability of even the most talented data scientist to generate breakthrough ideas. Many turnkey data solutions can help you maintain data, even enhancing accuracy and comprehensiveness, in addition to extracting insights. It’s not simply a means of “killing two birds with one stone”; accurate and complete data is a critical first step. In other words– and without being too macabre– good data is the essential and necessary “first kill.”
Marketers are becoming more strategic in their approach to data as they realize the limitations and costs of poor data. Predictive Analytics systems are only as good as your underlying data. Bad data is simply noise (or as Kong would call it, “rotten ingredients”) that obscures the underlying signal. Without accurate data, how can you expect your predictive systems to give you anything more than random nonsense?
Likewise, the shift to Account Based Marketing requires strong firmographics for identifying the companies you wish to target. Furthermore, strong linkage is necessary for targeting subsidiaries and branches. Whether you are extending an MSA or looking to establish a beachhead, you need a holistic view of the organization across industries, regions, and job functions. You also need an accurate set of contacts spanning all functions, levels, and locations.
When evaluating B2B content vendors offering predictive or DaaS solutions, ask about their
Data Processes: Data sourcing, update cycles, verification and validation, feedback processes
Hygiene Services: Do they offer email, phone, and address verification, field standardization, deduplication
Matching Capabilities: Is it a direct match or probabilistic match based upon multiple fields? Are fields standardized prior to matching? Is the focus on company or contact matching?
Connectors / Integrations: CRM, MAP, DaaS cloud, API, etc.
Ongoing Data Refreshes: Frequency, Cost, Level of Automation
Contact Coverage: Emails, direct dials, functions, levels, bios,
Company Data: Scope, depth, firmographic fill rates, identifiers, linkage, etc.
Other Data: Intent data, technology platforms, business signals, etc.
Data quality is a strategic asset so your content and technology partners need to be thoroughly vetted. It is important to understand the strengths and weaknesses of each offering during both the vendor selection and implementation stages. Otherwise, you may only partially address your “rotten ingredients” problem.