This week, we picked Impact as our martech company of the week. Last month, they acquired Mediarails as part of their efforts to optimize and innovate in the space of partner marketing. Impact was also named to the 2018 Inc. 5000 list of America’s fastest-growing private companies.
Why should you care about partner marketing? According to Impact — based on data from the WTO — partner marketing accounts for 75% of total revenue globally. However, the last 25 years of martech innovation have been focused largely on the other 25%, the part that comes from our direct efforts and in-house teams. Needless to say, the “easier” part.
Now, however, thanks to CRM and marketing automation, top brands are feeling better about their 25% and looking to expand into the other piece, growing partner marketing.
Which brings us, of course, to Impact. Founded in 2008, Impact incorporates a bit of a smattering of technologies: Forensiq works to stop ad fraud, Altitude provides confidence in making decisions on how to invest marketing dollars, and Radius/Mediarails work to optimize partner marketing.
Or as they would say, collectively the platform is designed to solve for (impact, even) growth.
We sat down with Scott Brazina, CMO of Impact, for a quick Q&A.
ClickZ: Tell us a bit about your background
Scott Brazina: I’m a B2B and B2C technology marketing veteran. I’ve been part of software and technology companies for 25 years, at different stages — early, mid, and then larger public companies. I have some specific ad tech and martech space, and then recently in November joined Impact. At the time it was ImpactRadius, and we right out of the gate rebranded it.
CZ: Tell us about the rebrand and shift in focus for Impact?
SB: The rebrand wasn’t just marketing driven — it was an evolutionary point in our growth. The company was 10 years old, and in the last two years we’d had two acquisitions, and a bunch of technology investment. The company was founded in 2008 out of Santa Barbara. The founding team is still here. For many of the core team it was 2.0 or 3.0 of founding companies. The core team had founded Commission Junction (CJ), one of the largest affiliate network companies. They grew that, sold it, and about two years later said “wait, there’s a better way now.” It was an independent SaaS solution for marketers, and that was the genesis for Impact.
About two years ago we made the first acquisition of ClearSaleing from eBay enterprise. It’s now our solution called Altitude. It’s an attribution and multi-mix channel solution. The more recent acquisition was Forensiq, a leading ad fraud solution.
CZ: So what does Impact do?
SB: We bring together core technologies for savvy brand marketers to grow their business and make their marketing investments with confidence. We’re radically focused on growth. The confidence starts to get at the core technologies we’ve brought together. Partner marketing is a way that B2C and B2C companies are growing and increasing the percent of growth that they get from all the different techniques and channels they use. The percent of growth coming from that is growing.
CZ: What kind of partners? Influencers, other brands?
SB: There’s a maturity model going on, an evolution of what is partner marketing. It started in the affiliate space, that was really the first wave. As brands got used to that, they started to expand into other partnerships — for example influencers, which is a whole other layer of partner activity. Another phase is brand-to-brand strategic business development relationships. So an example of that would be two of our customers, Airbnb and an airline, getting together and spending three quarters figuring out terms and then cross-marketing, and using Impact’s solution to manage that program.
When you start to stack things up, partner marketing is going from a few percentage points of revenue growth, to really the high teens / low twenties.
CZ: So in the future, will partner marketing be the majority?
SB: We’re starting to team up with analysts at Gartner and Forrester to quantify this space. Jay McBride at Forrester talks about the third wave: when you look at the percent of revenue that comes from direct vs partners, based on data from the World Trade Organization (WTO) about all the revenue floating around the planet, it’s really 75:25 from partners versus from direct. The vast majority of revenue comes from affiliates, influencers, brand-to-brand relationships.
Over the last 20-30 years, from a martech standpoint, the focus has been on optimization of the 25%. Starting with 10-15 years of CRM, then the recent 10 years of marketing automation. And now the third wave is that we’re seeing a lot of companies saying, “okay, I’ve done a lot of optimization on that 25%. Now I need to do the 75%.”
The 25% is easier. It’s captive, it’s in your control. It’s your in-house team.
Uber and Airbnb, two of our customers, were at a trade show last year. Someone in the audience asked, “Where is this all going?” One of the panel members from Airbnb took out his business card and said, “Case in point: I used to be VP of affiliate marketing at Airbnb. Now it says VP of partner marketing.”
So we started with affiliates, then we layered in influencers, and now we’re seeing these global, brand-to-brand business development teams working together. And the partner marketing team can step in and say, “I have the technology to manage this for you.” All of a sudden, this partner marketing team that was managing just a few percentage points of revenue, is now managing influencers and bigger brand relationships, which together are maybe 18-25% of revenue. Now the C-suite is looking at this as a channel going, “wow.”
CZ: How does your platform facilitate those relationships? If I’m a new client, what does your platform do for me?
SB: We have a few different technologies. Radius as a partner marketing solution manages, executes, and helps optimize global partner relationships between companies. It’s a SaaS subscription software product. A company licenses it, and also gets memberships for the partners they already have. It manages the terms and conditions of the partnership agreement, so both parties understand the details of success. It measures when success happens. This whole space tends to be heavily performance oriented, so the partner could get rewarded when a success happens — maybe a new customer downloads an app or subscribes. It measures when that happens. Then it actually makes the payment, across currencies globally. Then of course all kinds of reporting and analytics around it.
About a month ago, we announced the acquisition of Mediarails, a company in the partner marketing space. They have capabilities in the upfront identification, recruiting, and onboarding of partners globally. So that adds to our capability set. So we help our customers accelerate their ability to expand partner programs, identify new partners, communicate with them, recruit them, and onboard them. Mediarails classifies partners based on what their domain is, their expertise, and where they do business.
The partner space went through a phase of scale and focus on big partners — kind of an 80/20 rule where 80% of the activity was being generated by a small group of very big partners. And now it’s moving into another phase of how do I grow securely beyond that, and find good, niche partners. Which brings in the concept of influencers.
CZ: And what are the other pieces of your technology?
SB: So Altitude, the value that it brings, is when you think of the challenges today of where do we invest our marketing dollars to get the best ROI out of that spend, how do we best reach our target audiences and effectively communicate our message to them. There are just so many channels today, online and offline, a thousand things. If you’re a B2B or B2C marketer, you’re using some mix of all this stuff. So how do you make rational decisions about how are these channels performing, where do I need to increase or decrease my spend, what do I need to fix? That’s the whole world of attribution of success, multi-mix modeling, and acting on that. What was truly successful?
The world of digital has the problem of bad actors. The internet is a really porous space. Think of the online system for money transactions. We’re not liable for fraudulent charges on our credit cards, it’s capped. From the very beginning, this industry was built with security in mind. Yet it’s still being frauded all the time. This gets into the area that Forensiq focuses on: ad fraud.
We’re bringing it back to clean data, and marketing intelligence and attribution. It’s one thing to become aware that you were frauded in the past. It’s another thing to think that something fraudulent was actually successful and continue to invest that way. Ad fraud is detecting and eliminating what’s fraud and what’s not up front, and then cleaning it out so that when you go forward, you’re making decisions based on true successes.
CZ: You rank the risk of ad fraud?
SB: Yes, we have a normalized index we’ve created that gives a relative indication of ad fraud. It’s calculated using leading indicators of the likelihood something is fraudulent, things like nonhuman interaction, source, IP addresses and locations around the world, traffic patterns, blacklisted sources.
It’s a 100 point scale, so 0 is good and 100 is no way. It’s always a balance between scale and reach. Depending on the customer’s risk tolerance, it’s kind of their decision. We would say when you get into the 20, 30, 40 point range, you should start to be concerned.
You can also go the media source and say you think the channel is suspicious, and have them prove to you otherwise — we try to maintain that transparency.
CZ: What do you see as your biggest challenges for 2019?
SB: Adding & hiring A+ players, executing & scaling fast
CZ: What are you doing to prepare?
SB: Hiring great people. All starts with the team!
Customers include: Uber, Airbnb, Travelocity, Orbitz, American Express, CapitalOne, HSBC, Target
Year founded: 2008, with acquisitions in 2015, 2016, and 2018
Acquisitions: ClearSaleing, Forensiq, 5IQ, Mediarails
Funding status: Private Equity
Last funding type: Private Equity
Headquarters: New York & Santa Barbara
On the martech landscape: Performance Marketing; Attribution/Measurement; Fraud/Verification; CRM