Emily Riley, Senior Advisor, Ghostery

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BENCHMARKING YOUR MARKETING CLOUD

Benchmarking Your Marketing Cloud Emily Riley, Senior Advisor, Ghostery You no longer have a website, you have a marketing cloud. In 2004 you had a website. In 2015, you have a marketing cloud. You interact with your customers across thousands of channels and device types, and rely on hundreds of vendors to do so. If you are like most enterprises, your marketing cloud is out of control. And that poses dangers you may not even suspect. An out-of-control marketing cloud can cause you to send customers to competitors' stores, dilute the value of your customer data, open security breaches and slow down your site. The result? Lost revenue, again and again. But today, thanks to the latest tech innovations, you can take control of your mushrooming marketing cloud, and ensure that you keep and grow your customer base, secure your ever-growing data, maintain top-level site performance, and keep your bottom line healthy. In, this, part three of our research series, we offer tips for de�ining benchmarks in your marketing cloud management to ensure you maintain excellent control of all aspects of your website's performance – and pro�itability. Your Accidental Marketing Cloud Here's an important fact to know right off the top: Today's leading commercial websites average more than 70 vendors in their marketing clouds. Yet most website managers are aware of fewer than half of their vendors and directly manage less than 25 percent of them. A large percent of the vendors with access to commercial websites have no direct contract or relationship with the enterprise itself, gaining entry through partnerships and agencies. In other words, most marketing clouds are created accidentally, without any cohesive strategy. That accidental chaos creates latency, security and site-management nightmares. How have companies allowed their websites to be compromised in this way? It is simply the result of a rapidly multiplying digital cloud that has grown to respond to the shifting needs of today's wired consumers. As customers adopt new digital behaviors, enterprises forgo best practices to quickly respond to their demands. The growth of vendors in the marketing cloud mirrors the growth of digital choice. And the beat goes on: The number of marketing cloud companies active on major sites has more than tripled in 3 years – growing from approximately 600 in 2011 to more than 1,900 as of April, 2014. That's because, instead of carefully vetting and assessing the pros and cons of each vendor joining their clouds, most companies move forward with a customer focus -- designing advertising or social marketing strategies to keep up with consumer demands and beat out the competition.

January 6, 2015

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While their digital marketing teams move forward in the name of progress, they are leaving a mess in their wake that the operations and IT teams must somehow manage. And what's the biggest loser in this scenario? The company's bottom line: A recent survey of 300 IT leaders by Ghostery and GigaOm Research shows that companies could increase digital ROI by an average of 20% if they did a better job of managing their marketing cloud. For a Fortune 500 company, this is worth $50 million a year! In other words, it’s a major competitive advantage to improve the organization and performance of your marketing cloud. To do so, it’s important to create benchmarks and monitor performance over the long term. Marketing Cloud Benchmarks That Drive ROI As companies are becoming aware of the marketing cloud mess they’ve created, they are seeking to rapidly make improvements. Many organizations are jumping on the "take control" bandwagon these days. Note the rise in the use of tag management in the last 18 months: The key to gaining control of your marketing cloud is measuring what you can control. We suggest you focus on the key categories for benchmarking that will create the biggest returns for your particular effort. Here are our suggested benchmarks, and some lessons to learn about using them, from others' mistakes:

● Security. According to data recorded by the Identity Theft Resource Center, the number of data breaches is on the rise in the U.S. A full 619 known breaches occurred in 2013, compromising more than 57.8 million consumer records and exposing data including names, credit-card numbers, passwords, and card security codes. And contenders like Home Depot, JP Morgan Chase, 1

Target, and eBay experienced major breaches in 2014. Lesson: If you allow vendors to put code on secure pages, such as pages where you collect credit-card information and pages behind secure log-ins, you expose yourself to security risks. You must evaluate how frequently your vendors call your site with non-secure connections, bring in third parties without your knowledge, or collect personally identi�iable information about your customers. The more non-secure calls, the more security gaps you have on your site.

● Cloud Structure. The more complex your cloud, the more expensive it is to maintain. Amazon has spent millions designing and building proprietary software and business processes to manage the more than 300 vendors in its

1 “Into the Data Breach: Identity Theft Protection”, Annamaria Andriotis, The Wall Street Journal, 1/24/2014

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cloud. If you don’t have millions, then you probably can’t afford to manage anywhere near that many vendors effectively on your own.

Lesson: The more mature websites dynamically serve only the most relevant tags on a page to make the page lighter and to decrease data leakage risks. Amazon, for example, only serves a fraction of their 300 total vendors on any page to any single customer.

● Latency. As vendor tags load, they can cause latency issues and site performance problems, even if they are asynchronous. This costs companies millions each year. Walmart’s study of site transactions showed that every second of improvement in the load speed of their pages increased conversions by 2%, and even a 100ms improvement in performance equaled a 1% increase in revenue! . Walmart also published industry-wide statistics 2

that show that a 1-second increase in latency equals a 7% decline in conversion.2

Lesson: Every second of website latency equals $50 million in lost revenues annually. The drag that each vendor puts on your customer shopping experience is a cost you can’t afford to ignore.

Introducing the Ghostscore Website Optimization IndexTM For the �irst time, Ghostery offers marketing cloud metrics that every company can use to eliminate waste and maximize ROI in their marketing cloud. Ghostery recently introduced the Ghostscore Index, a unique rating system that ranks the marketing cloud performance of leading companies in North America and Europe in a wide range of industries – 100 domains across 6 verticals (Finance, Insurance, Publishing, Retail, Search/Internet and Travel). The Ghostscore Index crunches millions of data points to identify key performance metrics that drive marketing cloud ef�iciency and pro�itability:

Security The total number of non-secure tag calls encountered on secure pages, per 1,000 pages viewed.

Total Vendor Tags in the Marketing Cloud

The number of distinct vendor tags that appear on the domain in the month for which the score is generated.

Total Vendor Tags Encountered per Page

Average number of vendor tags loaded per page across all pages on the domain with 3 or more tags found per page load.

2 http://minus.com/msM8y8nyh/2e, page 46 2 http://minus.com/msM8y8nyh/2e, page 33

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Tag Deployment Ratio The ratio of average number of vendor tags per page encountered on the domain, divided by total tags encountered across the domain

Performance The average latency of all tags encountered by Ghostrank contributors on a domain.

Here’s a sample:

How to Use the Ghostscore Index to Benchmark Your Marketing Cloud Some helpful notes to keep in mind as you use the Ghostscore Index to rank your website's performance against the Ghostscore Index average:

● Lower numbers are better. Low latency numbers indicate fast load times: For instance, vendor tags on Delta.com loaded in only 136 milliseconds on average in December 2014, compared to tags on Airfrance.fr, which loaded in 476 milliseconds. A low tag ratio indicates only a few dynamically served tags on a page compared to many tags on the site. Although Amazon has 298 total tags (one of the highest), they only serve an average of 5 per page – creating a very low ratio of .0016. And, of course, the fewer non-secure calls, the better – as is the case with rbs.co.uk and forbes.com, at 0.

● You can rank yourself even if you are not on the Ghostscore Index table.

You can use APM software, tag managers and Ghostery metrics to create your own Ghostscore metrics. Once you determine your own site speed, tag ratio, and non-secure calls metrics, simply rank yourself against each column in the table and see where you average out.

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● Select a few companies to benchmark against. Of course ranking �irst is ideal, but companies have to make compromises as they navigate marketing cloud management. Online-only companies tend to adopt new technologies sooner. Companies with lightweight websites will run faster. Financial services companies will have higher security hurdles to cross. Determine which elements drive your marketing cloud strategy and select a few companies with similar strategies that you can use to compare your performance to and assess your results.

● Track changes over time. Once you have your eye on a few competitors and marketing cloud leaders, track your performance and theirs each month to determine your progress. You can start using your benchmarking data to see where your digital organization needs to focus if a particular metric starts to slip. You may also �ind ROI indicators as you improve your other metrics.

Best Practices To Improve Your Ghostscore: 1. Improve Your Cloud Structure Estimate the time it takes to manage the long list of partners in your cloud, both for you directly and in what you are paying your agency to manage for you. If the cost is too high (and if your Ghostscore is too high), consider the following:

● Manage your tag manager. Tag managers allow marketing organizations to manage �irst-party data, and can streamline your processes. However, that is hardly the end of the story. Your tag manager has to be monitored actively. Otherwise, your marketing cloud can devolve quickly, as they make it very easy to add new vendors to your site but have no visibility into 2nd, 3rd and 4th party vendors. Keep an eye on the vendors who appear in your tag manager, the speed of the tag manager on your site, and the data sharing rules that you set. If it all becomes too much to handle, you probably are working with too many vendors.

● Use dynamic tag serving on key pages. Tag managers can easily handle complex rules that will serve vendor tags dynamically based on user pro�iles, and other rules. Set them up to help limit the number of tags that load on a given page to speed up your site and limit data leakage.

● Limit parent/child tag chains. Most vendor relationships are indirect,

coming through ad networks and data management platforms and the like. Typically, 20-40% of vendors have physically added code to an enterprise’s website; the rest of the vendors are spawned through parent tag code. Rule of thumb: The more tags you allow your partners to bring in, the less control you have.

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● Limit redundant vendors. In large organizations, it is common for different teams to select different competing vendors to perform similar tasks. For example, the editorial team might select one social listening tool while the agency may use another without knowledge of the other. Take the initiative to clean up redundancies and increase knowledge-share across your teams. It's bound to save you money.

2. Eliminate Latency Issues If you, like Walmart, are able to create your own benchmark for evaluating the cost of latency, by all means, use it. If not, collecting published benchmarks from other ecommerce enterprises as well as site monitoring studies is a good place to start. Glasses Direct, for example, partnered with TagMan to discover that a 1-second delay resulted in 11% fewer page views, a 16% decrease in customer satisfaction, and a 7% loss in conversions. 3

Site latency is caused by factors such as server connection speed, page size and third parties in your marketing cloud. It is important to see how vendors are performing on your site compared to their average performance in order to see if the issues you are encountering in your cloud are local or universal. Benchmark latency in two categories:

● Vendor contribution to page latency. While some tags will slow your page’s load time, others load independently of your site. Within the discipline of marketing cloud management, you must understand how each vendor is contributing to overall latency, and strive to reduce the drag caused by individual tags, especially on key pages where abandonment is particularly costly.

● Vendor viability. If a vendor tag is loading slowly, there is a good chance it is not performing the task you are paying for. If, for example, it is supposed to be retargeting customers, but isn't loading in time to drop a cookie, your cost will be signi�icantly more than your return. Strive to reduce the percentage or “failure to load” per vendor.

3 http://www.tagman.com/mdp-blog/2012/03/just-one-second-delay-in-page-load-can-cause-7-loss-in-customer-conversions/

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Fig. 4 – Average page load times among different industry verticals vary wildly, illustrating the need for

vendor-by-vendor monitoring.

3. Create Better Site Security The average secure web page deploys more than 35 vendor tags. Should this code make unencrypted calls or otherwise become compromised, all of the data transmitted by the page would be put at risk. To improve your security performance, consider the following:

● Check and amend vendor contracts. In your terms and conditions, and in most of your vendor contracts, there are legal obligations to keep user data secure. If you haven’t already, require vendors to alert you before they dynamically update code or add a new third-party partner.

● Limit the number of tags on secure pages. Not all pages are created equal, especially the pages where customers share personal data. When the risks go up, the number of tags on the page should go down.

● Monitor the tag code. Test pages randomly and regularly and look for vendor tag code changes that might compromise security. Vendors or even your own website managers may make updates to a tag and unwittingly add an http tag to an https page.

Other Marketing Cloud Measurements To Consider If you’re seeing your Ghostscore improve steadily, there are some additional actions you can take to further improve your Marketing Cloud performance. Take a look at:

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● Vendors shared with competitors. The vendors who collect data on your site often resell it to third parties and therefore must be tracked. At a high level, you can review the vendors in your cloud who are also present in your competitors' clouds. If zero tolerance is too extreme, then your overlap benchmark should account for protective contract language being in place. For example, you might �ind a 40% vendor overlap with competitors, and that 50% of those vendors have the right contract language in place. You would then strive to reduce the 40% overlap and/or the increase the 50% contract benchmarks.

● Data collection per page. Look at the most important pages on your site and determine the benchmark for data collection on these pages. You might want to limit the number of vendors on your checkout pages, use a whitelist, or restrict daisy-chain activity.

● Common cookie tags. To perform a more granular audit, review the code from your data vendors and compare it to the code on your competitor sites. If the code is identical, you are both likely sending customer data to the same database, which is then being reused. In this case, benchmarks should be at or near 0 unless you determine that the value of your data being resold outweighs the customer sales lost to competitors.

Fig. 2 – A description of the risk of data leakage from common tags across sites

Conclusion Benchmarking your marketing cloud is an important step to take on the road to marketing cloud management excellence. Marketing cloud management is a nascent

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discipline, developing in a time when understanding what equates to good or bad website performance is now key to selling your ideas internally. As we have illustrated, your marketing cloud can make you money, but it also exposes you to risks. Without a clear understanding of the potential pros and cons involved, it is easy to lose the balance between marketing cloud vendor optimization and risk mitigation. With a good understanding of both, however, you can move on to establishing best practices for long-term marketing cloud management excellence.

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